How easy it is to start business in India?

October 21, 2011   ·   0 Comments

Thinking of starting a business in India by becoming an entrepreneur.  Think again. The World Bank yesterday released its much awaited, ‘Doing Business’ report and it should give the Govt, especially the Govt of Maharashtra some food for thought.

www.stockssavvy.comThis report, ranks countries based on their ease of doing business, from 1 – 183. A high ranking on the ease of doing business index means the regulatory environment is more conducive to the starting and operation of a local firm. This index averages the country’s percentile rankings on 10 topics, made up of a variety of indicators, giving equal weight to each topic. The rankings for all economies are benchmarked to June 2011. The 10 criteria considered are – ease of starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvencies. Can you even imagine India getting anywhere in the top when these are the criteria?

The best country, as per World Bank, to do business in is Singapore. This is followed by Hong Kong, New Zealand, with USA coming at fourth place. Denmark and Norway come in fifth and sixth place respectively, followed by UK at seventh place. This is followed by South Korea, Iceland, Ireland at 10th place. Saudi Arabia at 12th place is ahead of even Australia, Germany, Japan.

And where does India figure? Scroll down the list, keep on going down and just when you think the page will come to an end, India comes at the 132nd place. We are just a notch above Nigeria and place lower to West Bank and Gaza. Ethiopia, Nepal, Egypt, Kazakhstan, Pakistan, Mongolia, Serbia are all much, much ahead of India. And to think that we keep on comparing ourselves with China, which is at 91st place. The only solace is that India’s ranking has gone up 7 notches, from 139 to 132..

How does India figure in the 10 points of criterion? YoY, there is no change in the rankings of ease of starting a business; dealing with construction permits, enforcing contracts. In terms of betterment in rankings, India has fared better in terms of getting electricity, paying taxes and resolving insolvencies. But the rest, ranking has fallen – registering property, getting credit, protecting investors and trading across borders.

The Report is telling in terms of the time taken. For eg: it takes 227 days for getting the construction permits , 67 days to get electricity, 44 days to register a property, 254 days to oay taxes but the worst is time taken to enforce contracts, which takes 1420 days!

Top city to do business in India is Ludhiana, Hyderabad comes at number two, Bhubaneshwar at number 3, Gurgaon at number 4 and Ahmedabad is at number 5. Bengaluru is at 13th place, Chennai at 15th place, Mumbai at 10, New Delhi at 6, and the lowest on the ranking scale is Kolkatta.

No wonder, Whole India was re-united against government against the Anti-corruption. The corruption is not observed only on the high levels in the big scams but roots of corruption is present in each office where bribe are common to govt. employees if someone wants to get their work done. If India needs to come as a superpower in coming years, this is the first road blocker which they will have to clear. Environment should be congenial to entrepreneurship.

Which problems day to day basis while doing business in India or at the start up?

Source: Premiuminvestments

Rajesh Singla

Rajesh is the founder & CEO of Stockssavvy, Stocks analyst,financial advisor by choice,software engineer by fate,biker,gamer,cricket lover n enthusiastic person. He believes in doing things not just to get by but to get Ahead...

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