India retains its dubious reputation of one of the most difficult places to do business in the world. It ranks 132nd among 185 countries in Doing Business 2013, a study by the International Finance Corporation. India ranks below Bangladesh (129) and Sri Lanka (81). Though its position is unchanged from last year’s, it still is bad news as it aspires to resume 8%-plus growth rate in the medium term to create jobs and lift its citizens out of poverty.
Overrall, it only be dubbed a poor performance. Among the 10 indicators that are considered, some are
• starting a business
• investor protection
• getting electricity and contract enforcement
India’s ranking declined on 6 parameters while it improved slightly on 2 parameters. On two parameters, it was unchanged. India ranks second from the bottom in contract enforcement, the basis of a functioning market economy. It is impossible for an economy to grow sustainably without an efficient contract enforcement mechanism. The time taken for dispute resolution in Indian courts is roughly three times more than that in OECD countries.
Similarly, India is ranked 173 on starting a business. Both starting and liquidating a business is more difficult here in comparison with the rest of the world. And things have gotten worse in the past year.
Singapore, Hong Kong and New Zeland are the three countries topping the list.