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Ease of doing business: India ranks worse than Pakistan

Last updated on: October 29, 2014 18:21 IST
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Image: Wipro Chairman Azim Premji (R), Infosys co-founder N R Narayana Murthy (2nd R), Mukesh Ambani (C), chairman of Reliance Industries, Rahul Bajaj , chairman of the Bajaj Group. Photographs: Adnan Abidi/Reuters

Even as Prime Minister Narendra Modi projects India as the destination for manufacturing, India’s ranking in World Bank's ‘Ease of Doing Business’ has slipped further.

It takes 30 days and 13 procedures to register a company in Mumbai, while in New Zealand it takes just half a day.

India has been ranked at 142 among 189 countries in the latest World Bank's "Ease of Doing Business" report, a drop by two places from the last year's ranking.

In the 2014 report, India had 52.78 points and in this year's report it has 53.97 points.

The latest ranking, however, does not take into account the latest slew of measures taken by Modi government to make India a business friendly destination.

"We do not want to send the impression that the drop in India's ranking is connected in any way with the current political situation (government)," Augusto Lopez-Claros, Director, Global Indicators Group, Development Economics, World Bank Group said.

Image: Prime Minister Narendra Modi at the launch of the Make in India Mission at Vigyan Bhavan in New Delhi. Photograph: PIB.

"It is absolutely true that the new government of Mr Modi has made it very clear that they see the creation of a better investment climate and a more friendly business friendly environment in India a top priority. However, it is important to remember that the new Government did not come into office until the second half of May," he said.

Among other major countries, the US has been ranked seventh, Britain (eight), China (90), Sri Lanka (99), Nepal (108), Maldives (116), Bhutan (125), and Pakistan (128).

Rita Ramalho, lead author of the Doing Business report, World Bank said India's ranking dropped, despite improvement in its business environment, because other countries improved.

Reforms in India

While India made starting a business easier by cutting down the registration fees, it has another drawback. A requirement to file a declaration before starting business has made the procedure difficult.

Meanwhile, India has strengthened norms on minority investor protection.

Getting electricity connection is less expensive as the security deposit for a new connection has been reduced.

Take a look at the 10 countries where it is easiest to start a business…

Image: People wait to watch a laser light show along Marina Bay overlooking the central business district. Photograph: Edgar Su/Reuters

Singapore

Ease of doing business: 1

Starting a business rank: 6 

Singapore is the world’s preferred destination for doing business. It takes 2.5 days and just 3 procedures to register a firm in Singapore. 

Reforms

Enforcing contracts has become easier in this developed nation with a new electronic litigation system.

An online procedure for property transfers also makes business transactions easier.

(A high ease of doing business ranking means the regulatory environment is more conducive to the starting and operation of a local firm.)

Image: A view of the city skyline from Westhaven in Auckland. Photograph: Jacky Naegelen/Reuters

New Zealand                           

Ease of doing business: 2

Starting a business rank: 1 

It takes half a day and just 1 procedure to register a firm in New Zealand. 

Reforms

New Zealand has improved access to credit information.  

Enforcing contracts is made easier, which makes sure a speedier and less costly adjudication of cases.  

Image: A cityscape of Hong Kong. Photograph: Bobby Yip/Reuters

Hong Kong                             

Ease of doing business: 3

Starting a business rank: 8

It takes 2.5 days and just 3 procedures to register a firm in Hong Kong. 

Reforms

Hong Kong has strengthened minority investor protection. However, starting a business is more expensive as registration fee has been hiked.

Image: Boats are seen anchored at the 17th century Nyhavn district, home to many shops and restaurants in Copenhagen. Photograph: Bob Strong/Reuters

Denmark

Ease of doing business: 4

Starting a business rank: 25 

It takes 5.5 days and just 4 procedures to register a firm in Denmark. 

Reforms

Denmark made starting a business easier by reducing the paid-in minimum capital requirement.           


Image: A North Korean soldier waves to a Chinese tourist boat on the Yalu River near the North Korean town of Sinuiju. Photograph: Jacky Chen/Reuters

Republic of Korea       

Ease of doing business: 5

Starting a business rank: 17 

It takes 4 days and just 3 procedures to register a firm in Korea. 

Reforms

Transferring property easier now as time needed to buy housing bonds and to register the property transfer is reduced. With more transparency, it has strengthened minority investor protection. 



 

Norway                       

Ease of doing business: 6

Starting a business rank: 22 

It takes 5 days and just 4 procedures to register a firm in Norway. 

Reforms

Eliminating the requirement for limited liability companies to have their balance sheet examined by an external auditor if the capital is paid in cash, is good news.

Norway made starting a business easier by reducing the minimum capital requirement for private joint stock companies. 

Image: A view of Times Square in New York City. Photographs: Chip East/Reuters

United States                           

Ease of doing business: 7

Starting a business rank: 46 

It takes 4 days and 6 procedures to register a firm in United States. 

Reforms

With faster online procedures, starting a business has become easier in New York. 

Image: Traffic on the road and the Thames passes the Houses of Parliament in London. Photograph: Suzanne Plunkett/Reuters

United Kingdom                      

Ease of doing business: 8

Starting a business rank: 45 

It takes 6 days and 6 procedures to register a firm in United Kingdom. 

Reforms

Starting a business has become easier with speeding up of tax registration. 

By reducing the corporate income tax rate, the United Kingdom has made paying taxes less costly for companies.

Image: Tourists take part in the reindeer safari at Arctic Circle near Rovaniemi. Photographs: Kacper Pempel/Reuters

Finland                        

Ease of doing business: 9

Starting a business rank: 27 

It takes 14 days and 3 procedures to register a firm in Finland. 

Finland has slipped by one place to rank at 9th place this year. It ranks high on resolving insolvency cases.

Image: An aerial view of Sydney's Opera House and Circular Quay in the city's central business district. Photographs: Mark Baker/Reuters
 

Australia                        

Ease of doing business: 10

Starting a business rank: 7 

It takes 2.5 days and just 3 procedures to register a firm in Australia. 

It ranks high on getting credit and enforcing contracts. 

(Inputs: PTI)

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