“Ease Of Doing Business” is a term which is being currently tomtomed all across the Media with our Finance Minister Arun Jaitley going ahead and taking a high profile press conference along with his Ministry team showing a Power Point Presentation.
There has been a lot of cheering and chest thumping about how India is on its way to become a Super power now that the World Bank itself has recognised that India has jumped almost 30 step to rank 100th out of 190 countries in the Ease Of Doing Business Rankings.
But, I wonder how many people actually understand what “Ease of Doing Business” is all about?
Ease of Doing Business is an index created by the World Bank in association with the Doing Business Organization.
The DB conducts a survey in which it gather data based on the inputs of the appointed respondents of various countries and the Nation’s ranking is based on 10 parameters. These respondents are APPOINTED BY THE GOVERNMENT of that Country.
The 10 parameters are as under, Starting a Business, Construction Permits (For standardized warehouse), Getting Electricity, Registering Property (for your business), Getting Credit (loans from banks), Protecting Minority Investors (Minority Shareholders, nothing to do with religious minorities), Paying Taxes (Corporate Taxes), Trading Across Borders (Import Export), Enforcing Contracts (Court procedures), Resolving Insolvency (Bankruptcy procedures).
As far as India is concerned, the ranking is based on the data of only two cities….. Mumbai and Delhi.
To put it simply, the DB Team analyses how it easy it is to Register a Company, to get the Work Permits for Construction of the premises, to get electricity and other peripherals, to get credit from the banks, to pay taxes to the Government and to resolve insolvency while protecting the rights of the investors.
So basically, the easier it is to start up a business and close it down, while the rights of the investors is protected, the better rank you get.
A quick look at the overall rankings of the 190 countries analysed by the World Bank, we find India at rank 100.
If we look at the ranks 90 to 100 we find these Countries as under:
91: St. Lucia
92: Saudi Arabia
93: San Marino
99: Dominican Republic
From what it appears, India is definitely in the elite company there.
The DB Team also makes it abundantly clear that the “Ease Of Doing Business rank” is not indicative of the general conditions like Quality of Infrastructure, Inflation, Crime and Corruption.
So what does the “Ease of Business Ranking” of India mean to a common citizen like you or me.
Well, if you are an Investor or a Wannabe Entrepreneur and want to start a private limited company, get quick credit from the banks to fund your business, run your business, pay taxes to the Government and then close your company without any problems to you as an investor……India is 100th Best Country to do it in
The 30 step jump in the rankings of India denotes that now you can quickly start a company and call it, lets say, Mandir Enterprises Pvt. Ltd, get a quick loan of Rs. 15 Crores from the banks (without securities if you are one of the “Tu Jaanta hain kya mera baap kaun hain” types), declare a loss after a 16000% increase in your turnover and then close the company in a few years…… And your investor rights will be protected … bole to, nothing will happen to you. 😛
So, all you budding Entrepreneurs…. what are you waiting for?? Quit your jobs and chest thump your way to the nearest ROC office and work for making #StartUpIndia dream, a reality.
Because India is the 100th Best Country to start a business in…..Or you can do it in Panama which is the 79th Best Country to do so in, or Bhutan which is 75th Best, or Rwanda which is the 41st Best, or Kazakhstan which is the 36th Best 😉
Disclaimer: This post does not undermine the achievement of India in the WB Ease of Doing Business Rankings. Congratulations to Modi and Jaitley for making India Great Again, where “Chatur Baniyas” will thrive once more !!! Har Har Modi, Ghar Ghar Modi. BMKJ, GMKJ, JSR, GHMHHKNAH !!