World Bank’s Ease of Doing Business 2020

Context : 

  • Recently India has climbed 14 places, to be ranked 63 among 190 countries, in the World Bank’s Ease of Doing Business 2020 report. It was also among the top ten economies with the most notable improvement in doing business.

About Ease of Doing Business (EDB)

  • The EDB, an indicator put out by the World Bank, is meant mainly as an index of the effect of government regulations on running a business. It is also meant to reflect the extent of property rights in a society
  • A country’s ranking is based on the extent to which government regulations facilitate the following: starting a business, obtaining construction permits, getting an electricity connection, registering property, accessing credit, protection of investors, paying taxes, trading across borders, enforcement of contracts and resolving insolvency.
  • From a rank of 134 in 2014, India’s rank improved to 77 in 2018 and 63 in 2019.
  • Criticism : It measures the effect of government regulations alone. While it is important to take this aspect into account, in any situation the ease of doing business is dependent upon other factors too.

Details of the new ranking

  • The country performed better in six of the ten parameters used for ranking including starting a business, dealing with construction permits, trading across borders, resolving insolvency, paying taxes and getting electricity.
  • In the three areas of getting credit, protecting minor investors and enforcing contracts, India fared the same as last year while its performance fell for registration of properties.
  • The cities covered in India for carrying out the study continued to be New Delhi and Mumbai despite some speculations that this time Bengaluru and Kolkata, too, would be included.

Source: IE