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Ease of Doing Business

India jumped 23 ranks in the World Bank's Ease of Doing Business Index 2018 to 77.

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Why is it in the news ?

  • India jumped 23 ranks in the World Bank’s Ease of Doing Business Index 2018 to 77.
  • It ranked 100 in the 2017 report.

More in the news

  • The Index ranks 190 countries across 10 indicators ranged across the lifecycle of a business from ‘starting a business’ to ‘resolving insolvency’.
  • With this improvement in ranking, India became South Asia’s top-ranked economy.
  • This year, India improved on six of the 10 parameters relating to starting and doing business in a country.
  • The rankings give a measure of how friendly the regulatory environment of a country is for doing business.
  • New Zeland has held on to the top spot, while Somalia is the worst place to begin a business. 
  • China is one of this year’s top 10 improvers, advancing more than 30 spots to 46th place in the global rankings. 

Causes

  • The rank has improved with regards to construction permits, trading across borders, starting a business and in getting credit.
  • India also replaced the value-added tax with the GST (Goods and Services Tax) for which the registration process is faster.
  • The government also made paying taxes less costly by reducing the corporate income tax rate and the employees’ provident funds scheme rate paid by the employer.
  • A well-designed insolvency framework of debt recovery.
  • India reduced the time and cost of export and import through various initiatives.

Ease of Doing Business Report

  • Ease of doing business is an index published by the World Bank.
  • It is an aggregate figure that includes different parameters which define the ease of doing business in a country. 
  • Economies are ranked on their ease of doing business, from 1”“190.
  • A high ease of doing business ranking means the regulatory environment is more conducive to the starting and operation of a local firm.
  • The indicators used for devising the index are as follows:
    1. Starting a business,
    2. Dealing with construction permits,
    3. Getting electricity,
    4. Registering property,
    5. Getting credit,
    6. Protecting minority investors,
    7. Paying taxes,
    8. Trading across borders,
    9. Enforcing contracts and
    10. Resolving insolvency.

Source

The Hindu, Indian Express.
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