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Shining India’s rank slips in ease of business

India may be shining with BRIC partners in the high-growth game, but when it comes to ease of doing business, it ranks below Pakistan, Bangladesh and Nepal, says an annual World Bank report.

business Updated: Sep 10, 2008 20:44 IST
Gaurav Choudhury

India may be shining with BRIC partners Brazil, Russia and China in the high-growth game, but when it comes to ease of doing business, it ranks below Pakistan, Bangladesh and Nepal, says an annual World Bank report that measures red tape and regulatory hurdles across the planet.

In overall terms, the nation slipped two notches to the 122nd rank, below its South Asian neighbours in the 'Doing Business Report 2009' report prepared jointly by the Bank and its private-lending arm, the International Finance Corporation.

The report was released on Wednesday. The government says things are getting better, though the current year’s rank shows a slippage.

Singapore retained the top place in the rankings that cover 181 countries abd provides quantitative measures of regulation in aspects including procedures to start a business, getting credit, paying taxes, enforcing contracts and closing a business.

In all these aspects, India, despite the launch of sweeping reforms in 1991, is mired in the complex bureaucratic ways.

Sabine Hertveldt, a co-author of the report, told Hindustan Times from Washington that India was “increasingly committed to agendas for business-friendly reforms.”

“What has dragged India down this is the slow pace in enforcing contracts where it ranks 180 among 181 countries. Enforcing contracts in Pakistan and Nepal are faster, Hertveldt said.

A top government official, who did not wish to be identified said that a Committee of Secretaries (CoS), has directed follow-up action based on last year’s report.

However, he added that considerable progress had been achieved during the last 12 months in easing procedural delays in India.

“Acting on last year’s report, the government has developed a model where 11 procedures such as approval of name and memorandum and articles of association, obtaining permanent account numbers, registration for value added tax etc, are now completed in 16 days instead of 35 days as pointed out by the previous report,” the official said.

On registration of property, another time consuming issue in India, the National Institute of Urban Affairs (NIUA) has been assigned the job of developing a model to cut back on time taken and ease up procedures.

“We have requested the World Bank to take into account these actions and developments, while finalising the next report,” the official said. The report, released on Wednesday, has placed Nepal above India at the 121st position, Bangladesh at 110 and Pakistan at 77.

Industry chamber Ficci’s secretary-general Amit Mitra said the two biggest “rent seeking” activities that adversely affect business—monopolies and restrictive trade practices and licensing—had seen major de-regulation in the last decade. “The biggest challenge is remove the small but difficult procedures that affect the entire course of the business, particularly at the state level,” Mitra told Hindustan Times.

A top executive of a global pharmaceutical company, who did not wish to be identified, said infrastructure and power were the major impediments for business in India.