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India Moves Up in Ease of Doing Business Report
Oct 30, 2015

It may have become easier for Indian businesses to start a business, but their access to credit and ease of paying taxes has worsened, according to the World Bank’s Doing Business Report 2016. India now ranks 130 out of 189 countries in the ease of doing business, moving up four places from last year’s adjusted ranking of 134.

Key Points

  • The biggest improvement was under the head of ease of ‘access to electricity’, where it moved up 29 spots to 70.

  • A cause of concern was that the ‘getting credit’ ranking has slipped from 36 to 42, implying that it has become much more difficult to get credit in India despite the government’s efforts at financial inclusion and pushing ease of credit delivery.

  • In the area of protecting minority interests of shareholders, India is ranked at eight, its best ranking across all parameters.

  • India also slipped one spot in the criteria of ease of paying taxes.

  • In 2004 it took 127 days to start a business in India. In 2005 this has been reduced to 29 days.

  • In India the establishment of debt recovery tribunals reduced nonperforming loans by 28 per cent and lowered interest rates on larger loans, suggesting that faster processing of debt recovery cases cut the cost of credit.

  • In paying taxes and enforcing contracts India is now ranked at 157th and 178th spots respectively.

  • In trading across borders, India ranks 133rd and in resolving insolvency, it ranks 136th.

  • In India it takes entrepreneurs in the region an average 98 days to register property, which is more than twice the global average.

  • The list is topped by Singapore, followed by New Zealand, Denmark, South Korea, Hong Kong, Britain and the US.

  • Pakistan in fact has slipped 10 spots from 128 last year while China has moved six spots in a year from 90 since the last report.

Last year, Pakistan was ranked 128 and Bhutan was 125. India was ranked 142, Afghanistan 183, Bangladesh 173.

Last year, India was ranked 158 in starting a business, dealing with construction permits (158), Getting electricity (137), Registering property (121), Getting Credit (36) Protecting minority investors (seven), paying taxes(156), trading across borders (126), enforcing contracts (186), and Resolving insolvency (137).

For any big economy, a rank improvement of 12 is a remarkable achievement. Going from 142 in the world to 130, as India has done, is very good sign. It gives a good signal about the way things are moving in India.


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