Context

• India has secured 77th position out of 190 countries in World Bank’s Ease of Doing Business Report 2019 which is 23 placeup since the last report.
• Improved ranking made India the first nation to be among the top 10 improvers in the second consecutive year.
• India has drastically improved its ranking since 2014(142nd rank) and emerged as one of the top improver not only in south Asia but also among BRICS Nations.

About

• Ease of Doing Business is an annual survey published by World Bank.
• It has its origin in a paper” The Regulation of Entry” first published in 2002 in the Quarterly Journal of Economics by Bulgarian economist Simeon Djankov.
• First Ease of Doing Business report was published in 2003.
• Countries are ranked on the basis their performance on 10 parameters.
• These parameters include dealing with construction permits; starting a business; enforcing contracts; trading across borders; getting electricity connection; getting credits; registering property; paying taxes; resolving insolvency; and protecting minor investor.
• Improved ranking indicates the overall efficiency of an economy.
• India performed well on 6 indicators; rest 4 indicators with no significant achievement are: registering property; paying taxes; resolving insolvency; and protecting minor investor.
• Sub Saharan Africa has been the region with the highest number of reforms each year since 2012.

Top 5 Rankers:

1. New Zealand
2. Singapore
3. Denmark
4. Hong Kong
5. South Korea

Top 5 Improvers (the economies with most notable improvements in Ease of Doing Business 2019):

1. Afghanistan
2. Djibouti
3. China
4. Azerbaijan
5. India

India and BRICS countries:

1. Russia
2. China
3. India
4. South Africa
5. Brazil

China and South Africa have witnessed drop in their ranking since 2014.

Reasons for improved ranking:

• Introduction of GST has made registration process faster; World Bank in its report had specifically mentioned Mumbai and Delhi.
• Implementation of the single-window clearance system in Delhi and the online building permit approval system in Mumbai. India has also streamlined and centralized its construction permitting process.
• India has also decreased border and documentary compliance time for both exports and imports.
• Reforms in both enforcing contracts and registering properties.
• Reform in Bankruptcy and Insolvency Code
• Digitalization of land records.
• Cooperation among central and state governments. (Lack of cooperation among state governments and center is the main reason of India’s poor performance in aforementioned four indicators).

Significance

Elevated ranking demonstrates India’s commitment towards providing conducive environment for business activities. It will fetch more investment to the country.

Learning Aid