Improving India's Ease of Doing Business Ranking: Key Factors and Solutions

The World Bank's annual Doing Business report serves as a benchmark for understanding and enhancing the regulatory environment for businesses across the globe. One of the core goals of this report is to provide a clear and transparent framework to measure the ease of doing business. India's journey towards improving its ranking within the top ten countries based on the Ease of Doing Business (EOD) is a testament to the nation's unwavering commitment to reform and progress.

The Basis for Ranking

The Ease of Doing Business Rank is determined through ten key parameters that relate to starting and conducting business within a country. These parameters include:

Starting a business Dealing with construction permits Getting electricity Registering property Getting credit Protecting minority investors Paying taxes Trading across borders Enforcing contracts Resolution of insolvency

India's Position in EOD

India has been a notable performer in the 2019 study, with its rank improving from 100 to 77 among 190 countries. Over the past five years, the nation's rank moved from 142 to 77, showcasing significant progress. However, this improvement is not uniform across all parameters. India's improvements have been particularly pronounced in trade and construction permits.

Bottlenecks in India

Despite these improvements, India still faces several challenges:

Property Registration: The process of registering property in India takes 69 days, a stark contrast to New Zealand, which completes the same process in just 1 day. Tax Payments: Indian businesses face the burden of paying approximately 13 types of taxes, whereas Hong Kong businesses manage only three tax payments in a year. The average tax rate globally is less than half of India's rate.

Strategies for Improvement

To further enhance its ranking and create a more favorable business environment, India must focus on several strategic areas:

Enforcing Contracts

A strong and effective contract enforcement mechanism is crucial for maintaining business confidence, reducing uncertainty, and fostering fair competition. Ensuring that contracts are swiftly and fairly enforced can significantly boost the nation's EOD ranking.

Streamlining Processes

The establishment of a one-stop shop for contract permits, nationwide, can substantially reduce the time and effort required to start a business. Speeding up the insolvency process through a robust legal framework would also be beneficial.

Reducing Tax Burden

Implementing a comprehensive tax reform that reduces the number of tax payments and simplifies tax rates can greatly benefit Indian businesses. A single window clearance system for property registration would also streamline the land registration process.

Conclusion

India, with its rich tapestry of geographic, social, legal, technological, political, and economic factors, faces unique challenges. However, with the common support and commitment to reform, the country can reach among the top 10 in the Ease of Doing Business rankings. This would truly reflect the nation's unity in diversity and its progress toward a more business-friendly environment.

Globally, India's journey to improve its business environment serves as an inspiration for other nations, demonstrating the transformative power of reform and systematic change.