India has improved the regulatory environment for local entrepreneurs more than any other economy in South Asia since 2005, a new IFC and World Bank report has said.
In the past eight years, India implemented 17 institutional or regulatory reforms making it easier to do business, the report noted.
The report, ‘Doing Business 2013: Smarter Regulations for Small and Medium-Size Enterprises’, released on Tuesday, assesses regulations affecting domestic firms in 185 economies and ranks the economies in 10 areas of business regulation, such as starting a business, trading across borders, and resolving insolvency.
The report also records regulatory reforms in those areas from June 2011 to June 2012.
It finds that India is the first economy in the region to make dealing with construction permits easier for local firms since 2005.
In the past year, India established strict time limits for pre-construction approvals, reducing the time needed to process permit applications.
“The news is encouraging. India has made some tangible progress, especially on construction permits front,” said Jean Michel Lobet, Private Sector Development Specialist, Global Indicators and Analysis Financial and Private Sector Development Vice Presidency, World Bank-IFC.
He, however, felt that more needs to be done on simplifying the process and procedures for starting a business.
“The procedures are still complex. It takes 12 interactions with Government authorities and 27 days before you can get your business registered, up and running in India. In Canada, it takes one interaction and five days,” Lobet told Business Line over phone from Washington D.C.
Judicial reforms
There is also a need for India to initiate steps towards judicial reforms, he said, adding that it should be a long-term reform agenda.
“After establishing its first credit bureau in 2004, India focused mostly on simplifying and reducing the cost of regulatory processes in key areas such as starting a business, paying taxes, and trading across borders.
“These efforts notwithstanding, further progress is needed in coming years to release the vast potential of India’s private sector,” said Augusto Lopez-Claros, Director, Global Indicators and Analysis, World Bank Group.
Globally, Singapore tops the global ranking on the ease of doing business for the seventh consecutive year.
Joining it on the list of the 10 economies with the most business-friendly regulation are Hong Kong SAR, China, New Zealand, the US, Denmark, Norway, the UK, the Republic of Korea, Georgia and Australia.