Relevance : GS Paper III
Context
There has been a rise in India’s ranking by 14 places to 63 in the World Bank’s Ease of Doing Business 2020 survey.
Some important data
- India figures in the top ten most improved countries in the world for the third consecutive year.
- From being ranked 142 in 2014 to 63 in 2020, it has been a significant upward journey for the country.
- The latest improvement has come on the back of the implementation of the Insolvency and Bankruptcy Code (IBC).
- India’s rank has improved from 108 to 52 in the “resolving insolvency” category .
- The country’s ranking in the “Trading across borders” category jumped 12 places from 80 to 68.
- In “Dealing with construction permits” category, the country’s ranking has improved by 25 places from 52 to 27.
Still behind the competitors
- While the improvements are impressive and the rise in overall rankings in the last few years is noteworthy, the fact is that India is still below its competitors for global capital, particularly China, which at rank 31 is one level above France.
- The country lags in key metrics such as “Starting a business’, “Enforcing contracts” and “Registering property”.
Ranking based on Mumbai and Delhi only
- The rankings are based on samples and audits done in Mumbai and Delhi only (the World Bank has said it would be covering Bengaluru and Kolkata too from next year).
- Starting, running or shutting down a business may be easier in Delhi and Mumbai compared to Coimbatore or Hyderabad where it is probably more difficult.
- It is not easy to streamline processes across the country given India’s federal set up where States have a big say in several parameters that go into the ranking such as securing building permits, land approvals, electricity connections, registering assets etc. Yet, this is the ideal that the country should be striving for.
Conclusion
The easier part is now done and rise in rankings from hereon will depend on how much the Centre is able to convince the States to reform their systems.
