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Ease of Doing Business Ranking

For RBI Grade B 2018 and NABARD Grade A and Grade B 2018

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Relevance of this Topic

With Regard to RBI:


Phase 1: General Awareness Section

Phase 2 (Paper – II): Economic and Social Issues under Economic Reforms in India and Globalization
topics.

With Regard to NABARD (Grade A and Grade B)


Phase 1: Economic and Social Issues Section

Phase 2 (Paper – II): Economic and Social Issues under Economic Reforms in India and Globalization

topics.

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EASE OF DOING BUSINESS INDEX
• The Ease of Doing Business Index is an index formulated by World Bank which indicates
the ease of doing business in a country.

• It was introduced in 2004.

• Higher ranking (low numerical value) indicates better & simpler regulations for business
and stronger protection of property rights.

• It signifies that the regulatory environment in a country is more conducive for starting and
operating a firm.

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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

• 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 regulatory processes in the largest
business city of an economy.

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Distance to Frontier…..what is it?

• The Distance to Frontier measure shows the distance of each economy from the
frontier, which represents the best performance observed on each of the
indicators across all economies in the Doing Business sample since 2005.

• The score is out of 100 with 0 representing the lowest performance and 100
being the frontier.

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The difference between the Ease of Doing Business Index and DTF Score?

• While governments and international investors look at the overall Doing Business
ranking, the Distance to Frontier is a more relevant indicator of conditions faced by
domestic small and medium enterprises.

• An ease of doing business ranking shows only how much a country’s regulatory
environment has changed relative to that in other economies.

• A Distance to Frontier score, on the other hand, shows how much the regulatory
environment for entrepreneurs in an economy has changed over time in absolute
terms.
Distance to Frontier’ scores, which are an absolute measure of progress by a country.
The rankings, on the other hand, are relative, and hence subject to reform actions taken
by other countries.
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Areas not covered by Doing Business
• Macroeconomic stability

• Development of the financial system

• Quality of the labor force

• Incidence of bribery and corruption

• Market size

• Lack of security

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Doing Business 2018: Reforming to Create Jobs
• It is the 15th in the series of annual reports measuring the regulations that enhance business
activity and those that constrain it.

• Doing Business measures regulations affecting 11 areas of the life of a business.

• Ten of these areas are included in this year’s ranking on the ease of doing business: 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.

• Doing Business also measures labor market regulation, which is not included in this year’s
ranking.

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Main Findings
• From June 2, 2016, to June 1, 2017, Doing Business recorded 264 regulatory reforms making
it easier to do business—with 119 economies implementing at least one reform across the
different areas measured by Doing Business.

• New Zealand, Singapore and Denmark retained their first, second and third spots.

• South Asia is the only region not represented in the top 50 ranking for ease of doing
business.

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Ease of doing business (2018) & India

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• India has jumped over 30 ranks to attain 100th spot from 130th position in 2017 Ease
of Doing Business Index.

• With this year's performance, India became the first ever country to record highest
jump in World Bank's ease of doing business ranking.

• India is only country in South Asia and BRICS economies to feature among most
improved economies of the Doing Business Report this year.

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India was listed by the World Bank as one of the top improvers this year, having implemented reforms
in eight out of 10 areas in a single year.
India’s performance over the past 15 years is also commendable for having implemented 37 reforms,
the highest in South Asia. Sri Lanka follows with 22 reforms and Pakistan with 19.

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India’s position among the BRICS nations:

• India used to be the last among the BRICS countries in the ranking but now it has
overtaken Brazil in the list.

• It stands at 4th position among the BRICS nations.

• Russia at 35 is the best among BRICS countries while Brazil is now the last.

India’s position among its neighbours:

• Nepal (105), Sri Lanka (111), Maldives (136), Pakistan (147), Bangladesh (177) and
Afghanistan (183) were ranked below India.

• Bhutan was ranked above India holding the 75th position.

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India has seen an improvement in 6 out of 10 indicators.

They are Resolving Insolvency, Paying Taxes, Getting Credit, Enforcing Contracts,
Protecting Minority Investors and Construction Permits.
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Some of the important observations

India’s best performance:


India’s corporate law and securities regulations were recognized as highly
advanced, placing it in fourth place in the global ranking on protecting minority
investors.

India’s worst performance:


Its worst performance came in “dealing with construction permits” despite
improving its ranking to 181 from the 185th position last year.

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Some of the important observations

• India still lags in areas such as starting a business, enforcing contracts and dealing
with construction permits.

• It takes longer to enforce a contract today, at 1,445 days, than 15 years ago (1,420
days).

• In starting a business, India has reduced the time needed to register a new
business to 30 days now from 127 days 15 years ago.

• But we see that the need for local entrepreneurs to go through 12 procedures to
start a business, as opposed to five in high-income countries, worsened India’s
ranking as compared to last year.

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India’s Distance to Frontier Scores

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India’s Distance to Frontier Scores
• India’s Distance to Frontier score in Doing Business 2018 is 60.7, which means it is
around 40 percentage points away from the frontier.

• India’s Distance to Frontier score improved by 4.7 percentage points in Doing


Business 2018 from 56 in Doing Business 2017.

• This year, New Zealand ranked first with a Distance to Frontier score of 86.5,
followed by Singapore with 84.5.

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India’s Distance to Frontier Scores

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Data not representative of the whole Country

• Doing Business collects data only from the largest business city of an economy.

• For countries with a population above 100 million, data from the second biggest
city is also included.

• Thus, the data for India is from Mumbai and Delhi.

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MCQ’s

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1. The ease of doing business index is formulated by which of the following organizations?
a. IMF (International Monetary Fund)
b. FAO (Food & Agricultural Organization)
c. WEF (World Economic Reform)
d. World Bank

2. The ease of doing business index was introduced in which year?


a. 2001
b. 2002
c. 2003
d. 2004

3. Higher ranking (a low numerical value) on ease of doing business index indicates?
a. Better & simpler regulations for business
b. Poorer & tougher regulations for business
c. No effect on business regulations
d. None of the above
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4. Ease of doing business index measures how many areas of business regulation?
a. 2
b. 5
c. 8
d. 10

5. Which of the following is not the one of the areas of business regulation taken into account by
Ease of doing business index?
a. Starting a business
b. Dealing with construction permits
c. Getting electricity
d. Getting water connection

6. Which of the following is one of the areas of business regulation taken into account by Ease of
doing business index?
a. Trading across borders
b. Enforcing contracts
c. Resolving insolvency
d. All of the above www.edutap.co.in
7. The areas of business regulation taken into account by Ease of doing business index
have___________weightage?
a. Equal
b. Unequal
c. In proportion to their size in the economy
d. None of the above

8. Which of the following areas are not covered by Ease of Doing Business Index?
a. Macroeconomic stability
b. Development of the financial system
c. Quality of the labor force
d. All the above

9. What is the Title of Ease of doing business report 2018?


a. Reforming to create jobs
b. Transforming to create jobs
c. Building good environment of doing business
d. None of the above www.edutap.co.in
10. Ease of doing business report 2018 is_______in the series of annual reports measuring the
regulations that enhance business activity and those that constrain it?
a. 14th
b. 15th
c. 16th
d. 17th

11. Ease of doing business report 2018 compares business regulation for domestic firms in how
many countries?
a. 170
b. 175
c. 185
d. 190

12. Which of the following are the most improved economies in 2016/17 in areas tracked
by Doing Business report 2018?
a. Darussalam
b. Thailand
c. India
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13. The regions with the highest share of reforming economies in Doing Business Report 2018
are?
a. Europe and Central Asia
b. South Asia
c. Sub-Saharan Africa
d. All the above

14. Which of the following country retained the first spot in the Doing Business Report 2018?
a. New Zealand
b. Singapore
c. Denmark
d. Norway

15. Which of the following country stands out this year as one of the 10 economies that
improved the most in the areas measured by Doing Business Report 2018?
a. Pakistan
b. Bhutan
c. India
d. Bangladesh www.edutap.co.in
16. Which area has the widest variation in performance among the areas measured by Doing
Business Report 2018?
a. Sub-Saharan Africa
b. Europe and Central Asia
c. South Asia
d. All the above

17. What is the India’s rank in 2018 Ease of Doing Business Index?
a. 98
b. 99
c. 100
d. 101

18. Which country is the only country in South Asia and BRICS economies to feature among most
improved economies of the Doing Business Report 2018?
a. Brazil
b. China
c. India
d. Bhutan www.edutap.co.in
19. Which country is last among the BRICS countries in the ranking of Doing Business Report 2018?
a. Brazil
b. Russia
c. India
d. South Africa

20. India has saw improvement in which of the following indicators in Doing Business Report
2018?
a. Resolving Insolvency
b. Paying Taxes
c. Getting Credit
d. All the above

21. On which of the following indicators, India has ranked in single digit (i.e. 4th) Doing Business
Report 2018?
a. Getting Credit
b. Protecting Minority Investors
c. dealing with construction permits
d. Resolving Insolvency www.edutap.co.in
22. India has reduced the time to register a new business to______days in 2017 from 127
days 15 years ago?
a. 15
b. 30
c. 45
d. 60

23. India’s worst performance is in which of the following indicators as per the Doing
Business Report 2018?
a. Dealing with construction permits
b. Getting Credit
c. Enforcing Contracts
d. None of the above

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ANSWERS
1. D 13. D
2. D 14. A
3. A 15. C
4. D 16. A
5. D 17. C
6. D 18. C
7. A 19. A
8. D 20. D
9. A 21. B
10. B 22. B
11. D 23. A
12. D www.edutap.co.in
Ease of Doing Business Rankings

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Thank You! Happy Learning!

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