Where is India when the world does business? Trailing behind China, Bhutan, Botswana and Sri Lanka, says a World Bank-International Finance Corporation ‘Doing Business in 2006’ report.This third compilation and analysis of how 155 nations deal with entry regulations, licences, credit, investor protection, cross-border trade, taxes, hiring and firing of workers and reforms, places India at the 116th position.Arch-rival China has done much better, bagging the 91st rank, though Hong Kong and Taiwan have fared better than China itself, bagging the 7th and 35th positions. ‘‘And India, though making big gains on collateral recovery and ease of registering property, ranks 116 — 25 places behind China,’’ says the report.New Zealand and Singapore were the easiest countries to do business in. The US came in third, followed by Canada, said the study.However, there is a rider. The rankings are not a sweeping judgement call on where investments should go, as it says clearly: ‘‘Rankings on the ease of business do not tell the whole story. The indicator is limited in scope. But a high ranking does mean that the government has created a regulatory environment conducive to the operation of business.’’The report does not account for a country’s proximity to large markets, the quality of infrastructure services it provides, except when they relate to exports, the security of property from theft and looting, the macroeconomic conditions or the underlying strength of its institutions.Not surprisingly, says the study, it takes two days to start a business in Australia, 71 in India and 35 in Bangladesh. But astonishingly, setting up a business involves 11 procedures in India, Pakistan and Bhutan and only one in Afghanistan. The answer to the riddle, says the report, lies in the fact that Afghanistan embarked upon a set of sweeping reforms targeted at making business easy in 2004.But if, for instance, a small-medium limited liability company in the most populous city, domestically-owned and run in the construction business, with 20 qualified employees and a turnover at least 100 times per capita had to build a 1,300 square metre warehouse over two floors, it would take 270 days to obtain a licence in India, 147 in Nepal, 167 in Bangladesh and 249 days in Bhutan.China falls among the most-regulating economies for licencing, too. It would take 363 days to get a licence to run a business there, compared to 668 in Iran and 56 in Finland, which tops the chart. China has more procedures too — 30 in all — compared to seven in Denmark, with the least procedures and 48 in Sierra Leone.A look at the hiring trends in India and China, however, leaves an interesting trail. While the hiring cost as a percentage of salary is at 12 in India, it is at a much higher 30 per cent in China. To add, the cost of firing a worker in China takes 90 salary weeks, but in India, it costs a only 79 salary weeks.Getting credit should be easy in China, with the 2nd position on the strength of its legal rights index. On this front, India is ranked 5 among the 155 nations reviewed.China also scores a 4.3 on the investor protection front, faring worse than India’s score of six. And in terms of paying taxes, 43.2 per cent of Indian profits go to the taxman, 46.9 per cent in China.As for the study, most of those at the top of the list are wealthy and technologically advanced, like Australia, Britain, Denmark, Hong Kong and Norway. Hong Kong, a semi-autonomous region of China is placed ahead of the Red Dragon. But the World Bank said the formerly communist nations of Central Europe had made some of the biggest advances in supporting private business. Two former Soviet republics — Lithuania, in 14th place, and Estonia, in 15th — ranked ahead of Switzerland, Belgium and Germany.
