India Takes A Giant Leap In World Bank’s EODB 2019 Report

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In the current World Bank report of Ease of Doing Business (EODB) 2019, India’s rank has improved by 23 positions standing at 77. The country is now ahead of Oman and behind Uzbekistan in the overall ranking in DB 2019. India now stands on the first position amongst the other countries in the South Asia region. The report has recognised India in the top 10 improvers for the second consecutive year. India is also recognised as the largest country to achieve such a significant change in the DB 2019. If we compare the overall ranking of India in 2014 to current report, the country has climbed 65 positions from 142 in DB 2014.

India’s rank has notched up by 23 positions as India has taken steps to improve parameters such as starting a business, dealing with construction permits, getting electricity, getting credit, paying taxes and trading across borders.

India climbed 19 positions in the starting a business parameter overall. Currently, India is ranked at 137 in DB 2019 from 156 in DB 2018 report. This has happened as India has vastly streamlined paperwork. Introduction of Goods & Services Tax (GST) is a big step towards consolidating the complex tax structure, and earned the country a good ranking in Doing Business. To start a business in India, it now takes 16 days for the investor to complete 10 procedures and would cost around 14.4% of income per captia.

On the construction permits parameters, India has jumped 129 positions up in the DB 2019, now standing at 52. This jump of more than 100 positions has been possible because India streamlined the process of obtaining building permit and made it faster and less expensive to obtain a construction permit. It also improved building quality control by introducing decennial liability and insurance.

India has gone up a further five positions in the parameter getting electricity, now standing at 24 in DB 2019. The rank in this parameter moved up due to the reforms made in Delhi. The Delhi Electricity Regulatory Commission reduced charges for low voltage connections. To get an electricity connection is made easy in Delhi as the time is reduced for the utility to carry out external connection works.

In paying taxes parameter, India was up by two notches, placing India at 119 rank in DB 2019. India made reforms in the paying tax by replacing many indirect taxes into a single indirect tax called GST for the entire country. India also reduced the corporate tax rate and employee’s PF scheme rate by the employer. India went up by seven positions to 22 in getting credit parameter. India strengthened access to credit by amending its insolvency law. Secured creditors are now given absolute priority over other claims within insolvency proceedings.

India has performed very well in trading across the border parameter in the Doing Business 2019 report. The country has moved up 66 positions from 146 in DB 2018 to 80 in the current report. India reduced the time and cost to export and import through various

initiatives, including the implementation of electronic sealing of containers, upgrading of port infrastructure and allowing electronic submission of supporting documents with digital

signatures. In the parameter registering property, India’s rank went down by 12 positions in DB 2019 now at 166 from 154 in DB 2018 report and in the parameter protecting minority investors India’s rank went down by three positions, to 7th rank in the DB 2019. But being in the top 10 rank in the parameters indicates that India gives strong protection to investors’ money in the country.

China now ranks 46th in EODB
China has performed extremely well in all parameters of ease of doing business 2019 report and climbed 32 positions to 46th rank in DB 2019. In 2008, China ranked 86 for ease of doing business. In the start-up parameter China has moved up 65 notches and stands at 28. China implemented reforms for starting a business by launching online company registration and by simplifying social security registration.

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In dealing with construction permits parameter China climbed 51 positions in DB 2019, now standing at 12. China has updated the procedures to:

  • Obtain building permit
  • Certificate of completion
  • Registering new buildings with the real estate registry

China has also introduced a stern qualification requirement for professionals in the construction industry to improve building quality control. For getting electricity parameter, China has gone up 84 position and stands at 14 in this parameter. China has expanded network capacity so that all connections of power loads of 160kW or less are now made directly to the low voltage network, for which the connection process is carried out entirely by the utility free of charge. The time to obtain an electricity connection was also reduced thanks to the rollout of a new mobile application for customers.

Registering a property in China has gone by 14 positions with China standing at 27th position in DB 2019 from 41 in DB 2018. China has updated the administrative procedures and has increased the reliability and transparency in its land administrative system.

In paying tax parameter, the country ranks at 114, up by 16 positions in DB 2019 from 130 in DB 2018. China has abolished business tax and has allowed for joint filing. In Beijing, China has reduced the housing fund rate paid by the employer.

For the parameter protecting minority investors, China has gone 55 notches up and stands at 64 in DB 2019. For the parameter getting credit, China stands at 73. In trading across the border, China has moved 32 positions up, now standing at 65 in DB 2019. China has reduced the time and cost to export import by implementing a single window, eliminating administrative charges, increasing transparency and encouraging competition.

Bangladesh made the least progress in South Asia
According to the World Bank’s EODB 2019 report, Bangladesh notched one position up to 176. The one position up indicates that the country has done some reforms to make business easier in the country, but it has to make more reforms.

The economy has seen improvement in getting electricity parameter. The country climbed six positions up, now standing at 179 in DB 2019 from 185 in DB 2018. The other parameter is paying taxes where the country has witnessed improvement. In this parameter, Bangladesh climbed one position to 151. Parameters like starting a business, dealing with construction permits, getting credit, protecting minority investors and trading across the border have witnessed a downward ranking, impacting overall ranking of the country.

In starting a business Bangladesh is down seven positions, standing at 138, and dealing with construction permits is down eight positions, now standing at 138. In getting credit parameter, the country was down by two positions standing at 161 in DB 2019 from 159 in DB 2018. The parameter protecting minority investors, Bangladesh is down by 13 positions standing at 89 and trading across the border is down by three positions standing at 176 in DB 2019.

The country still remains among the lowest cost apparel suppliers to the world. Improvement in the above parameters will further cement its competitiveness.

Turkey: Top improver for the first time in DB
Turkey climbed 13 positions up in the overall ranking of EODB 2019 report as the country has made some serious reforms in the start-ups, dealing with construction permits, getting credit, paying taxes and trading across the borders parameters. The country stands at 43 DB 2019 from 60 in DB 2018 report. World Bank’s EODB 2019 report has listed Turkey on the ninth position in the top 10 improvers in the current report and this is first time Turkey has been listed on this list.

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Starting a business in Turkey is made easier by removing the paid-in minimum capital requirement and has eliminated the notarization of company documents and legal books. In the parameter the country ranks 78. Dealing with construction permits parameter, the country has climbed up 10 positions, standing at 59 in DB 2019. Turkey has improved this parameter by publishing online all pre-application requirements needed to get a construction permit. In addition, it strengthened construction quality control by imposing stricter qualification requirements for professionals in charge of approving architectural plans.

In getting credit parameter, Turkey ranks 32nd and has improved in this parameter by extending the security interest to products, secured creditors are now given absolute priority over other claims, such as labour and tax, both outside and within bankruptcy proceedings. Turkey also improved access to credit information by reporting data on arrears from telecommunications companies.

Turkey has started online portal for filling and paying taxes, this improvement has brought Tukey to 80th position in paying taxes parameter.

Trading across the border, the country has reduced the time and cost to export and import through various initiatives including expanding the functionalities of the national trade single window, enhancing the risk management system and lowering customs brokers’ fees.

Indonesia goes one rank down in EODB 2019
Indonesia moved one rank down to 73 in DB 2019. The country is behind Greece and ahead of Mongolia. According to the report, Indonesia has made reforms in starting a business, registering property and getting credit.

In starting a business parameter, Indonesia ranked 134 in DB 2019. The country has made reforms here by combining different social security registrations and has reduced notarization fees. In registering a property parameter, Indonesia has reached in the top 100 list standing at 100 in DB 2019. The country has reduced the time to solve land disputes at the first instance court and improved the transparency of land registry. In getting credit parameter, the country ranked at 44 in DB 2019. Indonesia has improved the access to credit information by distributing data from retailers and utility companies.

Cambodia slips three notches in DB 2019
Cambodia slipped three ranks down standing at 138, in the latest Doing Business report of World Bank. Except in dealing with construction permits parameter, the country has made no positive reforms to improve the ease of doing business. This is three times in a row that Cambodia has slipped its overall ranking in EODB.

The report also states that the country ranking in starting a business parameter has remained unchanged, standing at 185. Cambodia has made reforms in dealing with construction permits parameter by reducing the fees to obtain building permits. The country in this parameter stands at 179.

Vietnam slips one rank down in DB 2019
Vietnam’s rank in ease of doing business in 2019 fell by one rank to 69. But the country has been ranked the highest among the ASEAN countries, Indonesia, India, Laos and Myanmar. Though the country has made reforms in paying taxes, the country’s ranking still fell by 45 positions to 131 as other countries have made more reforms in this parameter. Vietnam has removed the requirement of hard copy submission of the value added tax return and allows joint payment of the business license tax and value added tax. Vietnam has also reduced the employer’s contribution to the labour fund.

Starting a business has been made easier by publishing the notice of incorporation online and by reducing the cost of business registration. The country ranks at 104 in the current DB report.

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Ranking in protecting minority investors slipped eight positions now standing at 89, trading across borders dropped by six positions now standing at 100 and getting credit slipped by three positions now at 32 in DB 2019.

Sri Lanka up by 11 ranks
Sri Lanka has gone up by 11 positions in the latest ease of doing business report, now standing at 100. As per the report, the country is the third highest country in South Asia region after India at 77 and Bhutan at 81 in the overall ranking of EODB 2019.

The country has made dealing with construction permits easier by launching a single window, improving transparency of providing online access to building regulation and reducing the processing time to issue several building certificates. In this parameter the country stands at 65.

The county also made doing business easier by making reforms in registering property by implementing a single window to streamline the process of delivering several certificates and increased transparency by providing online access to cadastral information. In the parameter the country ranks 38. Sir Lanka ranks 37 in the parameter paying taxes, as it has introduced online systems for filing corporate income tax, value added tax and employee trust fund contributions.

Pakistan jumps 11 ranks in EDOB 2019
In the overall ranking of ease of doing business 2019 report, Pakistan jumped 11 positions, standing at 136 in DB 2019 from 147 in DB 2018. The government has set a determined aim to get the country in the top 100 economies in the next EODB report, and is taking steps to improve the ease of doing business and attract foreign investment in Pakistan.

The country ranked 130 in starting a business parameter in the current report. The government has introduced online registration system and replaced several forms for incorporation with a single application.

Pakistan (Lahore) made reforms in registering a property by streamlining and automating administrative procedures and increasing the transparency of its land administration system. In Karachi, registering property is made easier by increasing the transparency of the land registry. In the current report, Pakistan stands at 161 in registering a property parameter.

Myanmar dropped its ranking for third consecutive year
Myanmar ranked 171th in the Ease of Doing Business 2019 report, but remained unchanged from the last year ranking. As per the report, the country has failed to improve its overall ranking in the ease of doing business for the third consecutive year and remains the least conducive country in ASEAN to do business. The country shares its rank with Iraq in the current report.

Still Myanmar has made reforms in starting a business and getting electricity parameter. In starting a business the country ranks 152 in DB 2019 and has reduced registration fee to start a business. In getting electricity parameter the country has ranked 144 and has improved the monitoring and regulation of power outage by beginning to record data for annual systems average interrupted duration index (SAIDI) and have made it more transparent by publishing electricity tariffs online.

In the other parameters like getting credit, protecting minority investors, trading across borders, registering a property, etc., the country’s ranking has fallen.

(Source: The World Bank – Doing Business)

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