Economy

IAS Parliament 5 years

KEY POINTS

· India has moved up 53 ranks in two years (from 2016 to 2018) in the World Bank’s Ease of Doing Business Index, its ranking now at 77.

· More remarkably, it stands out among the top five reformers among 190 countries.

· Its score up by 6.63 points to 67.23; the four countries whose score has jumped more are Afghanistan, Djibouti, China and Azerbaijan.

· This implies that an improvement in rank is based on India’s absolute performance, and not on the under-performance of other countries.

· Ease of doing Business Index which maps reforms across 10 parameters, of which India has done well in six — starting a business, dealing with construction permits, getting electricity, getting credit, lowering taxes and trading across borders.

Grey areas

· There has been a setback in time taken to register property and pay taxes.

· Also, the survey which is restricted only to Mumbai and Delhi raises serious concerns about the credibility of the index.

· Meanwhile, the index does not take qualitative factors into consideration.

· The notion of a supportive business environment cannot be seen in isolation of a country’s health and education indices, its political climate and the robustness of key institutions.

· The index has evoked criticism in the past, notably by this year’s Nobel prize winner Paul Romer who suggested that its methodology was biased.

Road to future

· An index that takes social and physical infrastructure as well as grievance redressal systems for all stakeholders into account would be more insightful.