India still ranks abysmally low in the ease of doing business

Two reports have just been issued. The first is the World Bank’s assessment of doing business in India where India’s ranking among countries is depressingly low (considering the size of India’s economy). At 142nd of 189 countries India is in the bottom quartile of all countries. The second report assesses the relative success of the various Indian states in implementing business reforms and is issued by the World Bank and the Indian Government.

  1. Doing Business India 2015 World Bank
  2. State Assessment Report 14 September 2015

The WB assessment is broken down into 10 main areas and they have ranked 189 countries. In most categories the Indian ranking is embarrassingly low. (Even where the ranking is not too embarrassing, I note that there is a downside. Getting credit is apparently not too difficult but the other side of the coin is that the banks are sitting with a great deal of bad debt. Similarly minority interests are well protected but there are many cases of tyranny by the minority). I show the Indian rankings alongside those for Russia, China, Bangladesh and Mexico for reference.

In the overall ranking for Setting up a business India comes in at a lowly 142 of 189 countries. (Mexico 39, Russia 62, China 90, India 142, Bangladesh 173)

The rankings in the 10 main sub-categories are

  1. Starting a business –  Russia 34Mexico 67, Bangladesh 115, China 128, India 158
  2. Dealing with construction permits – Mexico 108, Bangladesh 144, Russia 156, China 179, India 184
  3. Getting electricity – Mexico 116, China 124, India 137, Russia 143, Bangladesh 188
  4. Registering property – Russia 12, China 37, Mexico 110, India 121, Bangladesh 184
  5. Getting credit – Mexico 12, India 36, Russia 61, China 70, Bangladesh 131
  6. Protecting minority investors – India 7, Bangladesh 43, Mexico 62, Russia 100, China 132
  7. Ease of paying taxes – Russia 49, Bangladesh 83, Mexico 105, China 120, India 156
  8. Trading across borders – Mexico 44, China 98, India 126, Bangladesh 150, Russia 155
  9. Enforcing contracts – Russia 14, China 35, Mexico 57, India 186, Bangladesh 188
  10. Resolving insolvency – Mexico 27, China 53, Russia 65, India 137, Bangladesh 147

The second report deals with the performance of the different states in implementing reforms. Of course the states ranked high are now crowing over those ranked lower down. The hope of the Indian government is that this league table will enhance competition between states and will add an impetus to development.

State rankings September 2015

The ranking of the NCR of Delhi is almost pathetic and lies even behind an Uttar Pradesh (boosted by Noida) and a Haryana (boosted by Gurgaon). And while Gujarat is crowing over Bihar and Tamil Nadu peevishly questions the data, they all seem to forget that these are just state rankings for a country ranking which is abysmally low. States lying below 50% are at levels comparable to the lowest 10% of the 189 countries that have been ranked.

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