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The great Indian growth story is playing out, but there are glitches galore in this saga

India’s roaring economy ranks 133rd among 183 countries in the ease of doing business

India is supposed to be emerging as a global economic powerhouse and the 'apple of the eye' for Western onlookers.

But a quantitative survey by the World Bank seems to conclude year after year that India is a terrible place to do business. How easy is it to do business here? How efficient are we when it comes to enforcing contracts or dealing with construction permits? How do we go about registering property or protecting investors? Are we able to provide quick credit and make timely tax payments? The World Bank's illuminating Annual Survey of Doing Business has just found that we have successfully managed to dig a deeper hole than before. India's spot in the rankings table is a lowly 133, out of the 183 global economies surveyed. While we have slipped a notch in the overall rankings since 2009, we have lost quite a bit of ground on some parameters.

The survey ranks countries on the following 10 parameters: starting a business, getting construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.

The overall top spot was secured by Singapore, like last year, followed by New Zealand. Hong Kong was third, followed by the United States, the UK, Denmark, Ireland, Canada, Australia and Norway.

Starting a business continues to be a headache for entrepreneurs, even as global admirers sing praises of India's corporate elite and their giant strides in world markets. India is ranked 169th on this count, having slipped a good three notches from last year's rankings. Giant stride, indeed. Dealing with construction permits and registering properties also remain quite a task for the people here, as fat red tape, and stifling bureaucracy, pose severe difficulties. How do we do when it comes to enforcing contracts? You guessed right. The World Bank wouldn't even need a survey to find out that this still remains a grey area - which is why we are stagnant at 182nd rank, in this respect. As if that is not enough, we have also regressed in our efficiency in getting access to credit and protecting investors, having slipped another three notches in rankings on both counts. Are the regulators listening?

Mercifully, we have put up a slightly improved show on a couple of parameters. For instance, we seem to have made a minuscule progress in encouraging cross-border trade through some timely reforms. Interestingly, under the parameter of closing down a business, India has moved a few notches higher, finds the World Bank survey.

Earlier, we had reported ( on how India is dropping down in the scale of logistics performance, according to the World Bank's Logistics Performance Index. Even war-ravaged Lebanon has better logistics systems than this country.



Shadi Katyal

7 years ago

We are a nation which like to read optimistic reports from all these Consultant firms but we forget that we had been slipping every year when it comes to World trade. we have lost position in every aspect.
we are great in pushing our goal posts .First it was 2005 than 2025 and it will come and go and nation will be poorer than she is now.
With present system of coalition government we have expanded so many ministries that one wonders when a new ministry of when to breath will come.
Ibn 64 years wed are unable to improve our Labour Laws and thus the unions till control.
wed have ministers like Mr. Ramesh who decides what is environmental good though nation may suffer. We make arbitrary judgments and let some of NGO and groups like Narbad Bachao andolan decided our future.
We still need MOU why?
Can we not learn from other nations how to make investments easy but has any NRI tried to open an account and look at the list of documents required. So how do we expect even NRI to invest.
when are we going to mature and stop all these andolans and Naka bundi and stoppage of work.We need discpline and ethics to work
The present polciy seems to be run by no one and redtape still rules and worst than Briotish days.

vivek v khare

7 years ago

It is an eye opner. Will our beareaucrats, ministers pay any attention to the eye opner report? All the positives like having favourable demographics having younger population, resorviour of talented manpower will go waste and will remain unproductive and under utilised.

I thank Moneylife for bringing such beautiful and interesting reports time to time on various issues concerning economic growth story of India.

Hope the report reaches to our planners and KALMADIS of the world and they find time to take corrective measures and save this wonderful country from going to docks.


7 years ago

India's ranking will never show significant variation in the foreseable future. Our single most imp problem is governance at all levels and it cannot be radiacallychange as the beneficiaries of the current system will not allow it. Blame the politicians, blame the bureaucrats, nothing will happen; shooting is as yet an unexplored option.

Banks want crutches to hobble towards financial inclusion

Confidence levels among bankers seem to be at an all-time low about carrying out the financial inclusion plan; some even call for non-banking entities to be roped in for the effort

The optimism among the banking fraternity about achieving financial inclusion seems to have waned. Head honchos of several leading banks have raised concerns about the current situation on this front and have also admitted to their inability to do the job themselves.

On the occasion of the FICCI-IBA Conference on 'Global Banking: Paradigm Shift' held in Mumbai today, some bankers expressed their views on the role of banks in the coming decade, of which financial inclusion is a key function being performed by banks. A tinge of exasperation and restlessness was fairly evident in the discussion as the bankers spoke about the 'progress' being made in this regard. Clearly, the confidence and optimism of a few years ago has given way to a sort of uneasiness, as bankers are being forced to rethink their strategies.

Saurabh Tripathi, partner and director, BCG India highlighted that bankers are not confident of being able to find a solution to serve the financially excluded in a profitable manner. "The possibility of creating a low-cost model for financial inclusion cannot be done with incremental changes in the existing models. 'No-frilling' is not going to work. The industry needs to think differently about creating a business model from scratch for this business, which has very low ticket size."

Mr Tripathi feels that this will not happen without the government supporting the effort in a significant manner. "Financial inclusion is not the solution to inclusive growth. It is just one of the ingredients. While the spotlight is on the banking industry to find a solution to financial inclusion, more efforts are required from the government to create rural infrastructure and livelihoods." 

Chanda Kochhar, CEO, ICICI Bank said, "It is a fact that very little has been done in terms of financial inclusion, compared to the needs of the country. Every one is still trying to find models that make this activity more economically viable.

Can things be done very differently and on a much larger scale? I think they can be, because there is a tipping point for everything. Now that we have the requisite technology and the regulations in place, there is enough scope to get more things done."

Commenting about the need to get non-banking entities involved in the process, Ms Kochhar said, "My strong belief is that it essentially has to be a bank-led model. But the bank needs to work with all entities in the ecosystem. For instance, banks and telecom companies need to operate together to facilitate the remittance part of financial inclusion. True financial inclusion means covering every need - saving, lending, insurance, remittance etc."

Rana Kapoor, managing director and CEO, Yes Bank believes that banks themselves cannot create a viable model around financial inclusion. "I believe financial inclusion efforts have to be based on market principles. I don't think that banks will ever be able to compete in this business unless there is an architecture which is somewhat subsidised. For banks, it will be very difficult to be able to create an economically-viable financial inclusion model. But if we are allowed to set up NBFCs and different cost structures and electronic interfaces, some of these things can be achieved."




7 years ago

Mr. kapoor wants to set up NBFC s. we had any number of NRFCs specially in Chennai which cheated common people by collecting deposits promising attractive rates of interest. They closed shop and people lost their lifelong savings. Can somebody enlighten as to what they did with all the money collected? Surely it ran to several thousands of crores. Instead of starting new NBFCs the closed shops can be revived by making the proprietors accountable for their misdeeds. Evidently several thousands of crores cannot vanish in thin air. It is not clear why no one including the PM talks about it.



In Reply to pantulu 7 years ago

Where is the time for our honourable PM to worry about all these things.He is more bothered to be subservient to the US in singning the nuclear deal and ensuring passing the nuclear liability bill in the parliament with favourable terms to the US and other EU countries.He is a honest man subservient to the other ministers in his cabinet who are looting the country.Where are the competent people in our country to lead the nation as ministers.Look at BJP falling at the feet of Sibu Soren and Reddy brothers.We are relatively blessed to have MMS as PM.If you voluntarily put your money in the greedy hands of the NBFCs offering huge return even God cannot help forget the PM


In Reply to K NARAYANAN 7 years ago

The incidents occured in 1996. At that point of time RBF was not considered to be a cheat. My point is how so much money can simply vanish and there is no one to question in our wonderful system. We saw some MP talking about Margadarsi Chit in Hyderabad though no depositor lost any money. We have yet to see someone talking about various NBFCs which swallowed thousands of crores deposited by ordinary people. I simply disagree with the suggestion that they do not have time to concentrate on the problems faced by common people. They do not have the will to do something constrictive.

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