Starting A Business In India Got Tougher Since Last Year: World Bank Report

India slipped from Rank 169 in 2012 to rank 173 this year in terms of starting business in the country, among a group of 185 economies compared globally, the Doing Business in India 2013 report by The World Bank.
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Starting a business in India has become tougher in the last year due to difficulties in tasks like getting electricity, resolving insolvency issues and paying taxes, according to a recent report.

India slipped from Rank 169 in 2012 to rank 173 this year in terms of starting business in the country, amongst a group of 185 economies compared globally, the Doing Business in India 2013 report by The World Bank.

DoingBusiness_2013_ranking

Overall, the business climate in India did not change as it maintained its ranking of 132 this year as well. Compared to the regional average ranking of 121, India was below average on the ease of doing business.

World Bank rank

Japan with a rank of 24 leads the list of comparator economies in the region in terms of ease of doing business in countries. Our neighbouring country China also has a rank of 91, making it easier for a business to start in China than compared to India.

The report found that, in order to start a business in India, it took 12 procedures, 27 days, costs 49.8% of income per capita and requires paid-in minimum capital of 140.1% of income per capita. In comparison in Japan it just requires 8 procedures, takes 23 days, costs 7.5% of income per capita and requires paid-in minimum capital of 0.0% of income per capita, to start a business.

Some of the key difficulties encountered while starting a business in the country where Enforcing contracts,dealing with construction permits,starting a business and paying taxes.

World Bank topics

Dealing with construction permits was one of the most difficult procedures. The report found that, in order to construct a warehouse in the country it required 34 procedures, takes 196 days and costs 1528.0% of income per capita.

Getting an electricity connections on the other hand was comparatively an easier task which only took 7 procedures, takes 67 days and costs 247.3% of income per capita.

World Bank Procedures

On the positive side globally India ranks at 23 and 49 at getting a credit for a business and protecting investors respectively.

The ranks were given based on 4 key indicators

  • Procedures: Number of procedures to legally start and operate a company.

  • Time: Number of calendar days required to complete each procedure.

  • Cost: Percentage of income per capita required to complete each procedure.

  • Paid-in minimum capital: Percentage of income per capita requires as paid-in minimum capital.

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