2. The Doing Business Report (DB) is a study elaborated by the World Bank
Group since 2003 every year that is aimed to measure the costs to firms of
business regulations in 183 countries in 2012. The study has become one of the
flagship knowledge products of the World Bank Group in the field of private
sector development, and is claimed to have motivated the design of several
regulatory reforms in developing countries. The study presents every year a
detailed analysis of costs, requirements and procedures a specific type
of private firm is subject in all countries, and then, creates rankings for every
country. The study is also backed up by broad communication efforts, and by
creating rankings, the study spotlights countries and leaders that are promoting
reforms
India’s rank dropped positions from 131 last
year to 134 this year
Chad is the worst place to do
business, switching positions with Central
African Republic, which ranked second-to-
last, according to the World Bank
7. A study was conducted by Global Initiative for Restructuring
Environment and Management (GIREM) and a not-for-profit
industry body, DTZ, a global leader in property services.
It rates the cities based on factors such as human
capital, energy, water, transport, housing, healthcare, climate,
office space availability and city culture, among others. These
constitute the basic eco-socio-economic factors critical in
determining the growth of the city.
As per the report Bangalore has been given highest ranking of
1, followed by Chennai and Mumbai respectively. Chennai has
outscored Mumbai, the financial capital of India, as the city is a
major industrial, cultural, commercial, economic and
educational hub in South India.
10. Doing Business measures the ease of starting a business
by recording all procedures officially required by an
entrepreneur to start up. Indicators taken into account
are:
Number of procedures to legally start and operate a company
Time required to complete each procedure
Cost required to complete each procedure
Paid-in minimum capital
11. The ranking given by calculating the simple average of
the percentile rankings on the 4 component indicators:
Procedures, Time, Cost, paid-in minimum capital
requirement.
• Information is readily available to the entrepreneur.
• The entrepreneur will pay no bribes.
• Business conducts general commercial or industrial activities.
• Business has a start-up capital of 10 times income per capita.
• Business has a turnover of at least 100 times income per capita.
• Business does not qualify for any special benefits.
12. • Starting a business in India requires 12 procedures to be
followed, takes 27 days to complete all these procedures, costs
47.3% of income per capita and requires paid-in-capital of
124.4% of income per capita.
• India stands 179 in ranking of 189 economies on the ease of
starting a business:
48
86
88
120
123
158
175
179
Mexico
South asia
Russian federation
Japan
Brazil
China
Indonesia
India
COUNTRIES
Ease of starting a business
Rank
13. • TIME: India
takes 27
days, New
Zealand ranks
first as it takes
only a day to
complete
registration
process.
• PROCEDURE:
India still
follows the
same number
of 12
procedures
making no
changes since
2004.
Source: Doing Business Report, World Bank
Source: Doing Business Report, World Bank
14. COST: In India, it is
somewhere around
47.3% of per capita
income. The cost of
completing the
procedure has reduced
significantly from 80% in
2007 but it is still above
average
• PAID-IN MINIMUM
CAPITAL: amount that
has to be deposited in
the bank or with notary
before registration or
within 3 months of
registration. In
India, paid-in minimum
capital is around 124.4%
of per capita income.
Though there has been
a drastic reduction in
the amount to be paid
but this is still much
Source: Doing Business Report, World Bank
Source: Doing Business Report, World Bank
15. • Economies around the world have taken steps making it
easier to start a business - streamlining procedures, making
procedures simpler or faster by introducing technologies
however India has been a laggard in this respect taking
initiatives only in 2011 by establishing an online VAT
registration system.
17. A robust bankruptcy system functions as a filter, ensuring
the survival of economically efficient companies and
reallocating the resources of inefficient ones. Indicators
taken into account are:
Time required to recover debt (years)
Cost required to recover debt (% of debtor’s estate)
Outcome
Recovery rate for creditors (cents on the dollar)
18. • India stands 121 in
ranking of 189
economies on the
ease of resolving
insolvency in
India:
1
26
55
78
105
121
135
144
Japan
Mexico
Russian Federation
China
Regional Average…
India
Brazil
Indonesia
COUNTRIES
Ease of resolving insolvency
Rank
Source: Doing Business Report, World Bank
TIME: Time taken
to resolve
insolvency has
been constant at
4.3 years since
2004 and there
has been no
change till today. Source: Doing Business Report, World Bank
19. COST REQUIRED
TO RECOVER
DEBT: includes court
fees, lawyers’ fees and
other related fees and
for India it is around
9% of debtor’s estate.
• RECOVERY
RATE: measures
the cents on the
dollar recovered by
creditors, present
value of debt
recovered etc. In
India, the cents
recovered on the
dollar are less i.e.
25.6 cents.
Source: Doing Business Report, World Bank
Source: Doing Business Report, World Bank
20. • Even in this scenario, India has taken little measures
and done less on bringing new reforms to improve
the current situation. It only took steps in 2010 &
eased the process of closing a business by making
processes more effective thus reducing time
needed.
21.
22. The economy has a score of
5 on the depth of credit
information index and a
score of 8 on the strength of
legal rights index
Higher scores indicate
more credit
information and
stronger legal rights for
borrowers and lenders.
28. According to data collected by Doing Business, dealing with
construction permits' in India requires 35 procedures, takes
168.0 days and costs 2640.4% of income per capita
Source: Doing Business Report, World Bank
30. Procedures: Worsened over time-much above regional average
Time : Improved over time. Now below Regional average
Cost: Has decreased steadily over time but still above regional
average
Source: Doing Business Report, World Bank
31. “ Taxes are what we pay for a civilized society”
32. Taxes are essential. They fund the public
amenities, infrastructure and services that are crucial for
a properly functioning economy
But the level of tax rates needs to be carefully
chosen—and needless complexity in tax rules should
be avoided
Tax payments for a manufacturing company in 2012 (number per
year adjusted for electronic and joint filing and payment)
Time required to comply with 3 major taxes (hours per year)
Total tax rate (% of profit before all taxes)
LOCATION OF STANDARDIZED COMPANY
City: Mumbai
33. • On average, firms make 33 tax payments a year, spend 243 hours a
year filing, preparing and paying taxes and pay total taxes amounting
to 62.8% of profit
• Globally, India
stands at 158 in
the ranking of
189 economies
on the ease of
paying taxes
Source: Doing Business Report, World Bank
34. Over the years, paying Taxes has become easier, with the
government merging many taxes and eliminating others, new
electronic filing and payment system along with new technology
saves a lot of time and is transparent
Source: Doing Business Report, World Bank
35. Changes have brought concrete results.
Some noticeable changes by India to make paying
taxes easier –
•Consolidating filings
• Reducing the frequency of payments
• Offering electronic filing and payment
• Lowering tax rates
36. Reforming the tax system, by ensuring rates are at a
reasonable level and making it easier to pay, will
encourage local businesses to register and pay their taxes
and can help developing country governments increase
their tax revenues
Source: Doing Business Report, World Bank
37.
38. Efficient and transparent courts encourage new business
relationships because businesses know they can rely on the courts if
a new customer fails to pay.
Speedy trials are essential for small enterprises, which may lack the
resources to stay in business while awaiting the outcome of a long
court dispute.
The seller and buyer are located in the economy’s largest business
city.
The buyer orders custom-made goods, then fails to pay.
The seller sues the buyer before a competent court.
The value of the claim is 200% of income per capita.
The seller requests a pretrial attachment to secure the claim.
The dispute on the quality of the goods requires an expert opinion.
The judge decides in favor of the seller; there is no appeal.
The seller enforces the judgment through a public sale of the
buyer’s movable assets.
39. • Procedures to enforce a contract through the courts (number) :
Steps to file and serve the case
Steps for trial and judgment
Steps to enforce the judgment
• Time required to complete procedures (calendar days) :
Time to file and serve the case
Time for trial and obtaining judgment
Time to enforce the judgment
• Cost required to complete procedures (% of claim) :
Average attorney fees , Court costs, Enforcement costs
40. Contract enforcement takes 1420 days, costs 39.6% of the value of the
claim and requires 46 procedures
Globally, India stands at 186 in the ranking of 189 economies on the
ease of enforcing contracts
Source: Doing Business Report, World Bank
41. Economies in
all regions have
improved
contract
enforcement in
recent years
Source: Doing Business Report, World Bank
Source: Doing Business Report, World Bank
42. A judiciary can be improved in different ways.
Higher-income economies tend to look for ways to
enhance efficiency by introducing new technology.
Lower-income economies often work on reducing
backlogs by introducing periodic reviews to clear
inactive cases from the docket and by making
procedures faster
ENFORCING CONTRACTS :
City: Mumbai
Claim Value LCU: 142711
Court Name: Bombay City Civil
Court
Source: Doing Business Report, World Bank
43.
44. Access to reliable and affordable electricity is vital for businesses. To
counter weak electricity supply, many firms in developing economies
have to rely on self-supply, often at a prohibitively high cost.
• Procedures to obtain an electricity connection (number)
•Time required to complete each procedure (calendar days)
•Cost required to complete each procedure (% of income per capita)
Whether electricity is reliably available or not, the first
step for a customer is always to gain access by obtaining a
connection
In an effort to ensure safety in the connection process while
keeping connection costs reasonable, governments around the
world have worked to consolidate requirements for obtaining an
electricity connection.
45. The warehouse:
•Is located in the economy’s largest business city, in an area where
other warehouses are located.
•Is not in a special economic zone where the connection would be
eligible for subsidization or faster service.
•Has road access. The connection works involve the crossing of a
road or roads but are carried out on public land.
• Is a new construction being connected to electricity for the first
time.
•Has 2 stories, both above ground, with a total surface of about
1,300.6 square meters (14,000 square feet), and is built on
a plot of 929 square meters (10,000 square feet).
46. Getting electricity here requires 7 procedures, takes 67 days and
costs 230.7% of income per capita
Source: Doing Business Report, World Bank
47. Globally, India stands at 111 in the ranking of 189 economies on
the ease of getting electricity
Other statistics can be depicted below -
In many economies the connection process is complicated by the
multiple laws and regulations involved—covering service
quality, general safety, technical standards, procurement practices
and internal wiring installations.
Source: Doing Business Report, World Bank
48. 1. Submit application to the local distribution utility and await site inspection ( 7
calendar days )
2. Receive external site inspection from the utility and await estimate
( 8 calendar days )
3. Electrical contractor conducts external connection works ( 7 calendar days )
4. Submit electrical contractor's wiring and test report and estimated
amount to the utility ( 1 calendar days )
5. The utility inspects wiring and installs meter ( 7 calendar days )
6. It then inspects and tests installation ( 7 calendar days )
7. Submit meter security deposit, receive external connection and the
electricity starts flowing ( 30 calendar days )
OBTAINING AN ELECTRICITY CONNECTION
City: Mumbai
Name of Utility: Bhrihan Mumbai Electricity & TransportUndertaking
49.
50. Protection of investors matters for the ability of
companies to raise the capital to grow,
innovate, diversify and compete.
If the laws does not protect minority
shareholders, investors may be reluctant to provide
funding to companies through the purchase of
shares unless they become the controlling
shareholders.
Ranking 2013: 32
Ranking 2014: 34
India needs detailed disclosure and define clear duties for
directors
Well-functioning courts and up-to-date procedural rules that give
minority shareholders the means to prove their case and obtain a
judgment within a reasonable time
51.
52. 16
52
68
80
80
98
115
Japan
India
Indonesia
Mexico
Regional Average (South Asia)
Brazil
China
Russian Federation
Rank
While indicators does not measure all aspects of
investor protection, a higher rank indicates that an
economy’s regulations offer stronger investor
protections against self-dealing in the areas
measured.
53.
54. Indicators India South Asia average OECD high income
average
Extent of disclosure
index
7 5 7
Extent of disclosure
index
4 4 5
Ease of shareholder
suits index
8 6 7
Strength of investor 6.3 5.1 6.2
55.
56. Making trade between
economies easier is
increasingly important for
business.
Excessive document
requirements, customs
procedures, inefficient
port operations and
inadequate infrastructure
all lead to extra costs and
delays for exporters and
importers, stifling trade
potential