Ease Of Doing Business Concept


Ajit Kumar AJIT KUMARWISDOM IAS, New Delhi.

Ease of doing business is an index published by the World Bank. It is an aggregate figure that includes different parameters which define the ease of doing business in a country.
Description
It is computed by aggregating the distance to frontier scores of different economies. The distance to frontier score uses the 'regulatory best practices' for doing business as the parameter and benchmark economies according to that parameter. For each of the indicators that form a part of the statistic 'Ease of doing business,' a distance to frontier score is computed and all the scores are aggregated. The aggregated score becomes the Ease of doing business index. Indicators for which distance to frontier is computed include construction permits, registration, getting credit, tax payment mechanism etc. Countries are ranked as per the index.
The index is based on the study of laws and regulations, with the input and verification by more than 9,600 government officials, lawyers, business consultants, accountants and other professionals in 185 economies who routinely advise on or administer legal and regulatory requirements. The ease of doing business index is meant to measure regulations directly affecting businesses and does not directly measure more general conditions such as a nation's proximity to large markets, quality of infrastructure, inflation, or crime.

A nation's ranking on the index is based on the average of 10 subindices:
(1) Starting a business – Procedures, time, cost and minimum capital to open a new business
(2) Dealing with construction permits – Procedures, time and cost to build a warehouse
(3)Getting electricity – procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse
(4)Registering property – Procedures, time and cost to register commercial real estate
(5) Getting credit – Strength of legal rights index, depth of credit information index
(6)Protecting investors – Indices on the extent of disclosure, extent of director liability and ease of shareholder suits
(7)Paying taxes – Number of taxes paid, hours per year spent preparing tax returns and total tax payable as share of gross profit
(8)Trading across borders – Number of documents, cost and time necessary to export and import (9)Enforcing contracts – Procedures, time and cost to enforce a debt contract
(10)Resolving insolvency – The time, cost and recovery rate (%) under bankruptcy proceeding

The Doing Business project also offers information on following datasets:
(i) Distance to frontier - Shows the distance of each economy to the “frontier,” which represents the highest performance observed on each of the indicators across all economies included in Doing Business since each indicator was included in Doing Business
(ii) Entrepreneurship - Measures entrepreneurial activity. The data is collected directly from 130 company registrars on the number of newly registered firms over the past seven years
(iii) Good practices - Provide insights into how governments have improved the regulatory environment in the past in the areas measured by Doing Business
(iv) Transparency in business regulation - Data on the accessibility of regulatory information measures how easy it is to access fee schedules for 4 regulatory processes in the largest business city of an economy

Saturday, 05th Dec 2015, 02:00:49 AM

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