The Hindu Business Line : India moves up 12 places in ‘ease of doing biz’

New Delhi, Sept. 26 India has moved up 12 ranks in terms of ease of doing business, but is still placed in the bottom half among 178 economies across the world included in the ‘Doing Business 2008’ report published by the World Bank and its private sector lending arm IFC.

India’s overall ranking of 120 — based on 10 different indicators of business regulation that track the time and cost to meet government requirements for business start-up, operation, trade, taxation and closure — is below neighbouring countries such as Bhutan, Nepal, Pakistan, Sri Lanka and China, besides nations including Mongolia, Ghana, Zambia, Uganda and Swaziland.

The list has been topped by Singapore for the second consecutive year. Singapore is followed by New Zealand, while the US, Hong Kong, Denmark, the UK, Canada, Ireland and Australia make up the top ten.

Pick-up in reform

Despite its low position, India has been ranked as the top reformer worldwide for trading across the borders. The report noted that South Asia picked up the pace of regulatory reform over the past year to become the second-fastest reforming region in the world, on par with the speed of reform in the OECD countries.

“The pick-up in reform was led by India, which rose 12 places on the ease of doing business and made the reform of business regulation a policy objective…,” the report said.

Trade across borders

India improved significantly when it comes to areas such as getting credit, trading across the world, but its position has deteriorated in areas such as starting a business, employing workers, registering property, paying taxes and closing taxes.

“Besides making it easier to trade across borders, India increased access to credit by expanding credit bureau coverage to individuals as well as businesses. It also introduced an electronic registry for security rights granted by companies,” the report said.

The report finds that equity returns are highest in countries that are reforming the most, investors are looking for upside potential and they find it in economies that are reforming regardless of their starting point.

In an interesting observation, the report said that higher rankings on the ease of doing business were associated with higher percentages of women among entrepreneurs and employees.

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