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India jumps 4 spots on World Bank's ease of doing business list

India still lags behind Nepal(99) and Sri Lanka(107) with Bhutan(71) claiming the highest spot in South Asia

BS Reporter  |  New Delhi 

India jumps 12 spots on World Bank's ease of doing biz list

The National Democratic Alliance (NDA) government's efforts towards making India a better place for business might have started showing results, with India jumping 4 spots in the World Bank's rankings in terms of ease of doing business. For 2016, India has been ranked 130th on a list of 189 countries, compared with a ranking of 134th this year, the steepest rise seen by the country in recent years.

The original ranking for 2015 had been pegged at 142, which would give India a jump of 12 ranks, but the WB's mid-year revision had bumped up India's rank to 134.

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.

"In 2014, the government of India launched an ambitious programme of regulatory reform, aimed at making it easier to do business. Spanning a range of areas measured by 'Doing Business', the programme represents a great deal of effort to create a more business-friendly environment, particularly in Delhi and Mumbai," said the report, titled Doing Business 2016, Measuring Regulatory Quality and Efficiency.

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.

India jumps 12 spots on World Bank's ease of doing biz list
The World Bank ranks countries on 10 parameters - 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.

In terms of starting a business, India's ranking improved to 155th from 158th last year, essentially on account of elimination of minimum capital requirement, which was 111.2 per cent of income per capita till last year.

However, the time required to start a business and the cost and the number of procedures for that rose compared to a year ago. While the time required increased from 28.4 days to 29 days, the cost rose from 12.2 per cent of income per capita to 13.5 per cent; the number of procedures rose from 11.9 to 12.9.

ALSO READ: We'll be among top 50 in World Bank rankings within 3 years: Amitabh Kant

The biggest improvement was recorded in getting electricity connection. On this parameter, India's ranking soared from 137th to 70th, while the number of procedures required fell from 25.5 to five. The number of days required to get a power connection declined to 90.1 days from 105.7 days last year.

On reliability of supply and transparency of tariff for electricity, India scored 5.5 on a scale of eight.

"We hope to jump 30-40 places in next year's report. Given the pace of reforms, we will definitely break into the top 100 next year. We are on track to achieving the target of moving into the top 50 in three years, as stated by the prime minister. We are determined to achieve it," said Amitabh Kant, secretary in the Department of Industrial Policy and Promotion.

India's performance, however, worsened in terms of trading across borders, with its rank falling from 126th to 133rd. This could be explained by a change in the World Bank's methodology to capture trade procedures. This year, India has reduced the number of mandatory documents for export and import from seven and nine, respectively, to just three.

The government is taking steps to make it easier to pay taxes but its ranking on this parameter fell from 156th to 157th.

First Published: Wed, October 28 2015. 00:58 IST
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