While India’s rank for ‘ease of doing business’ has worsened to 142nd position globally, it fares much better in terms of protection of minority investors and credit availability at 7th and 36th places, respectively.
These are the only two categories (out of total ten considered by World Bank Group) where India is ranked among top-50 countries — a target set by Prime Minister Narendra Modi for the overall ranking.
Meanwhile, the country’s spot last year has been revised to 140 after making adjustments and reflects data corrections. It was at 134th position when the rankings were published last year.
Modi, in September, had said that India’s ranking could be improved to the 50th position by making government regulations easier.
India is ranked 36th with respect to ‘getting credit’ category while the country is placed at 7th spot when it comes to ‘protecting minority investors’.
In last year’s ranking, India was at 28th place in ‘getting credit’ category and 34th with regard to ‘protecting investors’.
“India strengthened minority investor protections by requiring greater disclosure of conflicts of interest by board members, increasing the remedies available in case of prejudicial related party transactions and introducing additional safeguards for shareholders of privately held companies,” the report titled ‘Doing Business 2015: Going Beyond Efficiency’ said.
On ease of getting credit in India, the World Bank report said, “... in India a little over a decade ago, an entrepreneur seeking a loan to grow his business would have had little luck because financial institutions lacked access to information systems to assess creditworthiness.
“Today, thanks to the creation and expansion of a national credit bureau offering credit scores and coverage on par with those in some high-income economies, a small business in India with a good financial history is more likely to get credit and hire more workers,” it said.
The report covers 189 countries.
The overall ranking is based on ten factors including ’starting a business’ (158th rank), ‘dealing with construction permits’ (184), ‘getting electricity’ (137)’registering property’ (121), ‘enforcing contracts’ (186), ‘trading across borders’ (126), ‘paying taxes’ (156) and ‘resolving insolvency’ (137).
In South Asia region, the report said India implemented the “largest number of regulatory reforms in that period (June 2013 to June 2014), with 20, followed by Sri Lanka with 16”.
This year, for the first time, the World Bank Group collected data for a second city in economies with a population of more than 100 million. In India, the report has considered both Delhi and Mumbai.
In a release, the World Bank Group said that India set the pace for regulatory reform in the region in 2013/14.
“It made starting a business easier by reducing registration fees and strengthened minority investor protections. And the electricity utility in Mumbai made getting a new connection less costly by reducing the security deposit,” the release noted.
Even though India made starting a business easier by considerably reducing the registration fees, the report said the country made it “more difficult by introducing a requirement to file a declaration before the commencement of business operations”.