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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 (http://www.moneylife.in/article/8/4215.html) 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.

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COMMENTS

Shadi Katyal

6 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

6 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.

p.v.maiya

6 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.

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