World Bank on 27 October 2015 announced that India ranked 130 out of the 189 countries surveyed in terms of ease of doing business for domestic firms. It was revealed in the report entitled Doing Business 2016: Measuring Regulatory Quality and Efficiency.
As per the report, India could improve its ranking by 12 places from the 142nd position of the 2015 report by undertaking significant improvements in the regulatory framework for starting new businesses.
The findings of the report were based on collection of data in Mumbai and Delhi between June 2014 and May 2015.
India’s performance in 4 key areas
Starting a business: India was placed at the 155th position overall in this segment. However, it is still one of the areas of greatest improvement for India, as the number of days to start a business was cut down to 29 days in 2015 from much longer 127 days in 2014.
The progress is in this segment was attributed to business friendly initiatives like speeding up the process for obtaining a tax registration number, introducing online system for value added tax registration, replacing the physical stamp with an online version, etc.
Further, more recent initiatives like amending the Companies Act, 2013 to eliminate the minimum capital requirement and requirement to obtain a certificate to commence business operations also helped for this cause.
Dealing with construction permits: India showed very poor performance in this segment as it was placed at the 183rd position overall. However, the report pointed out that recent initiatives like introducing single window procedures to obtain construction permits in local bodies like Mumbai are expected to improve the performance.
Getting electricity: India ranked overall 70 among the surveyed countries as now companies can get connected to the grid and get on with their business in 14 days sooner than before in Delhi and Mumbai.
Registering property: India ranked 138. To improve performance in this segment, the report suggested for undertaking digitization of land records across the country, taking Karnataka as an example, to make records more easily accessible and more open for collaboration with external stakeholders.
Other findings of the report
• India was placed at the top 7th position in the Shareholder Protection Index out of the select group of 30 countries between 1990 and 2013.
• India is one of the top five countries in the world that showed higher level of worker as well as shareholder protection between 1970 and 2005.
• India is a fine example to demonstrate the linkage between faster processing of debt recovery cases and reduction in the cost of credit. Reduction in nonperforming loans (NPA) by 28 percent and consequently, lowering interest rates on larger loans was achieved by the establishment of debt recovery panels in India.