Ease of Doing Business

By : Neha Dhyani

Updated : May 19, 2022, 11:47

Owing to the data irregularities along with some ethical issues found in the reports of 2018 and 2020, The World Bank has announced to discontinue publishing the Ease of Doing Business Report.

What is Ease of Doing Business?

The Ease of Doing Business Index created by the World Bank contains multiple parameters to evaluate the performance of different countries in terms of the ease of doing business.

The Ease of Doing Business Index came into existence in 2003 as an assessment of the impact of reforms and policies introduced by countries on ten different criteria affecting the business through the life cycle.

EoDB index is a global ranking system developed by the World Bank Group that provides rankings of 190 countries across the world on the basis of their performance on the index.

Ease of Doing Business - What You Should Know?

The Ease of Doing Business Index is one of the three major reports released by the World Bank. It was introduced in 2003 to measure the condition of business environments in different countries.

The index works as a ranking system where higher ranks mean simpler and better regulations for businesses in the country. Economies see a good ranking on the report as an effective way of attracting foreign investment and growing the economy.

The rankings on the report have additional significance from the influence on the World Bank's decisions regarding its support.

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Significance of The Ease of Doing Business Index

It not only affects the business environments but encourages deregulating economies which is why there is always strong competition among nations to secure a top position on the report. Over 3500 reforms have been introduced across countries following the launch of this system.

The ten parameters used to assess countries include Starting a Business, Handling Construction Permits, Availability of Electric Power, Registration of Property, Credit Availability, Tax Payment, Investor Protection, Contracts Enforcement, Cross-Border Trading, and Resolving Insolvency.

Countries are ranked on the basis of a DtF score (Distance to Frontier) that represents the gap with reference to the best practice. For example, a score of 75 suggests that the country is only 25% away from the best performance.

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India's Performance In Recent Years

India has been showing a highly notable improvement in the ranking on this report. It ranked low at 130-140 till 2014 but has jumped to rank at 63rd position in the report of 2020 with a score of 71.

To conclude, it can be said that India has performed well under parameters like trading across borders and securing permits. India has also been the fifth in terms of reforms introduced in 2018-19 and ranks among the top ten improvers.

Steady improvements on the Ease of Doing Business Index are known to translate into massive gains in economic value on the ground, with countries witnessing vibrant trade and commerce, and increasing mobility rates among the poor.

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FAQs on the Ease of Doing Business

Q.1. When was the first Ease of Doing Business Index report published?

The first-ever Ease of Doing Business was released in 2003.

Q.2. How many members participate in the Ease of Doing Business Index?

The Ease of Doing Business system includes a total of 190 countries.

Q.3. Who publishes the Ease of Doing Business Index?

Every year, the World Bank Group publishes the Ease of Doing Business Report as an assessment of the business regulations in 190 economies around the world.

Q.4. Who tops the Ease of Doing Business Index?

In the latest Ease of Doing Business Report published by the World Bank Group, New Zealand topped with a Doing Business score of 86.8.