Ease of Doing Business Index 2019 and India

  Jun 15, 2020

Ease of Doing Business Index 2019 and India

How are regulations related to business?

Regulation exists to protect workers, public safety, businesses, and investments. But inefficient or inadequate regulation can stifle entrepreneurial activity and business growth and impact the ease of doing business. Cumbersome red tape holds back more than individual businesses or investors: an economy’s ability to grow sustainably may suffer. Economic freedom to do business goes hand in hand with economic development and a thriving private sector, and these in turn underpin poverty elimination and the pursuit of shared prosperity.

What does EoDB do?

EoDB measures regulations across 190 economies in 12 business regulatory areas to assess the business environment in each economy. It has motivated governments worldwide to undertake business reforms with the goal of setting up sustainable economic growth.

The study looks at rules affecting a business from inception through operation to wind-down: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency.

What is measured in Doing Business?

It is based on a survey that consists of a questionnaire designed by the Doing Business team with the assistance of academic advisers. 

Is it a country wide survey?

No. Till 2019, Delhi and Mumbai were surveyed. Beginning 2020, the World Bank will expand its ease of doing business survey to two more cities—Bengaluru and Kolkata—in addition. World Bank has decided to have four cities from every country with a population above 100 million. 

What are the ten verticals based on which assessment is made?

A nation's ranking on the index is based on the average of 10 subindices:

EoDB 2019

How did India perform?

India climbed 14 rungs to 63, among 190 countries, making it one of world’s top 10 most improved countries for the third consecutive time.

India saw the biggest jump in ranking in “resolving insolvency" category. Its ranking improved substantially in Dealing with Construction Permits (to 27th from 52nd) and “Trading across Borders" (to 68th from 80th).

Compared with last year, India’s ranking deteriorated on two parameters -- “protecting minority investors" (from 7th to 13th position) and “getting electricity" (from 22nd to 25th) -- and remained unchanged in “enforcing contracts" at 163rd. India’s ranking improved in “Registering Property" to 154th rank from 166th despite a drop in score.

How may it help?

The sharp rise in the ranking may help the country lure multinational companies, looking at alternatives to China for investment amid Beijing’s trade war with the US.