India falls behind Nepal B'desh in business ranking
As per the World Bank - International Finance Corporation doing business ranking, India is ranked at 122,below that of neighbours, including Nepal, Bangladesh and Pakistan.
By ET Bureau |
NEW DELHI : Inefficient enforcement of contracts, archaic bankruptcy laws, endless delays in issuing construction permits and lack of online remitting facility for a large number of payments have dragged India further down in the World Bank��� International Finance Corporation doing business ranking for 2009.
India is now two notches down at 122, below that of neighbours, including Nepal, Bangladesh and Pakistan. The report, which ranks countries on the basis of ease of doing business, has placed Nepal at 121, Bangladesh at 110 and Pakistan at 77.
Talking to ET, co-author of the report Sabine Hertveldt attributed India���s low ranking to cumbersome procedures mainly in four areas.
���Inefficiency in the enforcement of contracts and resolution of bankruptcy cases are two key areas where India needs to improve a lot. Often, it takes decades to complete insolvency proceedings.
India ranks at 140 in closing a business, while it stands at 180 in enforcement of contracts. Another area of concern is the inordinate delay in issuing construction permits, where India stands at 136. To issue a building permit, India takes 225 days, out of which drawing plan approval alone takes 145 days.
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Getting approvals is also a costly affair. The process, which includes securing utility connections, involves 20 steps, while the regional average is 16,��� said Ms Hertveldt.The other area where India lags far behind is the lack of online payment facility. ���There is no online payment facility for 48 of the 60 different payments that small and medium enterprises have to make in a year. This includes payment of value added tax and payments to Employees��� State Insurance Corporation,��� added Ms Hertveldt.
The report, which has ranked Singapore as the best place to do business, covered 181 countries providing quantitative measure of regulation for starting a business, getting credit, registering property, paying taxes, enforcing contracts and closing a business.
The report, however, said India has made improvements in protecting the interests of minority shareholders in companies. ���India ranks at 38 in protecting minority interests. Once the government enacts the new company law and introduces insolvency reforms, India���s standing in the index would improve,��� added Ms Hertveldt.
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