How electricity helped India gain on Ease of Doing Business Ranking

Jeannie Matthews
November 2, 2018

THE PHILIPPINES managed to improve its score in the World Bank's annual report that tracks economies' competitiveness in ease of doing business, but its rank slipped as reforms to streamline transactions and strengthen stakeholder rights were offset by increased layers for import inspection and higher tax registration costs.

The latest jump comes in an election year, as the government is under opposition attack for the rise in petrol prices, the fall of the rupee and the differences with the Reserve Bank of India. "India is now ranked first among South Asian countries compared to 6th rank in 2014", he added.

The report, introduced in 2003, measures the ease of doing business in 190 economies using 11 indicators on business regulation, such as how easy it is to start a business, deal with construction permits, trade across borders, protect minority investors, enforce contracts and secure credit.

The Index ranks 190 countries based on 10 indicators across the life-cycle of a business, from "starting a business" to "resolving insolvency".

Last year, India had broken into the top 100.

World Bank put India among the top 10 economies to make the most improvements, saying it focused on streamlining business processes.

"Turkey carried out a record number of business reforms in the past year, earning the country a spot in this year's top 10 global improvers", the bank said in a statement.

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"The diversity among the top improvers shows that economies of all sizes and income levels, and even those in conflict can advance the business climate for domestic small- and medium-enterprises", said Shanta Devarajan, the World Bank's senior director for development economics, and acting chief economist.

India, it said, made starting a business easier by integrating multiple application forms into a general incorporation form. In "Trading across Borders", India's rank improved by 66 positions moving from 146 in 2017 to 80 in 2018. The United Arab Emirates made getting electricity easier by eliminating all costs for commercial and industrial connections of up to 150 kVA.

Commerce and Industry Minister Suresh Prabhu said the improvement in rank was due to a combination of several factors, including administrative changes and legislative reforms like GST and the Insolvency and Bankruptcy Code (IBC). For measuring electricity reforms, it considered power supply data on Tata Power Delhi Distribution (TPDDL) in Delhi and Reliance Utilities and Power in Mumbai.

She emphasised that assistance from the World Bank was critical to the reform process, and also highlighted that improvement was a result of a combined effort under the Prime Minister's Steering Committee on Doing Business Reforms.

According to the World Bank, Zimbabwe made dealing with construction permits faster by adopting a one-stop shop for building plan approvals.

In the getting credit area, Kenya advanced to a global rank of eight this year, from 29 the previous year.

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