Ease of doing business


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Comparing India with best in clas countries on ease of doing Business

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Ease of doing business

  1. 1. Partha Tripathi
  2. 2. Ease of doing business is an average indicator based on 10 parameter such as Starting a Business Dealing with construction permits Getting electricity Registering Property Getting credit Protecting investors Paying Taxes Trading across barriers Enforcing contracts Resolving InsolvencySource of These data are world bank report on doing business
  3. 3. Doing Business parameters for the year 2012 of India is compared with 5 best in class countries in various parameters The Ranking data is compared using Data Table Major issues HighlightedNote: Caution in interpretation should be taken as Ranking High does not mean that the countries has high GDP growth. There are other factors such as market size, purchasing power etc which also influence GDP growth
  4. 4. Country Starting a Ease of Doing Business BusinessNew Zealand 1 3Australia 2 15Canada 3 13Singapore 4 1Hong Kong SAR, 5 2China India 166 132
  5. 5. Parameter Best 5 India CountryNo of Procedure to Start a 1-3 12Limited Liability CompanyNo of Days to complete the 1-5 29procedureCost for Incorporation( % on 0.4-1.9% 46.8%Per Capita Income)Minimum Paid In capital(% on 0.0% 149.6%Per Capita Income)
  6. 6. Major Issues Areas of ImprovementHigher number of Procedures Number procedure can beNumber of days Taken is high but streamlined instead of gettingcan be taken care if the number of various identity numbers such asprocedure is streamlined ESIC, Employees Provident fund etc can be streamlined. Instead ofHigher Stamp duty multiple numbers reforms can beMinimum Paid in Capital Norms oriented toward few numbers Since the number of procedure are high it takes more time. Further now registering a company has become but registration with ESIC,EPFO is still not online. Stamp duty on Company formation can be reduced. Minimum Paid in Capital can be done away with
  7. 7. Country Dealing with Ease of Doing construction Business PermitHong Kong SAR,China 1 2New Zealand 2 3Singapore 3 1Georgia 4 16Saudi Arabia 4 12 India 181 132
  8. 8. Parameter Best 5 India CountryNo of Procedure to Legally 6-11 34Build a WarehouseNo of Days to complete the 26-75 227procedureCost for getting all Permits( % 17.8-34.4% 1631.4on Per Capita Income) %
  9. 9. Major Issues Areas of ImprovementHigher number of Procedures Number procedure can beMajor time taken in Approval of streamlined and made smarter.building plan, Obtaining NOC from Procedure can be compared withTree authority/ Environmental countries Like New Zealand,clearance & completion Certificate Singapore, Hongkongwhere it takes on average about 30 E Governance can be implementedto 60 days for each procedure across government DepartmentsNo Major Reforms undertaken in which are involved in NOC.the last 5 years Central Coordinator, with Electronic documentation storage and workflow for NOC can be Thought of.
  10. 10. Country Getting Ease of Doing Electricity BusinessIceland 1 9Germany 2 19Taiwan, China 3 25Hong Kong SAR, 4China 2Singapore 5 1 India 98 132
  11. 11. Parameter Best 5 India CountryNo of Procedure to Obtain 3-4 7Electricity ConnectionNo of Days to complete the 17-43 67procedureCost for Completion of 1.7-52.4% 216.2%Procedure( % on Per CapitaIncome)
  12. 12. Major Issues Areas of ImprovementMajor time taken in Sanction and Reduction in time for sanctioningactual connection and giving connection.No competition in an area. Increasing CompetitionLoss making Distribution utilities Bring Efficiency in Distribution Utilities by linking productivity with remuneration. Regulation in service level agreements
  13. 13. Country Registering Ease of Doing property BusinessSaudi Arabia 1 12Georgia 1 16New Zealand 3 3Belarus 4 69Armenia 5 55 India 97 132
  14. 14. Parameter Best 5 India CountryNo of Procedure to legally 1-3 5transfer title on immovablepropertyNo of Days to complete the 2-10 44procedureCost for Completion of 0.0-0.3% 7.3%procedure( % on Per CapitaIncome)
  15. 15. Major Issues Areas of ImprovementMajor time taken in Mutation of Reduction in time for Mutation.Property. Computerising Land recordsNo Major reforms in last 5 years
  16. 16. Country Getting Credit Ease of Doing BusinessMalaysia 1 18United Kingdom 1 7South Africa 1 35New Zealand 4 3United States 4 4Latvia 4 21Hong Kong SAR,China 4 2 India 40 132
  17. 17. Parameter Best 5 India CountryStrength of Legal Rights 10-9 8Index(0-10)Depth of Credit Information 6-5 4Index(0-6)Public Credit registry 59.7-0.0% 0.0%Coverage(% of Adults)Private Credit Bureau 100.0-0.0% 15.1%Coverage(% of Adults)
  18. 18. Major Issues Areas of ImprovementNo Major issues
  19. 19. Country Protecting Ease of Doing Investor BusinessNew Zealand 1 3Singapore 2 1Hong Kong SAR,China 3 2Malaysia 4 18United States 5 4Canada 5 13Ireland 5 10Colombia 5 42Israel 5 34 India 46 132
  20. 20. Parameter Best 5 India CountryExtent of disclosure index(0- 10-7 710)Extent of Director Liability 9-5 4Index(0-10)Ease of shareholders suit 10-6 7Index(0-10)Strength of Investor protection 9.7-6.0 6.0index(0-10)
  21. 21. Major Issues Areas of ImprovementLack of Directors Liability in areas Improving in the areas of Directorssuch as Paying back profits and Liability such as repaying profitdamages to shareholders in case earned and paying damages inof willful Fraud case of fraud committed by Directors.
  22. 22. Country Paying Taxes Ease of Doing BusinessMaldives 1 79Qatar 2 36Hong Kong SAR, 3China 2Singapore 4 1Ireland 5 10 India 147 132
  23. 23. Parameter Best 5 India CountryTax payments ( No per year) 3-8 33Time required to comply with 0-84 2543 major taxes (hours/year)Total tax rate(% on Profit 9.3-27.1% 61.8%before tax)
  24. 24. Major Issues Areas of ImprovementMore number of taxes Streamlining no of taxes to be paidElectronic filing is present in all Electronic filing for taxes whichtype Statutory payments are not yet done such as ESIC, EPFO
  25. 25. Country Trading Across Ease of Doing border BusinessSingapore 1 3Hong Kong SAR,China 2 1Estonia 3 89Korea, Rep. 4 26United Arab Emirates 5 12 India 109 132
  26. 26. Parameter Best 5 Country IndiaDocuments required to Export 3-4 8(Numbers)Time required to Export (Days) 5-7 16Cost Required to 456-725 1095Export(USD/40’ Container)Documents required to Imports 3-5 9(Numbers)Time required to Import(Days) 4-7 20Cost Required to Import 439-725 1070(USD/40’ Container)
  27. 27. Major Issues Areas of ImprovementMore number of Documents Streamlining no of Documents forTime taken for processing Export as well as importsCost of Processing Benchmarking with Best in class toDocuments preparation times understand the issues Reduction in cost of processing
  28. 28. Country Enforcing Ease of Doing Contract BusinessJapan 1 63Singapore 2 3Canada 3 25Norway 4 60Finland 5 45 India 182 132
  29. 29. Parameter Best 5 India CountryTime( Days) 150-570 1420Cost(% of Claim) 9.9-32.2% 39.6%Procedures( numbers) 21-36 46
  30. 30. Major Issues Areas of ImprovementTime taken to complete Trials Judicial procedures so that Trails are concluded quickly Filling up vacancies
  31. 31. Country Resolving Ease of Doing Insolvency BusinessNew Zealand 1 3Singapore 2 1Hong Kong SAR,China 3 2Malaysia 4 18United States 5 4 India 128 132
  32. 32. Parameter Best 5 India CountryTime in Years 0.8-1.5 7Cost to recover Debt (% of 1-15 9Estate)Recovery Rate for Creditors 44.6-91.3% 20.1%(Cents on the Dollar)
  33. 33. Major Issues Areas of ImprovementTime taken are very High to Bench marking with Singapore,resolve Insolvency New Zealand, HongkongRecovery rate for creditors are low Time bound disposal of cases
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