What exactly is ‘Ease of doing business’

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India jumped 14 ranks up in the ease of doing business index of the World Bank Report 2020 and reached to the 63rd position. This ranking comes at the time when the country is being cautioned by institutions like the World Bank and IMF for a major slowdown in the economy.

Is the current economic slowdown in any way related to the ease of doing business rankings of this year?

So, what exactly is ‘Ease of doing business’?

Ease of doing business is an index published by the World Bank, which reflects the ease with which business can be conducted in a country. These rankings turn to several parameters for bringing out the final index, some of them being the ease of starting a business, protecting minority investors, and trading across borders.

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Picture Credits: World Bank

We also need to keep in mind that while studying this index, World Bank surveys parameters only from the two largest business cities in a country. In the case of India, these are Delhi and Mumbai. However, the survey shall also include Bengaluru and Kolkata in the coming years.

Analyzing the track record of India in these rankings since the year 2014, it has moved up drastically from 142nd to 63rd in 2019. It has shown positive movement in parameters like dealing with construction permits, trading across borders, and in resolving solvency. On the other hand, the drawbacks have been in protecting minority investors, getting credit, and in enforcing contracts.

In the rankings, New Zealand secured the topmost position, which was followed by Singapore and Hong Kong. Also, the index includes a list of top 10 improving economies of the world, in which India’s presence is evidence of the regulatory efficiency and quality along with the strong will of the policymakers. The other economies with the most notable improvement in Doing Business 2020 are Saudi Arabia, Jordan, Togo, Bahrain, Tajikistan, Pakistan, Kuwait, China, and Nigeria.

Along with the Prime Minister, Nirmala Sitaraman, the Finance Minister of India, is taking these rankings as an encouragement to make India reach in the top 50. She stated that the Ministry would soon come up with a plan to encourage more multinational companies to shift production to India. The World Bank praised the steps taken by India in reforming its economy in recent times that proved to be one of the significant factors in its continuous growth in rankings.

Electronic submission of documents made importing and exporting an easier task than before, where the functioning became convenient due to the presence of a single electronic platform; it further said.

The ease of doing business ranking index would be extended to two more cities, i.e., Kolkata from West Bengal and Bengaluru from Karnataka in the next year. It would be interesting to witness the modifications in the survey in the following year with more depth on the one hand, and with the country being under the scanner regarding the economic slowdown, on the other.


Vasundhara Singh has completed her LL.M. in International and Comparative Law from NUJS, Kolkata in 2019. She is a legal researcher and a contributing writer at The ArmChair Journal

Featured Image Credits: Sri Harsha Dantuluri

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