WASHINGTON: Cumbersome tax and legal procedures have knocked India down 2 notches to 122 in the 'Doing Business Report 2009' - a global ranking prepared by the International Finance Corporation and the World Bank. "India's ranking has come down not because country has done anything hard, but because other nations have done well on improving the business climate in their countries," Sabine Hertveldt, co-author of the report said.
The country's ranking was even lower than its neighbours including Nepal, Bangladesh, Sri Lanka and Pakistan. "The major areas of concern which require improvement are procedures relating to payment of taxes, enforcement of business contracts and closure of business," she said, adding, "India ranked poorly in all these parameters." The report, which has ranked Singapore as the best place to do business, covered 181 countries providing quantitative measure of regulation for starting a business, getting credit, paying taxes, enforcing contracts and closing a business.
As regard to specific parameters, Hertveldt said in terms of enforcement of contract, India ranked at 180 out of 181 countries reflecting poor functioning of judicial system. "Tax procedures are cumbersome requiring a company to make payments 60 times a year," she said, pointing out India was ranked at 169 in this category. She added that the foreign companies have to pay 71.5% of their profits as taxes, against less than 40% in countries like Bangladesh, Nepal and Pakistan.
Hertveldt said online payment of taxes, improvement in procedure for construction permission and streamlining of judicial system could significantly pull up India's ranking in Doing Business Index. India, she added, has done better than others in areas relating to export and import of goods. The report, which ranks the country on the basis of ease of doing business, has placed Nepal above India at 121 position, Bangladesh at 110 and Pakistan at 77 in the overall ranking.
The 2008 report had ranked India at 120, while Pakistan was at 74 place last year. Among the South Asian countries India was ranked lowest as far as procedure to start a business is concerned, though in terms of number of days to set up an enterprise it has advantage over Bangladesh and Sri Lanka.
The country's ranking was even lower than its neighbours including Nepal, Bangladesh, Sri Lanka and Pakistan. "The major areas of concern which require improvement are procedures relating to payment of taxes, enforcement of business contracts and closure of business," she said, adding, "India ranked poorly in all these parameters." The report, which has ranked Singapore as the best place to do business, covered 181 countries providing quantitative measure of regulation for starting a business, getting credit, paying taxes, enforcing contracts and closing a business.
As regard to specific parameters, Hertveldt said in terms of enforcement of contract, India ranked at 180 out of 181 countries reflecting poor functioning of judicial system. "Tax procedures are cumbersome requiring a company to make payments 60 times a year," she said, pointing out India was ranked at 169 in this category. She added that the foreign companies have to pay 71.5% of their profits as taxes, against less than 40% in countries like Bangladesh, Nepal and Pakistan.
Hertveldt said online payment of taxes, improvement in procedure for construction permission and streamlining of judicial system could significantly pull up India's ranking in Doing Business Index. India, she added, has done better than others in areas relating to export and import of goods. The report, which ranks the country on the basis of ease of doing business, has placed Nepal above India at 121 position, Bangladesh at 110 and Pakistan at 77 in the overall ranking.
The 2008 report had ranked India at 120, while Pakistan was at 74 place last year. Among the South Asian countries India was ranked lowest as far as procedure to start a business is concerned, though in terms of number of days to set up an enterprise it has advantage over Bangladesh and Sri Lanka.
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