In my earlier post I have given details about the time, effort and paperwork required to start a business in India. Even though India is ranked a lowly 134th in the world, it has been getting better progressively for last few years. According to a new report entitled Five reforms reduced the time, cost, and hassle for businesses in India to comply with legal and administrative requirements, placing the country in the top 20 reformers worldwide.
Of the 12 major Indian cities covered by the report, Hyderabad has the most business-friendly regulations, followed by Bangalore and Jaipur. Mumbai came in second-to-last and Calcutta last, as these cities impose the most complex and costly business regulations. Bhubaneshwar, Chandigargh, Chennai, Lucknow, New Delhi, Patna and Ranchi rank in the middle. Typically, large urban centers such as Mumbai and Calcutta have a high volume of business, so regulatory and adminstrative bottlenecks there create serious congestion.
The report also compares business regulations in South Asia with 175 economies around the world. India, the region’s top reformer, implemented reforms to simplify business registration, cross-border trade, and payment of taxes, as well as to ease access to credit and strengthen investor protection. Although the reforms improved India’s ranking over last year’s, it still ranks relatively low at 134 and stands 41 places after China, which is reforming at a faster pace. The top-ranked countries in the region are the Maldives (53) and Pakistan (74), followed by Bangladesh (88), Sri Lanka (89), Nepal (100), India (134), Bhutan (138), and Afghanistan (162).
India has made significant improvements in reducing the amount of red tape entrepreneurs face daily. It now takes, for example, 35 days to register a business in Mumbai, compared with 71 days a year ago and 89 days in 2004. But despite clear improvements in five out of 10 Doing Business indicators, India can do much better,” said Caralee McLiesh, an author of the Doing Business in South Asia report.
Doing business among Indian cities. For example, in Hyderabad it only takes 35 days to register property, compared to New Delhi, where it takes almost four times as long (138 days), or to Calcutta, where it takes almost five times as long (155 days). Within India, it is fastest to import and export goods through the Chennai and Calcutta ports, as opposed to through Mumbai.
States can learn from each other in the areas of business regulation. For example, it is easiest to start a business in Jaipur. Closing a business is easiest in Bangalore, while registering a property is easiest in Hyderabad.