India Ranks 130 Out Of 190 Countries In Ease Of Doing Business Index, Know Why

The Logical Indian

October 26th, 2016 / 3:22 PM

Ease Of Doing Business Index

Source: livemint| Representational Image: ndtvimg

Ease Of Doing Business Index

As per the World Bank’s 2017 ranking, India ranked 130 amongst 190 countries in ease of doing the business index. Though there have been a slight improvement and India has inched up one place from its last year ranking in the same survey.

The survey was conducted on the basis of 10 parameters. India’s ranking has improved in two categories while the position remains unchanged in three and the rank got worse in five.

The First Parameter: Starting a Business

  • India’s position remain unchanged in this category. India ranked at 155 positions in both the years.
  • The cost of starting a business in India is huge and the unnecessary daunting procedures are the biggest hindrances to set up a start-up.
  • The State laws and the government framework makes the procedure of starting a business complex.
  • Adhering to excessive paperwork or red tapism have made it difficult for the beginners to initiate in the field of business.
  • Its upsetting to know that despite the continuous efforts of Pradhan Mantri Mudra Yojana the scale of improvement level for starting the business level has not risen.

The Second Parameter: Dealing With Construction Permits

  • India’s position has worsened in this area. From 183rd rank in 2016, it has reached 185th rank.
  • Even to construct a warehouse, there are unnecessary licenses and permits required.
  • It is also a costly pursuit that involves 34 procedures and takes around 196 days
  • Availing NOCs and permits take up a lot of time.

The Third Parameter: Getting Electricity

  • India has shown a slight improvement in this area.  Also said to be the star performer for a second straight year.
  • The segment has improved from 70 to 26
  • The cost of getting electricity is relatively cheap in comparison to rest of South Asia.
  • Though there are still pitfalls like time constraints, delay in external site inspection and meter installation.

The Fourth Parameter: Registering Property

  • India has remained unmoved in this segment.
  • Registering a property required a lot of legal works and incurs substantial charges.
  • The stamp duty cost around 5% of the property
  • Lawyer charges and fees at the Land Survey offices are hefty.

The Fifth Parameter: Getting Credit

  • India has ranked 44 in this segment which is worse than the last year.
  • The processing charges, delay in the procedure, on-site examination, tedious scalar chains have made it difficult for people to avail credits from a financial institution.

The Sixth Parameter: Protecting Minority Investors

  • India has again shown a decline in this segment. The rank has gone to 13th place from 8th.
  • Even after constituting SEBI to protect minority affairs, the standard has plummeted
  • The basic guidelines to enforce contracts should also be reviewed.

The Seventh Parameter: Paying Taxes

  • The worst decline has been witnessed is in the segment of Paying Taxes.
  • The segment declined from 157 of the 189 nations to 172 of the 190 countries this year.
  • Taxes like Central Sales Tax, Dividend Tax, Property Tax, Professional Tax, Fuel Tax, Vehicle Tax, VAT and excise duty are some of the taxes levied in India.

The Eight Parameter: Trading Across Borders

  • The segment has also seen a significant decline.
  • It declined from 133 out of 189 nations to 143 out of 190 nations.
  • Despite International trades, there are many hurdles that need to be resolved to overcome the issues regarding trading across borders.

The Ninth Parameter: Enforcing Contracts

  • India has shown a bit improvement in this segment
  • From 178 of the 189 nations the segment has improved to 172 out of 190 nations.
  • There have been 18 reforms that have made it easier to enforce contracts.

The Tenth Parameter: Resolving Insolvency

  • The segment has remained the same year. It remained undisturbed at 136 ranks.
  • It takes India 4.3 years to resolve insolvency in India.
  • The laborious court system has also affected business relations.

“The government will soon appoint an external agency and launch a portal for round-the-clock feedback from users on the policy steps launched by the government. The observers will play a critical role in ensuring reforms are functioning as intended and that any roadblocks along the way are being addressed in a timely manner,” said Ramesh Abhishek, Industry Secretary who is in charge of improving India’s doing business ranking, as reported by Live Mint.

 “Ease of doing business index is an index created by the World Bank Group. It is meant to measure regulations directly affecting business”


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