From the Viewsroom

Chase reforms, not ranks

Tina Edwin | Updated on March 08, 2018

Ease of doing business should impact small businesses, too

The World Bank’s Ease of Doing Business 2018 report is not about the legal and regulatory environment faced by small or medium businesses, but about the perception of large enterprises, domestic and foreign, and their lawyers, accountants and business consultants. It is about the regulatory reforms that governments have carried out, but it is also more a quantitative than a qualitative analysis. It is true that the Centre has implemented a slew of reforms in the two years prior to the latest survey; these inevitably showed up in India’s ranking in the report. Many of these reforms were intended to bolster the perception about India among international investors.

The 30-place jump in India’s ranking to 100th position in one year proves that the Government has succeeded in what it set out to do. It also helped that respondents in the survey were lawyers, accountants, architects, freight forwarders and a host of other business consultants who work with large domestic and foreign businesses. Among the 340-odd respondents from Delhi and Mumbai who consented to be identified in the report, were 25 government representatives.

However, reform measures need not necessarily translate into improvement in business environment for all. Most reforms benefit only a segment of the population — in this instance, large businesses. Therefore, the Opposition and critics of the report are right when they say that pain points for small businesses have risen. Reforms that helped India move up the ranks include implementation of insolvency laws, more maternity leave for women, electronic payment of taxes and dealing with construction permits. India was also one of ten countries that implemented most reforms in the period between the 2017 and 2018 reports. Reforms are necessary, and many more are needed. But chasing rankings should not be the primary objective.

Senior Deputy Editor

Published on November 05, 2017

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