India has become a better place for upcoming entrepreneurs to get a loan, but at the same time the overall process to start a business here has become tougher in the last one year. The recent World Bank study has found this fact. According to the 'Doing Business 2008' report published by the World Bank and its private sector lending arm IFC, India has moved up 12 positions in terms of 'ease of availability of business loans', but is still ranked in the bottom half at 120th position among 178 economies across the world.
The ranking format is based on ten different indicators of business regulation that track the time and cost to meet government requirements for business start-up, operation, trade, taxation and closure. India has improved significantly when it comes to getting easy credit and trading across the world, but its position has deteriorated in areas like starting a business, employing workers, registering a new property and paying taxes.
The country has been ranked 111th for starting business, down from 93rd in 2006. For dealing with licenses, it has dropped one rank to 134th, while for employing workers it has been placed two ranks down from previous 85th position. However, for getting business loan, India has climbed 26 positions to 36th as compared to 62nd in 2007. On the indicator of paying taxes, the country has lost seven positions to 165th, from 158th during 2006-07. For registering a property, India has dropped four rankings standing at 112 against 108 last year. For closing a business, it is down two places at 137th rank.
Noting that Indian government was taking liberal steps to speed up the reforms by making the availability of business loans easier. The report said the time to obtain a business license in India ranges from 159 days in Bhubaneshwar to 522 in Ranchi, while the time to register property ranges from 35 days in Hyderabad to 155 in kolkata. Easy availability of to start a new venture has catapulted the growth prospective of Indian economy.
The report said other economies in South Asia region were also gearing up on the path of reforms to improve the business environment. Smaller countries like Bhutan have also cut the number of lengthy licensing procedures required for starting a business. On taxes, the report found that , a medium-size firm has to make 60 types of payment a year in India. The number of hours spent preparing, filing, and paying the tax account to 271 hours and the percentage of profits they must pay in taxes is 19.6 percent of the annual turnover.
