© 2024 IJNRD | Volume 9, Issue 6 June 2024| ISSN: 2456-4184 | IJNRD.

ORG

Ease Of Doing Business In India

Name of the Author: Hansika Reddy Araveti
Department: XI Class,
Institution: Indus International School,
City: Hyderabad
State: Telengana
Country: India

ABSTRACT
The ‘Make in India’ is an initiative by the government of India to create and encourage companies to
develop, manufacture and assemble products in India. Ease of Doing Business (EoDB) is recognised as a
significant factor in promoting entrepreneurship. India’s position in the World Bank’s Ease of Doing
Business Index (EoDBI) improved from 142 in 2014 to 63 in the year 2020 due to the implementation of
ambitious regulatory reforms by the government. Among the ten parameters of the World Bank’s EoDBI,
India’s performance is poor in ‘Enforcing Contracts’, Starting of Business and Registering Property. As per
the new categorisation, in EoDB, there are seven states under the top achievers category, six under the
‘Achievers category’ seven states in the aspirers’ category, while the remaining states are under Emerging
Business Ecosystems. World Bank Report on EoDBI is criticised that it ignored the social benefits of
regulations. Hence, India has to put focus not only on regulatory reforms to ease the process of conducting
business but also on social implications, public services and transparency. World Bank’s new flagship ‘report
‘B-READY’ assesses the efficiency with which regulatory framework and public services are combined in
practice. Dealing with the challenges of doing business in India requires a combination of strategic planning,
patience and cultural sensitivity. The present paper gives a descriptive analysis and reviews the status of
EoDB in India as well as the State of Andhra Pradesh.

Keywords: Investment, Ease of doing business, Transparency, business environment.

1. INTRODUCTION
The task of modernizing and building a competitive economic environment is a long and arduous task
in the globalized world of today. As economies of all countries are increasingly getting interlinked and
interdependent, they are facing the twin challenges of competition and widening disparities. Since years,
policymakers have been debating how to give an impetus to manufacturing in India and make India a global
manufacturing hub.

A favorable business environment is a prerequisite for the economic growth of the economy. India,
being one of the fastest developing countries in the World, has the potential to surpass the leading countries
in terms of business. The ‘Make in India’ is an initiative by the government of India to create and encourage

IJNRD2406301 International Journal Of Novel Research And Development (www.ijnrd.org) c134

c134
 © 2024 IJNRD | Volume 9, Issue 6 June 2024| ISSN: 2456-4184 | IJNRD.ORG

companies to develop, manufacture and assemble products in India and incentivize investments in
manufacturing. The policy approach was to create a conducive environment for investment, develop modern
and efficient infrastructure and open up new sectors for foreign capital. The initiative targeted 25 economic
sectors for job creation and skill enhancement and aimed ‘to transform India into a global design and
manufacturing hub’. ‘Make in India’ has three stated objectives V12 (1) to increase the manufacturing
sector’s growth to 12-14% per annum (2) to create 100 million additional manufacturing jobs in the economy
by 2025 and (3) to raise the contribution of manufacturing sector by 25% of the GDP by the year 2025. The
‘Make in India’ initiative aims to make India an integral part of the global chain India has vigorously opened
up its economy. Defense, railways, construction, insurance, medical devices sectors etc. have all been rapidly
opened up for Foreign Direct Investment (FDI).
‘Make in India’, recognizes Ease of Doing Business (EoDB) as the single most important factor to
promote entrepreneurship. In order to achieve this, the Government of India has taken up a series of measures
to radically improve EoDB. Its objective is to make the regulatory environment easy and simple for businesses
to flourish. At an international level, the World Bank every year assesses the policies to ease the regulatory
burden undertaken by countries across the world through its Ease of Doing Business Index (EoDBI). The
index uses ten different indicators that measure various aspects of business regulations which are important
to domestic firms and for national competitiveness. Doing business also measures features of labour market
regulations which are reported as a separate section and not included in EoDBI. EoDBI is considered as a
reliable source of information on the business environment of different countries.
2. PARAMETERS FOR EASE OF DOING BUSINESS

The parameters on which the World Bank ranks countries are (1) Starting a business (2) Dealing with
construction permits (3) Getting electricity (4) Registering property (5) Getting credit (6) Protecting
minority investors (7) Paying taxes (8) Trading across borders (9) Enforcing contracts and (10) resolving
insolvency.

1. Starting a Business: This parameter measurers the minimum paid-up capital requirements, number
of procedures involved and cost for a small to medium size limited liability Company to startup and
formally operate in the economy.
2. Getting Credit: This indicator is basically concerned with measuring the legal rights of borrowers
and lenders concerned with secured transactions and the reporting of credit information.
3. Dealing with Construction permits: This indicator is concerned with recording procedures which are
required for a business in the construction industry in order to build a warehouse along with the time
and cost to complete each procedure. It is also concerned with studying quality control indices,
evaluating the quality of building evaluation, insurance regime, safety mechanism and certified
professional requirements.
4. Trading Across Borders: This indicator is concerned with recording time and cost associated with
the process of exporting and importing goods and other things such as documentary compliance,
border compliance and domestic transport.
5. Protecting Minority investors: This indicator is concerned with measuring the protection of minority
interests from conflict of interest and shareholders’ rights in corporate governance.
IJNRD2406301 International Journal Of Novel Research And Development (www.ijnrd.org) c135
c135
 © 2024 IJNRD | Volume 9, Issue 6 June 2024| ISSN: 2456-4184 | IJNRD.ORG

6. Getting Electricity: This indicator is concerned with recording all the procedures required by the
business in acquiring permanent electricity connection and supply for a standardized warehouse.
7. Enforcing contracts: This indicator measures the time and cost involved in resolving a commercial
dispute through a local first-instance court, the quality of judicial processes index and evaluates
whether each economy has adopted practices that promote good quality and efficiency in the court
system.
8. Paying taxes: The indicator records the taxes and mandatory contributions which has to be made by
firms in a given year. It is also concerned with the firm’s administrative burden of payment of taxes,
and contributions and complying with post-filing procedures.
9. Resolving Insolvency: It is basically concerned with the time, cost and recovery rate under the
bankruptcy proceeding. It also takes into consideration the outcome of insolvency proceedings
which involve domestic entities and the strength of the legal frame work which is applicable to
judicial liquidation and reorganization proceedings.
10. Registering property: The indicator measures the procedures, time and cost which is needed to
register the commercial real estate.

3. EASE OF DOING BUSINESS AND INDIA

Rankings and weights on each of the mentioned parameters are used to develop an overall EoDB
ranking. A high EoDB ranking means the regulatory environment is more conducive for starting and
operating businesses. EoDB rankings impact the reputation of the countries and hence influence them to
initiate important policy reforms to improve the regulatory environment in their economies. India was ranked
142 in Doing Business in 2014 among the chosen 190 countries. The government of India launched an
ambitious programme of regulatory reforms aimed at making it easier to do business in India. To enhance
EoDB in the country, systematic and targeted efforts are being made to reduce the number of processes,
reduce average time taken, rationalise costs and make it easier to do business in India. Further to enhance
EoDB more than 39,000 compliances have been reduced and more than 3,400 legal provisions have been
decriminalised. The government has introduced the Janviswas Bill to amend 42 Central Acts. Further, the
government launched the ‘National Single Window System’ and introduced various reforms in GST,
insolvency and bankruptcy, labour laws and foreign investments. The initiatives significantly contributed to
improving the business climate. India is now one of the most alluring locations for investments and
conducting business. India moved up 79 spots in the World Bank’s 2020 EoDBI ranking from 142 in 2014
to 63 in 2020 report of World Bank’s report.
The country’s rankings on various parameters given by the World Bank’s Ease of Doing Business
Index are given in Table 1.

IJNRD2406301 International Journal Of Novel Research And Development (www.ijnrd.org) c136

c136
 © 2024 IJNRD | Volume 9, Issue 6 June 2024| ISSN: 2456-4184 | IJNRD.ORG

Table 1: India’s ranking on various Parameters of World Bank’s

Ease of Doing Business Index
S.N
Parameters 2014 2015 2016 2017 2018 2019
o
1 Ease of starting a Business 158 155 155 156 137 136
2 Dealing with construction 184 183 185 181 52 27
permits
3 Getting electricity 137 70 26 29 24 22
4 Registering Yan property 121 138 138 154 166 154
5 Getting credit of 36 42 44 29 22 25
yourbusiness
6 Protecting 7 8 13 4 7 13
Minorityinvestors
7 Paying Taxes 156 157 172 119 121 115
8 Trading a cross borders 126 133 143 146 80 68
9 Enforcing contracts 186 178 172 164 163 163
10 Resolving insolvency 137 136 136 103 108 52
11 overall Rank 142 130 130 100 77 63

Source: Ease of Doing Business in India, World Bank Group, 2023.

It can be seen form the table that India’s Rank in the World Bank’s EoDBI continuously improved
from 142 in 2014 to 130 in 2015 and 2016, further improved to 63 in 2019 out of 190 countries. A
comparative analysis of improvement across the selected parameters reveals that India’s position on
‘Construction Permits’ has improved from 184 in 2014 to 27 in 2019. This improvement has been mainly
due to a decrease in the number of procedures and time taken to obtain construction permits. India’s ranking
on the parameter ‘Getting Electricity’ has improved from 137 in 2014 to 22 in 2019. It just takes 53 days
and 4 procedures for a business to get an electricity connection. Apart from these significant improvements
among the 190 economies, India ranks 13th in protecting minority investors and 25th in getting credit. But the
‘The Starting of a Business’ indicator is still ranked 136 in India among the Chosen 190 countries, which
indicates that steps taken to ease out the process are not sufficient. The number of procedures required to set
up a business is still cumbersome which takes more time in comparison with OECD countries. The
‘Registering Property’ indicator has shown a major dip (33 ranks) from 121 in 2014 to 154 in 2019 which
clearly indicates that it requires a lot of effort to move the indicator up the ladder. Enforcing contracts is one
indicator in which India ranks as one of the poor performers, in 2019 with 163 rank out of 190 countries.
5. EASE OF DOING BUSINESS IN THE STATE OF ANDHRA PRADESH

Keeping in mind the vision to make India an easy place to do business, the Department for Promotion
of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry, Government of India

IJNRD2406301 International Journal Of Novel Research And Development (www.ijnrd.org) c137

c137
 © 2024 IJNRD | Volume 9, Issue 6 June 2024| ISSN: 2456-4184 | IJNRD.ORG

in association with the World Bank initiated a dynamic national-level exercise in 2014 to rank all the Indian
States and Union Territories on the basis of the reforms undertaken by them on selected parameters. In 2014,
under the ‘Make in India’ initiative the representatives of the state government identified and shared 98
points. Business Reform Action Plan (BRAP) to be implemented by them to improve the regulatory
framework for business as part of easing the doing of business in the country. The BRAP also sought to lay
out the first of a series of recommendations targeted at increasing transparency and improving the efficiency
and effectiveness of various government regulatory functions and services for business with a view to
creating an investor-friendly business climate by cutting down red tape. In 2016 DPIIT released a 340-point
BRAP. It included recommendations on 58 regulatory processes and policies spread across ten reform areas
spanning in life cycle of a typical business. BRAP 2017-18 was updated to 372 action points. It included new
sectors such as health care and Hospitality central inspection system, trade license, Registration under legal
metrology and registration of partnership firms and societies. BRAP 2018-19 proposed to undertake a 100%
feedback-based assessment. DPIIT has launched the BRAP for the year 2020 which includes 301 reform
points covering 15 business regulatory areas such as access to information, single window system, labour,
environment, land administration & transfer of land and property, utility permits and others. 118 new reforms
were included to further augment the reform process. Sectoral reforms with 72 action points spread across 9
sectors namely trade licences, healthcare, legal metrology, cinema halls, hospitality, fire NOC, telecom,
movie shooting and tourism were introduced for the first time to expand the scope of the reform agenda.
The broader aim is to boost investor confidence, foster a business-friendly climate and augment the
ease of doing business across the country by introducing an element of healthy competition through a system
of assessing States/Union Territories based on their performance in the implementation of the Business
Reforms Action Plan. Accordingly, DPIIT has been ranking States/UTs since 2014. Andhra Pradesh was
ranked number 2 among all the states in 2015 in EoDB, later achieved 1st rank in 2016 and continued in later
period as well. While the State proactively implemented all the reforms, the efficiency of the implemented
reforms on the ground is evident from the high investor feedback score received by Andhra Pradesh in the
2017 edition of the BRAP evaluation by DPAP.

Table 2: Andhra Pradesh Ranking in Ease of Doing Business

Year Number of reforms Andhra Pradesh Rank Compliance

2017 405 1 98.30%

(Reform implementation 99.73)
(Investor feedback - 86.50%)
2016 340 1 98.78%
2015 285 2 70.12%
Source: Business Reform Action Plan BRAP, Department for Promotion of Industry
and Internal Trade, N. Delhi.

IJNRD2406301 International Journal Of Novel Research And Development (www.ijnrd.org) c138

c138
 © 2024 IJNRD | Volume 9, Issue 6 June 2024| ISSN: 2456-4184 | IJNRD.ORG

6. PROMOTION OF EASE OF DOING BUSINESS IN ANDHRA PRADESH

The State has always followed the motto of ‘People First, Industry First’, in which the government
through the real-time governance cell, reaches out to investors from time to time to obtain their feedback,
identifies underlying concerns and forwards it to the respective department for redressal.
As part of ease of doing business, the reforms taken by the Government of Andhra Pradesh, following
are the key highlights.
The single desk portal has been integrated with the online application of APIIC, factories, fires etc.
This will enable information sharing and minimize the duplicity of information shared by investors.
Reforms in industry services related to registration under legal metrology.
Cut in documentation requirement for availing various services.
To ensure faster approvals and easier access, more than 45 industry services are to be processed
without any physical touchpoints.
AP Public Service Delivery Guarantee Act, 2017 was enacted with clear commitment on timelines
for the delivery of over 60 services to businesses.
A large number of reforms were implemented in the area of compliance inspections by Labour,
Factories, Boiler and pollution control departments.
The requirement of inspection for the allocation of raw materials such as coal, and ethanol has been
discontinued and is to be allocated on-the-spot based on self-certification.
In 2020, in a departure from the previous years where the states / UTs were ranked, they have been
placed under four categories viz. Top Achievers, Achievers, Aspirers and Emerging Business Eco System. It
is felt that the objective of assessing the States / UTs is not to create a hierarchy among states / UTs but rather
to create an enabling framework where learnings can be shared among states/UTs which in turn lead to a
nationwide spillover of good practices. As per the secretary of DPIIT, under the new categorization method
difference between various States and UTs was so little that it would not make sense to rank them rather than
to put them in various categories. According to BRAP in 2020, Andhra Pradesh, Gujarat, Telangana, Haryana,
Karnataka, Punjab and Tamil Nadu are categorized as top achievers. Further, Himachal Pradesh, Madhya
Pradesh, Maharashtra, Odisha, Uttarakhand and Uttar Pradesh have been categorized as ‘Achievers’. The
Aspirers category includes Assam, Kerala, Goa, Chattisgarh, Jharkhand, Rajasthan and West Bengal. In the
category of ‘Emerging Business Ecosystem’ there are 11 states and UTs including Delhi, Puducherry, Tripura,
Andaman and Nicobar, Bihar, Chandigarh, Daman and Diu.

7. WORLD BANK’S EASE OF DOING BUSINESS INDEX (EODBI): CRITICISM

As the World Bank report on EOBDI gained prominence, criticisms also emerged. It is argued that
the report ignored the social benefits of regulation and encouraged countries to engage in a regulatory race
to the bottom. Though the World Bank reformed doing business reports over the years to address some of the
concerns, some concerns remained. The proponents credited the Doing Business report with driving
pro/growth reforms in developing countries, but sceptics criticised it for penalising countries for adopting
labour and safety protections.
IJNRD2406301 International Journal Of Novel Research And Development (www.ijnrd.org) c139
c139
 © 2024 IJNRD | Volume 9, Issue 6 June 2024| ISSN: 2456-4184 | IJNRD.ORG

After data irregularities on Doing Business 2018 and 2020 were reported internally in 2020, World
Bank Management after reviewing all the information available, in September 2021 the World Bank
announced that it was discontinuing its annual Doing Business Report. In February 2022, the World Bank
published a pre-concept note about a new approach for assessing business and investment climate across
countries tentatively called as the Business Enabling Environment (BEE). The objective is to quantitatively
assess the business environment for private sector development focusing on innovation and entrepreneurship,
equality of opportunities and general sustainability of the economy. The concept note stresses that the BEE
is an attempt to strike a better balance as a business environment assessment incorporating, the provision of
public services key for functioning markets. The BEE is renamed as ‘Business Ready’ project (B-READY).
B-READY Report is the successor to the Ease of Doing Business Index (EoDBI). The report assesses the
regulatory framework and public services directed at firms and the efficiency with which regulatory
framework and public services are combined in practice. The ‘Business Report’ approach aims to establish a
better balance between the ease of conducting a business and the broader implications for society as a whole.
Transparency will be a key feature of Business Ready’s safeguards for data integrity. The b-Ready report is
set to encompass 54 economies and is scheduled for publication in 2024.

REFERENCES

1. A guide to Doing Business in India. http://msmglobal.com

2. Anjali Singh and K.K.Jaiswal, Ease of Doing Business in India – A Vision of Make in India,.
Economic Affairs, Vol. 63, No. 1, pp. 129-135, March 2018, ISSN: 0424-2513. New Delhi Publishers
www.ndpublishers.in.
3. Business Enabling Environment (BEE), World Bank. http://thedocs.worldbank.org
4. Business Ready (B-READY), World Bank, http://www.worldbank.org
5. Challenges in ease of doing business. www.iasparliament.com.
6. Doing business in India. EEPC India. www.eepcindia.org.
7. Doing Business, http://archive.doingbusienss.org/en/doingbusiness
8. DPIIT, http://dpiit.gov.in/publications/annual-report.
9. Ease of Doing Business – AP Industries, www.apindustries.gov.in
10. Ease of Doing Business and its significance in Indian Economy, Neha Shroff and Sudesh Zingde.
www.researchgate.net/publication/356065783
11. Ease of Doing Business in India, Indian Embassy of India, Hague,
http://indianembassynetherland.gov.in
12. Ease of Doing Business Reforms 2014-18, DPIIT website,
https://dipp.gov.in/sites/default/files/DB19_Ppt_V13.3.pdf.
13. Ease of Doing Business, An Enterprise Survey of Indian States, 2017, NITI Aayog IDFC Institute.
14. Ease of Doing Business, Lok Sabha Secretariat intranet, http://loksabhadocs.nic.in.
15. Ease of Doing business, Member Reference Service LARRDIS, Lok Sabha Secretariat, New Delhi,
No30/RN/Ref/August2020.
16. Geetha, R, 2016, Make in India and Ease of Doing Business, International Journal of Science and
Research, vol.5(1). pp.1649-1651.
17. India Jumps 30 places in World Bank’s Ease of Doing Business, India Times, October 31, 2017.
http://timesofindia.com/busienss.
18. India Reduced 39000 + Compliances for Ease of Doing Business, Economic Survey 2022-23.
http://inc42.com.
19. Make in India – Wikipedia.org.
20. Press Information Bureau. www.pib.gov.in
21. Rankings-Doing Business, http://arcivedoingbusinesss.org

IJNRD2406301 International Journal Of Novel Research And Development (www.ijnrd.org) c140

c140
 © 2024 IJNRD | Volume 9, Issue 6 June 2024| ISSN: 2456-4184 | IJNRD.ORG

22. Rebecca, M.Nelson & Martin, A.Wells, Congressional Service, informing the legislative debate.
‘INFLOW’.
23. The ‘Ease of Doing Business’ in India, and its significance in India Economy, The Diplomat.
http://thediplomat.com.2017/11.
24. Times of India, Andhra Pradesh takes top slot in Ease of Doing Business rankings, 1 st July, 2022.
http://timesofindia.indiatimes.com

-----
Acknowledgements: With Special Thanks to Smt. S. Ratnakumari, Former Professor of Economics, S.V.
University, Tirupati, Former Vice Chancellor of Mahila University and at present working as Chairperson of
the Finance Commission, Govt. of Andhra Pradesh, Amaravathi.

------

IJNRD2406301 International Journal Of Novel Research And Development (www.ijnrd.org) c141

c141