The Doing Business Report* is the flagship publication of the World Bank Group that benchmarks business regulations in 191 economies. The Doing Business Report measures regulations that enhance business activity and those that constrain it. The Ease of Doing Business (EoDB) index is a ranking system established by the World Bank Group wherein the ‘higher rankings’ (a lower numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights.
The Ease Of Doing Business Score shows an economy’s absolute position relative to the best regulatory performance, whereas the ease of doing business ranking is an indication of an economy’s position relative to that of other economies.
In India, these indicators relate to business regulations for small and medium sized firms located in Delhi and Mumbai based on standardized case scenarios.The indicators are from 10 areas of business regulation such as:
Starting a Business, Dealing with Construction Permits, Getting Electricity, Registering Property, Getting Credit, Protecting Minority Investors, Paying Taxes, Trading across Borders, Enforcing Contracts, and Resolving Insolvency.
The Enforcing Contracts indicator is essential to the success of the Doing Business report. It measures time and cost to resolve a standardized commercial dispute as well as a series of good practices in the judiciary. Therefore, Time, Cost and Quality of Judicial Process are the three variables which the World Bank has taken into account for ranking the countries on the Enforcing Contracts parameter of the Ease of Doing Business Ranking.
Currently, only Delhi (spanning across 11 Delhi district courts) and Mumbai (included in its ambit 60 Bombay City Civil Courts) are under the purview of the Ease of Doing Business survey by World Bank. Whereas, Kolkata and Bengaluru are likely to be included in the forthcoming Doing Business Report.
The Department of Justice is the nodal department for the Enforcing Contracts Indicator. At present the Government has been aggressively pursuing various reform measures to create an effective, efficient, transparent and robust ‘Contract Enforcement Regime’. Several rounds of meetings have been held with leading law firms, corporate bodies, chambers of commerce and industry to work in an integrated manner along with the judicial fraternity to improve the quality and efficiency of commercial courts. Our target is to ensure that India’s ranking in this indicator comes within TOP 50.
* The ‘Doing Business Report’ by World Bank Group has been discontinued. The World Bank is formulating a new approach for assessing the business and investment climate in economies worldwide.
The data for the Ease of Doing Business rankings is collected by a combination of study of the codes of civil procedure, court regulations as well as questionnaires survey by local litigation lawyers and judges.
The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators. The details of the “Enforcing Contracts” parameters and scoring can be seen at:
Methodology of Enforcing Contracts.
The Overall Rank of India in the Doing Business Report 2015 was 142 out of 190 economies. This has improved to 63rd Position in the Doing Business Report 2020 released in October 2019.
This is a significant improvement of 79 positions from the Doing Business Report 2015.
In Enforcing Contracts indicator, India achieved 163rd position in the Doing Business Report 2020, an improvement of 23 positions from the 186th rank in the Doing Business Report 2015.
For ranking purposes, the performance of 190 economies on 11 indicators is measured.The strength of the business environment is scored on the basis of an economy’s performance in each of these indicators. This approach facilitates the comparison of regulation across economies.The Ease of Doing Business Score serves as the basis for ranking economies on their business environment. The ranking is obtained by sorting the economies by their scores.
