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India moves up 12 places in World Bank's ease of doing business list

28 Oct 2015 Evaluate

The World Bank has ranked India at 130th place out of 189 countries in ease of doing business in its latest report “Doing Business 2016, Measuring Regulatory Quality and Efficiency”. This position is up 12 places from its original ranking last year and four places from its rank on a revised list. The rise in the 2016 ranking was primarily on account of improvement in two areas - ease of starting a business and securing an electricity connection.

India's distance to frontier (DTF) score used to compile the rankings improved to 54.68 in 2016 from 53.97 in 2015. The cut-off date for the ranking was June 1, implying that the improvement has been achieved in a short span on one year of new government taking over. In 2015 ranking, the last one of previous government, India had slipped a few notches to 142. The World Bank report has stated that India is one of the countries that have made the most improvement, capturing the initiative of the government in a separate section.

The World Bank ranks countries on 10 parameters viz, starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority shareholders, paying taxes, enforcing contracts, trading across borders and resolving insolvency. For India, the ranking covers data from Delhi and Mumbai, with weights of 53 per cent and 47 per cent, respectively. The report noted two areas of improvement that the utility in Delhi made the process for getting an electricity connection simpler and faster by eliminating the internal wiring inspection by the Electrical Inspectorate.  The utility in Mumbai reduced the procedures and time required to connect to electricity by improving internal work processes and coordination.

The report stated that the biggest improvement of India was recorded in getting electricity connection. On this parameter, India's ranking soared from 137th to 70th in the 139 country ranking. In terms of starting a business, India's ranking improved to 155 from 158 last year, essentially on account of elimination of minimum capital requirement, which was 111.2 per cent of income per capita till last year. Enforcing contracts also improved its rank to 178 from 186. In case of protecting minority shareholders India again scored a high rank of 8 though down one rug from 7 last year.

However, India's performance worsened in terms of trading across borders, with its rank falling from 126th to 133rd.The government is taking steps to make it easier to pay taxes but its ranking on this parameter fell from 156th to 157th. In a number of measures such as registering property and getting credit, the country slipped from last year. On the global front, Singapore retained the top spot in the rankings, followed by New Zealand, Denmark and South Korea. While China's ranking improved from 90th to 84th, Pakistan fell 10 positions to 138th from 128th last year.


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