India drops to 142 in Doing Business ranking
With India ranked 142nd in the new Doing Business report released on Tuesday, foreign investors are likely to need more than just an invitation to come and Make in India.
Just ahead of the troubled Palestinian West Bank and Gaza, India has slipped a couple of positions, and continues to languish among the world’s worst.
Singapore topped the ranking, done every year by the World Bank Group, with New Zealand, South Korea, United States, United Kingdom and Australia finishing in the first 10.
China topped India’s neighbourhood at 90, followed by Sri Lanka at 99, Nepal at 108, Bhutan at 125, Pakistan at 128, Bangladesh at 173 and Afghanistan at 193.
That’s out of a total of 189 economies.
But India did move the needle a bit.
It made starting a business easier by reducing the registration fee considerably, but, the report added, it also made it difficult at the same by demanding a declaration.
Getting a power connection became cheaper in the country’s two largest cities Delhi and Mumbai by slashing the amount required as security deposit.
Bolstering protection of minority investors by bringing in more transparency to the boardroom, and bringing additional safeguards for shareholders of privately held companies.
In fact, India ranked an impressive 7th worldwide in protections for minority investors. The other parameter on which India did well was on getting credit, coming in 36th.
India has had a testy relationship with Doing Business reports, questioning their credibility and their dismal findings, but also keeping them in the rearview mirror at all times.
Kaushik Basu, former prime minister Manmohan Singh’s chief economic adviser, admitted as much in his foreword for the report, as the bank’s chief economist now.
“I used, criticized, valued and debated the Doing Business report,,” Basu wrote, about his reaction to the report as a consumer. He in now on the manufacturing side.
He did not elaborate on possible impact of the report on decision making in the Indian government, but it is clearly, in his words, “valued” by some including chief economic advisors.
Much remains to be fixed. Getting power connection for a new business, for instance, takes 105 days, more than three times the Singapore average of 31 days.
It takes 47 days to register a property in India compared to 4.5 days in Singapore. And if things soured, resolving insolvency can take 4.3 years in India to 0.8 in the island nation.
Singapore may be an unfair comparison, for reasons of size. But West Bank and Gaza are hardly the kind of benchmarks to inspire a country of out-sized ambition such as India.