India slips 3 spots to 134 in ease of doing business

Better placed on protecting investors, firms getting credit despite overall slide

India has slipped three notches to the 134th spot in the ‘Doing Business 2014: Understanding Regulations for Small and Medium-Size Enterprises' report, topped by Singapore, according to the International Finance Corporation and the World Bank.

In the ranking of 189 economies, India has dropped from 131 the previous year, while Singapore continues to remain at the top. Singapore is followed by Hong Kong and New Zealand at the second and third positions, respectively.      

Others in the top 10 are the US (four), Denmark (five), Malaysia (six), Korea (seven), Georgia (eight), Norway (nine) and the UK (10).      

India has been ranked lower at 179 in terms of ease of starting a business in the 2014 list when its government is making efforts to improve the business climate. Last year, based on this criterion, India was at 177.      

The ranking is based on parameters, including starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. "The ranking and the underlying indicators do not measure all aspects of the business environment that matter to firms and investors or that affect the competitiveness of the economy. Still, a high ranking does mean the government has created a regulatory environment conducive to operating a business," the report said.

Protecting investors
The country is a much better place in terms of protecting investor interest and companies getting credit for their activities. When it comes to protecting investors, the country is at 34th position. It is 28th in 'getting credit'. However, the country is at 182nd position when it comes to dealing with construction permits.

"In 2012/13, 114 economies implemented 238 regulatory reforms making it easier to do business, 18 per cent more reforms than the previous year."

The report has documented 238 business regulatory reforms worldwide last year, though there are no details about India.      

Meanwhile, India's distance to frontier (DTF) score improved to 62.74 percentage from 61.67 registered previous year. The DTF shows the distance of each economy to the "frontier," which represents the highest performance observed on each of the topics included in Doing Business.      An economy's distance to the frontier is indicated on a scale from 0 to 100, where 0 represents the lowest performance and 100 the frontier.