India jumps 30 spots to 100 in World Bank’s Business Rankings
New Zealand, Singapore top the list; China at No. 78 on ease of doing business rankings
India now ranks 100 out of 190 countries in the world in terms of ease of doing business, according to the latest report released by the World Bank. This is an improvement of exactly 30 spots over the previous year’s ranking. It is a big jump, no doubt. The previous WB Group’s Doing Business Rankings report had placed India at No. 130. New Zealand tops the list, followed by Singapore. Both countries are favorite destinations for business investments. China still fares better on the index, being placed at No. 78.
“It appears that the push for digitalization has improved processes set up for clearances and has succeeded in removing bureaucratic hassles. The improvement is driven by the installation of insolvency architecture, digitalization as well as the legal framework needed in order to reduce time and cost overruns, particularly for construction permits; improvements in tax payments and credit availability, as well as protection of investors. Technology has a big role to play in this,” says Shashank Dixit, CEO, Deskera.
What the World Bank report considers?
The report takes into account factors like the time, procedure, cost and minimum capital needed to start a business, register property, and get construction permits, electricity connection, and credit. The index also looks at protection of investors, trading across borders, and amount and number of taxes. Enforcing contracts and resolving insolvency are also factors attracting scrutiny.
“The time that is taken to get the basic facilities is a good indicator of how easy it is for a business to operate in India. Basic requirements such as electricity connection for a new warehouse, number of documents needed to open a new business, cost as well as time needed for export and import processes gives a fairly basic idea. There are other factors also which need attention such as the cost, time, and recovery rate for bankruptcy proceedings,” says an entrepreneur, who runs an exports unit from New Delhi.
Entrepreneurship is only remedy in a jobless economy
The business rankings also reflect that entrepreneurial activity has picked up pace over the last few years. The government too has been exhorting young people to turn entrepreneurs as the job market has stagnated. The Indian economy is just not producing enough jobs. According to the Economic Survey, annual employment growth in India was barely 0.5 percent during 2004-12, whereas the labor force growth was around 2.9 percent. According to the Indian Government’s very own Labor Bureau, India created only 135,000 jobs in eight labor-intensive sectors in 2015, whereas the number of people working or looking for jobs grew by more than 10 million.
If the country wants to be a highly preferred business destination, then this is a step forward. However, any country, aiming to be a world leader, cannot afford to be placed around 100 on the list.