India's 12 Point Jump In World Bank's Ease Of Biz Report Isn't Quite Correct

[The_Showstopper]

India's 12 Point Jump In World Bank's Ease Of Biz Report Isn't Quite Correct

Kaushik Basu said:

"If the changes that we saw thus far can be kept up and strengthened a little, it is not impossible for India to be in top 100 (ranking of the ease of doing business report) by next year."

Turns out India never moved 12 spots over last year.

Also Read: India's 12 Point Jump Is Significant According To Government, World Bank

The World Bank's website clarified that India only jumped 4 places, from 134 in 2015 to 130 in 2016. A dramatic change in methodology has meant that the ranking for 2015-a dismal 142-- was updated to reflect a new measurement philosophy. Based on data available as of June 2014 that changed the 142 rank to 130. This further implies that the substantial 8-point jump last year was updated to reflect the ease of doing business of policies implemented by the government in place till June 2014: 11 months of the UPA and 1 month of the current NDA government.

For what its worth, a time-series of India's performance through the years shows that India's has languished in the 130s for a while. In the 2014 edition it scored a 134 and in 2013 was ranked 131 and it scored its biggest leap--to 132 from 120-- in 2010. Therefore in it's latest ranking, save for dramatic improvements in the ease of starting a business and businessmen accessing electricity, India is still in the zone it's been for the last 5 years.

The World Bank's Doing Business series goes back to 2003 and there are significant changes to methodology that invariably complicates a simple comparison of the ease of doing business over the decade. In fact an attempt, at the website, to map a timeline of India's performance since the report's inception only generates results from 2015 and 2016.

According to the Wall Street Journal, "..India’s big leap in the re-calculated ranking isexplained by the fact that the World Bank this year added the reliability of the power supply to its measures of electricity access. Outages are far less common in New Delhi and Mumbai than in other parts of the country."

Policies implemented by the government, the World Bank said, of forcing entrepreneurs to deposit Rs 100,000 to incorporate a new company have been done away with. That move brings India in line with the 105 countries out of 189 in the Doing Business ranking that have no minimum paid-in capital requirement.

But along most of the 10 dimensions of business regulation that Doing Business considers, India’s rankings were unchanged from last year. The country slipped one place on the ease of paying taxes, to 157th in the world. On the ability to enforce contracts, India remains a dismal 178th.


India's 12 Point Jump In World Bank's Ease Of Biz Report Isn't Quite Correct

 

[[Bregs]]

These ratings are not issues by India or indian govt. the are correct or not who cares untill India is on path pf economic growth which it rightly is

 

[Nilgiri]

From the report:

http://www.doingbusiness.org/~/medi...s/Annual-Reports/English/DB16-Full-Report.pdf

In India the establishment of debt recovery tribunals reduced nonperforming loans by 28% and lowered interest rates on larger loans, suggesting that faster processing of debt recovery cases cut the cost of credit

Who improved the most in each region? Just as Georgia stands out in Europe and Central Asia for having made big strides toward better and more efficient business regulation, at least one economy stands out in every other region for its improvement in the areas measured by Doing Business: Rwanda in Sub-Saharan Africa; Colombia in Latin America and the Caribbean; the Arab Republic of Egypt in the Middle East and North Africa; China in East Asia and the Pacific; India in South Asia; and Poland in the OECD high-income group (figure 1.12).

India is the South Asian economy recording the biggest increase in the distance to frontier score since 2004. One of the areas of greatest improvement has been starting a business. In 2004 India cut time from the process for obtaining a permanent account number (an identification number for firms), and in 2006 it speeded up the process for obtaining a tax registration number. In 2010 India established an online system for value added tax registration and replaced the physical stamp previously required with an online version. And in the past year India eliminated the paid-in minimum capital requirement and streamlined the process for starting a business. More reforms are ongoing—in starting a business and other areas measured by Doing Business—though the full effects have yet to be felt (box 1.2).

BOX 1.2 Doing business in India—the path toward regulatory reform In 2014 the government of India launched an ambitious program of regulatory reform aimed at making it easier to do business. Spanning a range of areas measured by Doing Business, the program represents a great deal of effort to create a more businessfriendly environment, particularly in Delhi and Mumbai. One important focus is to make starting a business easier. In May 2015 the government adopted amendments to the Companies Act that eliminated the minimum capital requirement. Now Indian entrepreneurs no longer need to deposit 100,000 Indian rupees ($1,629)—equivalent to 111% of income per capita—in order to start a local limited liability company. The amendments also ended the requirement to obtain a certificate to commence business operations, saving business founders an unnecessary step and five days. Several other initiatives to simplify the start-up process were still ongoing on June 1, 2015, the cutoff date for this year’s data collection. These include developing a single application form for new firms and introducing online registration for tax identification numbers. Another focus is to make the process for getting a new electricity connection simpler and faster. Toward that end the utility in Delhi eliminated an internal wiring inspection by the Electrical Inspectorate—and now instead of two inspections for the same purpose, there is only one. The utility also combined the external connection works and the final switching on of electricity in one procedure. The utility in Mumbai reduced the procedures and time for connecting to electricity by improving internal work processes and coordination. It combined several steps into one procedure—the inspection and installation of the meter, the external connection works and the final connection. Now companies can get connected to the grid, and get on with their business, 14 days sooner than before. Improvements have also been initiated in other areas measured by Doing Business. To make dealing with construction permits easier, for example, a single-window system for processing building permit applications is being started in Mumbai—with the promise of greatly reducing the associated bureaucratic burden once fully implemented. And online systems for filing and paying taxes are being further improved to simplify tax compliance. Fostering an environment more supportive of private sector activity will take time. But if the efforts are sustained over the next several years, they could lead to substantial benefits for Indian entrepreneurs—along with potential gains in economic growth and job creation.

 

[TejasMk3]

Not 4, India moved up 12 places in WB’s ease of doing biz index | business | Hindustan Times

Ruling out any controversy over India’s ranking on the World Bank’s ‘Doing Business’ survey, its country director, India, Onno Ruhl said the methodology change happens almost every year and the position should be considered as 12 notches up.

The controversy occurred after the World Bank late on Tuesday released its latest ease of doing business report in Washington, which used a new methodology, showing India has moved up only four spots, from 134 last year to 130 this year.

However, Ruhl said that India’s performance based on last year’s methodology was 142 and this year it has moved up to 130. “No matter how you look at it, India has registered a significant shift in trend after several years of decline,” said Ruhl, adding, the ranking will improve further next year.

The upward movement was a significant move as India took initiatives in amending the Companies Act and made it easier for the small and medium enterprises to obtain electricity connection and to do business in the country, which actually helped the country improve its rankings, he added.

The target of reaching rank 50 in the next 3-4 years is doable considering the initiatives India is taking, he said. “The target is doable, but a lot of work needs to be done to get there”, Ruhl added citing examples of countries such as Russia, Rwanda, which have reached to above 50 levels from sub 100 levels in 3-4 years.

Ruhl said that construction permits issuance and enforcement of contracts are two parameters where India needs to lay emphasis on. He also lauded the government for initiatives over bankruptcy law, which he said the organisation is expecting to get cleared in the winter session of Parliament.

He said that the proposed Goods and Services Tax (GST) law is the most important reform towards creating a single market in India and if it is implemented by April 2016, its impact will be visible by 2018.