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INDIA IMPROVES EASE OF DOING BUSINESS: REAL PROGRESS OR CHIMERA?

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According to the recent data provided by the World Bank on Ease of doing business, India has jumped 14 spots upwards from 77th to 63rd. But, as per the latest information released by the World Bank, the reports have been stopped from being published in the month of October due to several irregularities which have been detected in the reports. 

On the other hand, India has been assuring that they can review the reports, along with being sceptical as it had targeted the 50th position for the ease of doing business.

But the question here arises: has India actually progressed or it has just benefitted from the method of compilation of the reports in the same way Chile has degraded from the Ease of Doing Business Ranking

Real Progress or Chimera? 

The real question which everyone needs to ponder upon is whether the progress of improvement in ranks is real or just illusory.

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The following points will actually help us address the above question and maybe give us a different viewpoint for the same. 

Tax implications

Taxes

We know that the taxation system in our country is a bit rigid and sometimes it follows a traditional methodology.

The economic goal of any business may hinder because of the tax regime any country follows. The President of BMW group recently said that the tax laws are very discriminatory when it comes to luxurious products.

Referring to this we can say it becomes very difficult for any company to pursue business in India. 

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Digitalization

digital tranformation

We all have been hearing one word consistently which is DIGITAL INDIA, but in a country where a majority of the people are even deprived of the basic needs of life, how can one focus on the business ease in a country where people are not aware of how digitization works.

Even when it comes to business, nobody prefers the RTGS mode or the Net Banking, they are self-sufficient with the standard methods of cash only.

How can we expect to actually be jumping the list when the businesses in our country itself are resistant to change?

There are just new methods and ways to promote the ease of doing business in India.

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Global approach

global approach

It is really a huge thing for our country when our own Prime Minister Shri Narendra Modi has been always keen on developing and maintaining relations with every country across the world.

Signing various MOU’s, joint commission and several agreements to promote economic objectives of any country and facilitate trade relations or business relations among the several countries, the foreign companies wanting to expand their business in India are ever-increasing.

But, when it actually comes to the ease of doing business the complex structure of the system, the endless procedures to follow holds back the business at some point of time. 

Initiatives

20201217 175531 0000 compress47 | GENUINE MATTERS

Looking on the brighter sides, we have also made a lot of changes in the existing system which will actually help other businesses to come up in India and along with the people of India starting up their businesses in their own country. 

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A few of them are listed down in a checklist as follows, though they might be a reason directly for the up-gradation of the ranking or it may be a reason why it seems to be a chimaera. Let us just go through all of these in a gist-

  • Labour reforms which are both employee and employer-friendly.
  • 24 Hour RTGS
  • Tax cuts
  • Various measures of ease of doing business are focused upon.
  • FDI and FII reforms 
  • Human Capital in focus.
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We can benefit from the above only when the reforms and the policy changes actually occur within the system and more emphasis is given upon the same. So, implementation is the key.

The Illusory effect

illusion

We have been sceptical as to why the ease of doing business ranking is more of illusory in nature and not seem like real progress to a large group of people.

The reason lies in the flaws and the shortcomings of the parameters and the attributes relating to the ease of doing business. 

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Those pointers will help us actually realise that may be India is still lagging behind due to the below possible reasons-

  • Enforcement of contracts(163rd
  • Registering properties (154th)
  • Costs involved in registering the properties are really high.
  • 1445 days on an average to resolve a commercial dispute in the court of law.
  • Insolvency procedures and reforms. 
  • SMEs facing a huge crisis. 
  • Re-Focus on the telecom sector to make India a digital economy.
  • More focus and simplified laws on land acquisition. 
  • The delays in the custom clearances.
  • Decriminalising the small offences to enhance better ease of doing business. 

All these are the major areas upon which any business relies and if these areas are simplified then it is possible that India may be at a position where it desires to be when it comes to ease of doing business ranking. 

So, looking upon these areas we can say that India should focus more upon in order to actually prove its real progress.

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Parameters of Ease of Doing business

Parameters of Ease of Doing business

The major question which arises during this topic is how the calculation for ease of doing business is actually done.

If the areas are apt enough and clear to understand one can actually rely upon the rankings of ease of doing business by roughly looking around as to what actually is going upon the world.

They basically are land administration, labour regulation, obtaining electricity and water supply permits, environment regulation, etc. So, we can say that the regulatory best practices actually win upon in the long run.

The calculations are also made upon these parameters and many other parameters are ignored at times.

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So, it may be possible that any economy may focus only upon those broad parameters and implement several reforms instead of actually focusing upon the overall business environment for both internal and external business environments. 

The sample, the population, the targeted parameters and everything else may change from time to time and the reliability and the accuracy of the data can be shifted. 

Also, the ease of doing business focuses on how much new investments have been made in a particular state or a country, so it may be possible that it may do now but later on they may shift to somewhere else and discontinue it forever.

All these are not taken into consideration. 

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Conclusion

INDIA IMPROVES EASE OF DOING BUSINESS: REAL PROGRESS OR CHIMERA?

To conclude upon we can say that, any situation, ranking or data can be analyzed on basis of various points.

The real catch lies upon the actual scenario whether India is actually considered as an option where it’s easy to do a business.

Necessary reforms may improve India’s ranking at the ease of doing business in the near future instead of just focusing upon the statistical data which can be easily manipulated by changing one or more variables.

That is why the article is more focused on facts rather than figures. 

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