Mumbai is a bad city for business: WB
Patna, Bhubaneswar Far Better
Subhro Niyogi | TNN
Kolkata: Believe it or not, doing business in Patna, Ranchi and even Lucknow
is easier than in Mumbai and Kolkata. That’s the conclusion drawn by
multi-lateral funding agency World Bank in its latest report on business
friendliness.
The report titled Doing Business in South Asia, released on Tuesday,
ranks Kolkata last among the 12 major cities in India. Hyderabad tops the
charts, followed by Bangalore and Jaipur. Mumbai is second from the bottom
with Kolkata saving it from total embarrassment. Bhubaneshwar, Chandigargh,
Chennai, Lucknow, New Delhi, Patna and Ranchi are ranked in the middle.
“Large urban centres like Kolkata and Mumbai are struggling because the
high volume of business is causing regulatory and administrative
bottlenecks,” said Caralee McLiesh, an author of the report.
Doing Business tracks a set of regulatory indicators related to business
start-up, operation, trade, payment of taxes, and closure by measuring the
time and cost associated with various government requirements. It tracks the
rules and regulations relating to 10 indicators of doing business and does
not measure differences in actual enforcement and implementation of rules,
regulations, and procedures. It does not track variables such as
macroeconomic policy, quality of infrastructure, currency volatility,
investor perceptions, or crime rates.
“Different local-level regulatory requirements, as well as differences
in implementation of national-level regulations, either enhance or constrain
local business activity and causes substantial differences in the ease of
doing business among Indian cities,” McLiesh said.
For example, it takes only 35 days to register a property in Hyderabad
against anywhere between 99 to 219 days in Kolkata. In Patna, it takes 119
days.
It takes 85 days for a medium-size company to start business in Kolkata.
That contrasts with 45 days in Jaipur and 42 days in Patna and 50 days in
Hyderabad. ‘India has improved on 5 counts’
Kolkata: A World Bank study has ranked Mumbai and Kolkata at the bottom of
Indian cities to do business in. In dealing with licences, Bhubaneswar is
the most efficient with just 122 days required for a medium-sized company.
In Hyderabad, it takes 148 days. In comparison, it takes a whopping 388 days
to get the requisite licences in Kolkata. Even in Patna, it takes less time
at 226 days.
In Bhubaneswar, 85.4% of a medium-sized company’s profit has to be paid
as tax. In Kolkata, the tax outgo is higher at 86.7% of the profit. It is
87.8% in Hyderabad and 89.1% in Patna. In Bhubaneswar, 59 tax payments are
required to be made in a year. The figure is 60 each in Kolkata and
Hyderabad and 63 in Patna.
Incidentally, India on the whole has made significant improvements in
reducing the amount of red tape entrepreneurs face daily. It now takes 35
days to register a business in Mumbai against 71 days a year ago and 89 days
in 2004.
“Despite clear improvements in five out of 10 Doing Business indicators,
India can do much better. By broadly adopting best practices in business
regulation that already exist within the country, India could jump
significantly in the global Doing Business rankings, well ahead of other
emerging markets like China,” McLiesh said. India is ranked 134 among 175
countries. For India to jump 55 places in the ease of Doing Business
rankings, the country will need to adopt Jaipur’s regulations on starting a
business, Bhubaneshwar’s rules on contract enforcement and taxes and
Chennai’s trade practices. Adopting these would move India’s current global ranking
from 134 to 79.
In the current report, China is ranked 92. In South Asia, Maldives leads
the ranking at 53 with Pakistan at 74. Bangladesh is ranked 88, Sri Lanka 89
and Nepal 100. Only Bhutan at 138 and Afghanistan at 162 are behind India.