India ranks 142 on Doing Business Index: World Bank
(An Analysis)
The World Bank in its recent report ‘Doing Business 2015: Going Beyond Efficiency’ ranked India at 142nd position down from 140th position (revised) in the previous year. While, its DTF** (Distance to Frontier) score rose to 53.97 from 52.78 reported in the last years’ Doing Business 2014 report.
Ease of Doing Business, India 2015: Rank & Score
Doing Business 2015 Rank | Doing Business 2014 rank*** | Change in Rank |
142 | 140 | -2 ↓ |
Doing Business 2015 DTF**(% points) | Doing Business 2015 DTF**(% points) | Change in DTF** (% points) |
53.97 | 52.78 | 1.19 ↑ |
Source: PHD Research Bureau, Compiled from World Bank
Note: DTF** is Distance to Frontier which benchmarks economies with respect to a measure
of regulatory best practice showing the gap between each economy’s performance and the best
performance on each indicator. An economy’s distance to frontier score is indicated on a scale
from 0 to 100, where 0 represents the worst performance and 100 the frontier.
*** Last year’s rankings are adjusted. They are based on 10 topics and reflects data corrections
The Doing Business report measures business regulations in 11 areas across 189 economies including starting a business, dealing with construction permits, getting electricity, registering property etc.
On these aspects India’s ranking is dropped in the 8 of the 10 areas : starting a business; dealing with construction permits; getting electricity; registering property; getting credit; paying taxes; trading across borders; resolving insolvency. While, its position in ‘enforcing contracts’ at 186 remained unchanged from the previous year. The only area ‘Protecting minority’, has shown a significant rise in its ranking from 21st position last year to 7th position in the current year.
Doing Business 2015 Rankings | ||||
Particulars | DB 2015 Rank | DB 2014 Rank | Change in Rank | |
Starting a Business | 158 | 156 | ↓ | -2 |
Dealing with Construction Permits | 184 | 183 | ↓ | -1 |
Getting Electricity | 137 | 134 | ↓ | -3 |
Registering Property | 121 | 115 | ↓ | -6 |
Getting Credit | 36 | 30 | ↓ | -6 |
Protecting Minority Investors | 7 | 21 | 14 | |
Paying Taxes | 156 | 154 | ↓ | -2 |
Trading Across Borders | 126 | 122 | ↓ | -4 |
Enforcing Contracts | 186 | 186 | No change | |
Resolving Insolvency | 137 | 135 | ↓ | -2 |
Source - PHD Research Bureau, compiled from World bank
Comparing with other nations’ rankings, with exception of Bangladesh (173 rank), India 's ranking has remained lower than those of its South-Asian neighbors including Sri Lanka (99), Nepal (108), Maldives (116), Bhutan (125) and Pakistan (128). Its ranking is also reported lowest among BRICS nations, with South Africa positioned at 43; Russia at 62; China at 90 and Brazil at 120.
However, the report placed India amongst the countries which have received the highest score on the 3 new Indices namely extent of conflict of interest regulation index, extent of shareholder governance index and strength of minority investor protection index.
According to the report eight of the 11 economies with a population of more than 100 million reformed in at least one of the areas measured, while only 18 of the 34 economies with a population of less than 1 million did so. Among the 11 large economies, China , Mexico and the Russian Federation each implemented 2 reforms making it easier to do business, while India and Indonesia each implemented 3. The report enumerated the following aspects on which India has reduced regulatory complexity and cost or strengthened legal institutions in 2013/14:
Reforms Undertaken to reduce regulatory complexity and cost or strengthened legal institutions in 2013/14 by India
S.No. | Aspects | Reforms |
1. | Starting a business (Simplified pre-registration and registration formalities) | India made starting a business easier by considerably reducing the registration fees, but also made it more difficult by introducing a requirement to file a declaration before the commencement of business operations. These changes apply to both Delhi and Mumbai. |
2. | Getting electricity (Improved regulation of connection processes and costs) | In India the utility in Mumbai made getting electricity less costly by reducing the security deposit for a new connection. |
3. | Protecting minority investors (Increased disclosure requirements for related-party transactions, and increased director liability, expanded shareholders’ role in company management) | India strengthened minority investor protections by requiring greater disclosure of conflicts of interest by board members, increasing the remedies available in case of prejudicial related-party transactions andintroducing additional safeguards for shareholders of privately held companies. This reform applies to both Delhi and Mumbai. |
Source - PHD Research Bureau, compiled from World Bank
Worldwide, Singapore is the most business-friendly economy in the world, according to the Doing Business 2015 rankings; Sub-Saharan Africa had the highest number of business reforms compared to other regions and five of the top 10 most-improved countries.