Starting a business in India
The Doing Business arm of the World Bank has published a report on the state of doing business in South Asia. The goal of the report is to provide benchmarks, based on several objective factors, on how business friendly a country is. They also provide suggestions to reform the bottlenecks that a country may be facing.
As per this latest report, India is the top reformer in the South Asia region. Starting a business in India has become considerably easier - It now takes 35 days to register a company in Mumbai as opposed to 71 days a year ago and 89 days in 2004. It is further projected that as part of the e-governance initiative undertaken by Ministry of Company Affairs (MCA-21 project), the time taken to start a business will reduce further.
India is definitely making much needed reforms - but it still has a long way to go. Consider the following:
- India still ranks 88 in the world in terms of ease of starting a business
- India is ranked lowest in the world (155) in terms of dealing with licenses related to a new business
- India is ranked 158 in terms of paying taxes for new businesses
- Number of procedures to start a new business in India is 11, which is very high compared to the average of 7 procedures
The report also highlights the major sub-national variations in terms of time and costs involved in starting a new business in India. For instance, it takes only 35 days to start a business in India while it takes 52 days to do the same in Delhi. Similarly, cost to start a business in Delhi is about 43.6% while in Mumbai, it is 74%.
Here’s how they rank various Indian cities in terms of ease of doing business in India:
1. Hyderabad
2. Bangalore
3. Jaipur
4. Chennai
5. Bhubaneshwar
Delhi is #8 and Mumbai is #11.
You can read the full report here (PDF file) and the India-specific profile begins on page 33. I highly recommend reading the report - it sheds some amazing insight and would be very useful to future entrepreneurs.
If you are an existing Indian entrepreneur, I’d like to hear about what are some of the difficulties you have faced / are facing in terms of starting / operating your business. Your input will be highly valued and beneficial to the entire community.
