'Ease of doing business’ refers to the regulatory environment in a country to set up and operate a business. The ease of doing business index is an index created by the World Bank Group. Economies are ranked on their ease of doing business, from 1–190. A high ease of doing business ranking means the regulatory environment is more conducive to the starting and operation of a local firm.

A nation's ranking on the index is based on the average of 10 sub-indices:

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:

• 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 since each indicator was included in Doing Business
• 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
• Good practices - Provide insights into how governments have improved the regulatory environment in the past in the areas measured by Doing Business
• 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

In India, these rankings are based on the business environment in Mumbai and Delhi. A lower rank indicates better performance on that parameter, whereas a higher rank indicates worse performance on the indicator.
India jumped 30 spots to secure a place among the top-100 countries on World Bank's ease of doing business ranking list in 2018. With this year's performance, India became the first ever country to record highest jump in World Bank's ease of doing business ranking.

What improvements has India brought in to help improve its Ease of Doing Business ranking?

• Starting a Business: India has made starting a business faster by merging the applications for the Permanent Account Number (PAN) and the Tax Account Number (TAN), and by improving the online application system. Mumbai also made starting a business faster by merging the applications for the value-added tax and the profession tax.
• Dealing with Construction Permits: India made dealing with construction permits less cumbersome by implementing an online system that has streamlined the process at the Municipality of New Delhi and Municipality of Greater Mumbai. The online system has streamlined the process of obtaining a building permit, thereby reducing the number of procedures and time required to obtain a building permit in India.
• Getting Credit: India has strengthened access to credit by amending the rules on priority of secured creditors outside reorganization proceedings and by adopting a new law on insolvency that provides a time limit and clear grounds for relief to the automatic stay for secured creditors during reorganization proceedings.
• Protecting Minority Investors: India strengthened minority investor protections by increasing the remedies available in cases of prejudicial transactions between interested parties.
• Paying Taxes: India made paying taxes easier by making payment of EPF mandatory electronically and introducing a set of administrative measures easing compliance with corporate income tax.
• Trading across Borders: India reduced import border compliance time in Mumbai by improving infrastructure at the Nhava Sheva Port. Export and import border compliance cost were also reduced in both Delhi and Mumbai by eliminating merchant overtime fees and through the increased use of electronic and mobile platforms.
• Enforcing Contracts: India made enforcing contracts easier by introducing the National Judicial Data Grid, which makes it possible to generate case measurement reports on local courts.
• Resolving Insolvency: India made resolving insolvency easier by adopting a new Insolvency and bankruptcy Code (IBC) that introduced a reorganization procedure for corporate debtors and facilitated continuation of the debtor s business during insolvency proceedings.
• Labor Market Regulation: India increased the mandatory length of paid maternity leave.

What are the problems with the Ease of Doing business ranking?

• Though a great measure to gauge ease of doing business, the ranking suffers from a few lacunae:
• In large economies, only two cities are taken for consideration under the rankings. This includes the largest and the second largest business city. In India, it is done for Delhi and Mumbai. Thus, it does not give a true reflection of the economy. If ease of doing business was calculated across other areas then the performance would most certainly have dropped.
• It only measures the policy side i.e. government efforts and ignores market forces and other factors like human resource. Thus, it should not be taken at face value for deciding which country is better to do business in.

Conclusion

A high ranking in one year is not the end in itself. To reach the target of top 50 in the rankings, India needs to be more vigilant in its approach. It needs to demonstrate not only the regulatory, governance and economic reforms to investors but also political and macroeconomic stability, law and order maintenance and quality physical infrastructure. At the same time, reforms should not be restricted to Mumbai and Delhi as this would improve the ranking on Ease of Doing Business Index but doesn t account for the actual ground picture of the whole country. To address this issue, State wise ranking of implementation of Business Reforms Action Plan needs to be continued. Not restricting to cooperative federalism, cooperative sub federalism also needs to be explored by bringing local bodies on board and encouraging their cooperation with Central and State governments.