Ease of Doing Business In India – Now from 130th Rank to 50? Will The Modi Government Succeed? - ED | The Youth Blog | ED | The Youth Blog Ease of Doing Business In India – Now from 130th Rank to 50? Will The Modi Government Succeed? - ED | The Youth Blog
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    Ease of Doing Business In India – Now from 130th Rank to 50? Will The Modi Government Succeed?


    Looks like the efforts of the Modi led central government have started being recognised.

    The World Bank Report 2016 in Ease of Doing Business Category puts India at 130th Rank, out of 189 countries, from 142nd (revised to 134th) last year. It’s no small feat, considering it is the steepest rise seen by the country in recent years.

    Though the original ranking for 2015 was 142, it was later strengthened to 134 on account of the World Bank’s mid year review. Singapore topped the charts, with New Zealand and Denmark making up for the next two places. China is ranked 84 and Pakistan is at 138th place. In fact, Pakistan has slipped 10 spots from 128 and China has moved up six spots since the last report.

    The World Bank ranks countries on 10 parameters –

    • starting a business
    • dealing with construction permits
    • getting electricity
    • registering property
    • getting credit
    • protecting minority shareholders
    • paying taxes
    • trading across borders
    • enforcing contracts and
    • resolving insolvency.

    For India, the ranking covers data from Delhi and Mumbai, with weights of 53 per cent and 47 per cent, respectively.

    Below is India’s performance on Ease of Doing Business Index –

    As can be seen above India fared well mainly on account of improvement in two areas – ease of starting a business (where it jumped 9 positions to 155) and securing an electricity connection (where it moved up 29 places to 70). This was because India has recently eliminated the minimum capital requirement of Rs 1 Lakh through changes in the Companies Act in May 2015, and the need to obtain a certificate to commence business operations. And also because power utilities in both Delhi and Mumbai, have improved internal processes and done away with redundant inspections.

    But the Government has set eyes on the 50th rank till its tenure ends in 2019. And that’s an ambitious target to reach.

    The report observed that “India stands for having made big strides toward better and more efficient business regulation. In 2004 it took 127 days to start a business in India. In 2005 this has been reduced to 29 days”.

    However, on a not so bright side, India lags behind to other emerging markets (EMs) in dealing with construction permits, paying taxes, enforcing contracts and resolving insolvency.

    But the administration hopes to tackle the above, with plans of introducing the Bankruptcy law in the upcoming winter session of Parliament. It has also set up a committee, led by a retired high-court judge, to resolve the ambiguities and untie the knots of the Income-Tax Act, 1956.

    While most of the matters covered in the report suggest that India is taking the right steps, still the influence of domestic politics on economics holds us back. The spurt of a different breed of entrepreneurship needs to be encouraged. From helping start-ups with easy financing to aiding non-profit businesses reach masses using established state linkages, the Centre has a myriad of measures to promote commerce.

    If we sincerely target 50th rank as the objective, petty political games need to give way for greater Parliamentary will in passing land and labour reforms in the pipeline. The political class has to realise people no longer stand divided over caste and religion.

    Everyone wishes for a prosperous and peaceful state with richness of traditions and development beating at its core.


    Views presented in the article are those of the author and not of ED.

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