The Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, Government of India, announced that India is one of the 10 most improved economies in the World Bank’s annual Doing Business Report.
The Doing Business Report is an annual report that looks at 190 economies, and measures business regulations and the protection of property rights across time.
The table below shows the factors that the report considers for rankings on the ease of doing business and new business reforms implemented that were not there in the previous year’s report.
Using the 11 indicators that the World Bank’s annual Doing Business analysis has been looking at for the last 15 years, the process followed is shown in the diagram below. It shows what is measured, and how it is connected.
Doing Business measures the processes for starting a business, obtaining a building permit, getting an electricity connection, transferring property, paying taxes, taking a commercial dispute to court, and resolving an insolvency case, as well as credit and equity market regulations and logistics of importing and exporting goods.
It also measures the coverage, scope and quality of credit information available from credit registries and bureaus
DIPP announced that India has improved it’s ease of doing business ranking for six out of the following 10 factors – starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
India, as one of the 10 most improved economies, has jumped 30 spots ahead to 100. India is the only country in South Asia and among the BRICS economies that has been featured as one of the top improved economies. India was also one of the three countries that implemented the highest number of business reforms – eight.
The dramatic improvements in India’s business environment in most of the aforementioned criteria is shown below.
Highlights in individual criteria are as follows:
1. Resolving insolvency – Rank improved from 136 to 103
2. Paying taxes – Rank improved from 172 to 119
3. Getting credit – Rank improved from 44 to 29
4. Enforcing Contracts – Rank improved from 172 to 164
5. Protecting Minority Investors – Rank improved from 13 to 4
6. Construction Permits – Rank improved from 185 to 181
DIPP credits this significant improvement in these areas of the Indian economy to the Prime Minister’s mantra of “Reform, Perform, Transform.”
Among the trends the World Bank report shows is a strong association between inequality, poverty and business regulation. It says that economies with better business regulation have lower levels of poverty on average. A 10% improvement in the distance to frontier (DTF) score is associated with a 2% reduction in the poverty rate, measured as the percentage of people earning less than $1.90 a day.
India’s overall Distance to Frontier (DTF) score improvement this year was 4.66. The distance to frontier score captures the gap between an economy’s current performance and the best practice across the entire sample of 41 indicators across 10 Doing Business indicator sets.
Read the full Doing Business report from the World Bank – Doingbusiness.org