India slips to 134th rank on Doing Biz list
Washington: Doing business in India appears to have got tougher with the country slipping to 134th place on this front in a global list compiled by World Bank, which ranks neighbours like China, Pakistan, Nepal and Bangladesh at better positions and is topped by Singapore.
The annual Doing Business report, released today by World Bank and International Finance Corporation (IFC), comes at a time when economic scenario is subdued and regulatory frameworks in India are already facing criticism from domestic industry leaders and international investors.
In the ranking of 189 economies, India's position has dropped to 134, below neighbouring China (96), Nepal (105), Pakistan (110) and and Bangladesh (130). India is also ranked lowest among the BRICS nations (Brazil, Russia, India, China and South Africa).
India has slipped from its last year's 131st position while as many as 114 other countries have stepped up their pace of improving business regulations in the past one year.
"In?2012/13, 114?economies implemented?238?regulatory reforms making it easier to do business ? 18 percent more reforms than in the previous year," the report titled 'Doing Business 2014: Understanding Regulations for Small and Medium-Size Enterprises'.
The latest report has documented 238 business regulatory reforms worldwide last year although there are no specific details about India on this front.
India's business environment has come for criticism on various issues in the past including in Vodafone tax dispute and recently in the case of industrialist Kumar Mangalam Birla. After a FIR was filed by CBI against Birla in a matter related to coal blocks allocation, several industrial leaders and even some ministers spoke about the need to improve business sentiment and investor confidence.
Last year, the government had set up an expert panel, headed by former Sebi chief M Damodaran, to suggest ways to improve ease of doing business in India. The committee submitted its report last month and has recommended a major overhaul of regulatory and administrative framework.
Encouragingly, the World Bank report said that India is making progress in terms of achieving highest performance. The country's distance to frontier (DTF) score improved to 62.74 percentage from 61.67 registered last year.
The DTF measure shows the distance of each economy to the "frontier," which represents the highest performance observed on each of the topics included in Doing Business.
An economy's distance to frontier is indicated on a scale from 0 to 100, where 0 represents the lowest performance and 100 the frontier.
As per the report titled 'Doing Business 2014: Understanding Regulations for Small and Medium-Size Enterprises', China is way ahead of India in the ranking at 96th position.
Other neighbouring nations -- Nepal (105), Pakistan (110) and Bangladesh (130) -- are also ranked above India.
Among BRICS grouping, Russia is placed at 92nd spot while Brazil is ranked 116. South Africa has cornered the 41st rank.
The report comes at a time when the Indian government is making efforts to boost sagging economic growth and the new Companies Act is getting implemented.
Meanwhile, the joint World Bank and IFC flagship report said. Governments around the world significantly stepped up their pace of improving business regulations in 114 economies last year.
"Doing Business shows that economies with better business regulations are more likely to empower local entrepreneurs to create more jobs ? another step in the right direction toward ending extreme poverty by 2030," World Bank Group President Jim Yong Kim said.
South Asia leads the world in implementing business regulatory reforms in 2012/13. Six of eight economies in the region completed 11 reforms simplifying the process of starting a business, strengthening access to credit, or easing the process for paying taxes, it added.
"... If economies around the world were to follow best practices in regulatory processes for starting a business, entrepreneurs would spend 45 million fewer days each year satisfying bureaucratic requirements," the report noted.
Meanwhile, to suggest ways to reform India's regulatory environment, the government had appointed a committee, headed by former Sebi chairman M Damodaran.
The panel's report, which has called for simpler drafting of rules and faster resolution of disputes, among others, is currently under the consideration of the government.