Ease Of Doing Business Index: Parameters
Ease of doing business index is published by World Bank every year. Economies are ranked on basis of their ease of doing business and ranking varies from 1 to 189. Higher ranking in ease of doing business means economy is more conductive to start and operating a firm in that economy than lower ranking one. The ranking methodology is based on distance to frontier score on 10 topics and each topic contains various indicators. The index was based on survey important business cities of the country like 17 cities in India.
Distance to Frontier
The distance to frontier score captures the gap between an economy’s performance and a measure of best practice across the entire sample of 36 indicators for 10 Doing Business topics. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier.
Let’s see parameters of Ease of Doing Business Index and India’s rank in 2016:
|S No||TOPICS||INDICATOR||INDIA’S RANK 2016|
|1.||Starting a Business||Procedure, Time and Cost (PTC)
|2.||Dealing with Construction Permits||PTC,
Building Quality Control Index
Reliability of Supply,
Transparency of Tariffs
Quality of Land Admin
|5.||Getting Credit||Strength of Legal Rights Index,
Depth of Credit Information
|6.||Protecting Minority Investors||Extent of conflict of interest regulation index,
Extent of shareholder governance index
Total Tax Rate
|8.||Trading Across Borders||Time and Cost to Export,
Time and Cost to Import
Quality of Judicial Process Index
|10.||Resolving Insolvency||Recovery Rate
Strength of Insolvency Framework Index
- Methodology: Ease of Doing Business Index criteria for calculating time is based on very trivial assumptions like min time required for each procedure is 1 day which is not feasible in any case.
- Ease of doing business index criticized by Trade Unions or International Trade Union Confederation for favouring easy labour regulations under the index.