Survey says doing business in India is tough

November 9, 2010

A big banner of of U.S. President Barack Obama is pictured on a building in Mumbai November 6, 2010. REUTERS/Fayaz Kabli

Even as India Inc celebrates U.S. President Barack Obama’s recognition of the country as a world super power, a recent study by the World Bank presents a contrasting view.

India ranks 134 among 183 nations in a survey called “Doing Business 2011″  — that gauges the ease of doing business in a country — and is ranked behind countries like arch rival Pakistan, Bangladesh and Sri Lanka.

Singapore leads the pack, while Hong Kong grabs the second position in the list.

The report investigates the regulations that enhance business activity and those that constrain it.

It takes into account areas like starting a business, dealing with construction permits, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, closing a business, getting electricity and employing workers.

Although India has carried out major economic reforms since liberalising its economy in the early 1990s, many of the reforms are still in the planning stages, and unless it quickens such reforms, doing business in India may remain troublesome.

Corporations have called for reforms such as allowing foreign direct investment into multi-brand retail, but little concrete action has been taken.

According to the study, 14 of the 17 Indian cities covered implemented changes to ease business start-up, construction permitts and property registration between 2006 and 2009.

But the report points out — “The level of change depends not only on the pace of business regulation, reform but also on the starting point.”

India ranks 165 in starting a business, and as low as 177 in dealing with construction permits, according to the report.

India surely has a long way to go, getting rid of red-tape and improving infrastructure before it can celebrate being a world power, especially if it wants to encourage new business leaders.

4 comments

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India needs judicial fast track infrastructure to defeat red tape, babu protection and politician nexus with bureaucrats. It is not by accident with us it is by design.

Democracy thrives in an effective vigilant society where a referee is needed to dispense quick and honest legal decision. We have all the requirements, sufficient funds and legal experts but this easy exercise will not be done, which is more important than the infrastructure we are attempting to built with 50 billion dollars.

Those 600 billion with dollar and half per day income will not come to court on limousine but by foot. They are the most exploited and they need to be heard urgently.

Without good legal system there is no democracy worth the name. We have politicians on one side and the violent Naxalite on the other, in between the general masses.

The rich like any where in a bad system get all rules drawn up for their benefit. The red tape is for the common man. Work on statistic and learn, how many fast clearances were done and who were the parties in whose favour they were made, you will get the reality.

A good honest legal system will place most top notch corrupt …. you know where, so corruption is by design not by accident, OR EDUCATE ME WHY IN SIXTY YEARS THIS TOP MOST REQUIREMENT HAS NOT BEEN ADDRESS.

Posted by gurdeep | Report as abusive

India needs judicial fast track infrastructure to defeat red tape, babu protection and politician nexus with bureaucrats. It is not by accident with us it is by design.

Democracy thrives in an effective vigilant society where a referee is needed to dispense quick and honest legal decision. We have all the requirements, sufficient funds and legal experts but this easy exercise will not be done, which is more important than the infrastructure we are attempting to built with 50 billion dollars.

Those 600 billion with dollar and half per day income will not come to court on limousine but by foot. They are the most exploited and they need to be heard urgently.

Without good legal system there is no democracy worth the name. We have politicians on one side and the violent Naxalite on the other, in between the general masses.

The rich like any where in a bad system get all rules drawn up for their benefit. The red tape is for the common man. Work on statistic and learn, how many fast clearances were done and who were the parties in whose favour they were made, you will get the reality.

A good honest legal system will place most top notch corrupt …. you know where, so corruption is by design not by accident, OR EDUCATE ME WHY IN SIXTY YEARS THIS TOP MOST REQUIREMENT HAS NOT BEEN ADDRESSED.

Posted by gurdeep | Report as abusive

All the aspects that are necessary for a company for successfully doing Business in India are not covered in the report. Factor missing include security, macroeconomic stability, corruption, labor skills, the underlying strength of institutions or the quality of infrastructure, regulations specific to foreign investment.

Having said that, India as a country in itself is in transition and so are the tax and investment laws. New guidelines, policies, programs, and incentives for investment are been introduced into the system frequently. The challenge in this emerging economy is to timely figure out what opportunity to tap, when, where, & how. There is a considerable risk involved for players who do not understand how local markets operate in India. Even though the opportunities exist in almost every sector and for every size of the investor/business, timely identifying it and finding the right partner in India to execute has its own opportunity cost.

Navin Pathak
Senior Partner
Entry India, LLC
http://www.entryindia.com

Posted by npathak1 | Report as abusive

I am a Indian and I am ashamed to call myself an Indian. I will tell u the reason . It is simple bcos almost the entire country has changed from being honest to dishonest. Almost the entire government,politicians are totally corrupt. But more danerous than this is the fact that ordinary Indians have turned themselves into cruel animals and are feeding of each other everyone has accepted corruption and bribery as a part and parcel of their lives,U look around u find corruption and bribery around u in this vast nation even private sector is also corrupt and people want to sleep tonight and wake up tomorrow morning extremely rich and people blink when u refuse to bribe the system and people think of you as crazy . time and again corrupt people are getting elected bcos the general electorate is corrupt and only a corrupt electorate can elect a corrupt representative. Almost all politicians are facing criminal or corruption cases and are bribing and getting out of them .In the current scenario I have no hope for india .
I feel that India is bound to crash and fail and it will crash not bcos of a outside country invading it.All investments into India will dry up when outsiders realize what a corrupt country India is. It will happen because of her own citizens greed for money and wealth and finally the India story will end in a very bad way , way with riots and revolutions occuring across the sub continent .People will realize that the current system can no longer deliver a proper standard of life . It will be on the lines of the French Revolution .
This scenario is not doubtful but a certainity . but the question is not if it will but the question is when. but when it happens it will really be huge and will bring about a change for good.

Posted by dreamguru | Report as abusive