International Finance Corporation, the private sector lending arm of World Bank, on Thursday said India can greatly enhance its business environment if the best practices, currently prevalent only in some cities, can be replicated across the country.

"India can jump 55 places if best regional practices (in ten business areas) are adopted nationwide," IFC's chief economist Michael Klein said at a panel discussion on the Doing Business 2008 Report of the World Bank.

India is currently ranked 120 in the Doing Business Index.

The report pointed out that best domestic practices in the area of starting a business prevails in Jaipur, dealing with licenses in Bhubaneswar, registering property in Hyderabad, paying taxes in Bhubaneswar and Chandigarh, trading across borders in Chennai, enforcing contracts in Bhubaneswar and closing a business in Bangalore.

These practices, if adopted by the entire nation, would significantly improve the business environment in India, he said, adding that the country's ranking in 2008 survey went up by 12 places to 120.

Klein further said that many countries have been focusing on the reforms relating to starting a business but were often found wanting in so far as taking up labour reforms were concerned for fear of political fallout.

Tax reform, he said, was the second most popular reform agenda among nations as it helped the industry as well as the exchequer by increasing compliance and improving realisation.

Pointing out that reforms create growth potential and attract investments, the IFC's chief economist said, "China, India and Vietnam will keep reforming and create lot of business opportunities."

In the area of enforcing contract, India ranked 177 out of 178 nations, the Doing Business 2008 report said, adding that it takes almost four years to resolve a commercial dispute through courts in Mumbai compared with slightly over a year in Shanghai.

Similarly, it takes 10 years to go through bankruptcy cases in India as against less than 2 years in Shanghai.

Another area of reform needed is property registration, the report said. "It takes two months to transfer and costs 7.7 per cent of India's gross national income. In China, it takes half the amount of time and cost."

To ease the business environment, Klein said it was necessary to ensure that "success of an entrepreneur depends on rules and not on personal contacts. The rules take out the personal connection business."

Participating in the panel discussion, HDFC [Get Quote] chief economist Abheek Barua expressed concern at the way the stock markets have started discounting of policy changes and reforms.

"Markets do not respond to these changes. This is alarming", he said, adding that people should get out of the assumption that Indian economy would continue to grow at 8.5 per cent in a bad year and 9-10 per cent in good years come what may.

Speaking on the occasion, managing director of ICRA Ltd [Get Quote] P K Choudhury said the two biggest challenges that the companies face today are "wage cost and space cost."

He said there is shortage of manpower with required skills and those who have them demand very high salaries.

Similarly, the cost of property has gone up to a level no one could have imagined two years ago, he added.