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Posted by on Dec 3, 2015 in International Institutions |

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)

Min Capital

155
2. Dealing with Construction Permits PTC,

Building Quality Control Index

183
3. Getting Electricity PTC,

Reliability of Supply,

Transparency of Tariffs

70
4. Registering Property PTC,

Quality of Land Admin

138
5. Getting Credit Strength of Legal Rights Index,

Depth of Credit Information

42
6. Protecting Minority Investors Extent of conflict of interest regulation index,

Extent of shareholder governance index

8
7. Paying Taxes Payments,

Time,

Total Tax Rate

157
8. Trading Across Borders Time and Cost to Export,

Time and Cost to Import

133
9. Enforcing Contracts Time,

Cost,

Quality of Judicial Process Index

178
10. Resolving Insolvency Recovery Rate

Strength of Insolvency Framework Index

136
Total 130

 

 

Criticism

  • 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.
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