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Fine-print of India’s improved EoDB ranking is disturbing, Start Ups faltering

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8 years ago

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Fine-print of India’s improved EoDB ranking is disturbing, Start Ups faltering

[vc_row][vc_column][vc_column_text]Despite PM Narendra Modi’s Start Up India initiative, World Bank’s Ease of Doing Business rankings show starting new business in India is becoming difficult

As India finished at the 100th spot – improving from last year’s 130 – in the World Bank’s Ease of Doing Business rankings for 190 countries that were surveyed, it was only natural for Prime Minister Narendra Modi and finance minister Arun Jaitley to pat their backs on the supposed endorsement of their handling of the country’s economy.

Access the World Bank’s EoDB rankings report here:

http://www.doingbusiness.org/rankings

The EoDB rankings declared on Tuesday are no doubt a shot in the arm for a government that, for a better part of the past year, has been struggling to justify its economic policies and counter growing criticism over a perceived slump in investor sentiment and job creation. Yet, they also portray another reality; one which doesn’t bode well for the Modi government nor justify the premature celebrations over what the Prime Minister termed as a “historic jump”.

For starters, the survey factors in the ease of doing business only in Mumbai and Delhi while Tier I and Tier II cities which are proposed to emerge as the new business centres of India have not been surveyed in the ‘Doing Business 2018: Reforming to Create Jobs’ report that was released on Tuesday by Annexte Dixon, World Bank vice president for the South Asia region. Considering that the national and financial capital are already choked with existing industries and businesses, the exclusion of Tier I and Tier II cities from across the country should in itself be reason enough to not see India’s improved ranking as a comprehensive endorsement of the overall EoDB scenario across the country.

Dixon attributes the “significant jump” in India’s ranking to “the Indian government’s consistent efforts over the past few years and India’s endeavor to strengthen its position as a preferred place to do business”. The report acknowledges improvements in indicators such as resolving insolvency, paying taxes, protecting minority investors and getting credit as the reasons behind the improvement in India’s ranking.

However, the report skips factoring in disruptions caused in businesses and the overall Indian economy due to two of the biggest and most controversial ‘reforms’ rolled out in the country by the Modi government – demonetisation and implementation of the Goods and Services Tax (GST).

While demonetisation, which flushed out 86 per cent of the cash in circulation from the economic in one single stroke and paralysed the economy, especially in the informal sector, for months, was a decision unique to India and so found no mention in the World Bank report, the EoDB survey was completed a month prior to the GST rollout and hence disruptions caused by the new tax regime were also not factored in while deciding India’s ranking.

Economists within India and abroad, as also Opposition leaders, have hit out at the Modi government over the negative impact of demonetisation and the hasty implementation of the GST regime. However, with the two contentious ‘reforms’ finding no mention among the EoDB parameters, it would perhaps not be wholly incorrect to assume that the rankings do not reflect the impact that they have had on businesses in India.

Fine-print of India’s improved EoDB ranking is disturbing, Start Ups faltering

Comparative rankings of India of the current and previous year in the 10 categories on which countries were ranked. Photo credit: Business Line

Another aspect of the report that cannot be brushed aside is the fact that the rankings come as an endorsement of Congress vice president Rahul Gandhi’s charge against the Modi of his government having made it more difficult to start new businesses in India despite the Prime Minister’s pet Start Up India initiative.

Of the 10 broad parameters that the EoDB rankings are based on, three are clearly linked with starting of new business and in each of these parameters, India has slipped from its rankings of the previous year. For instance while on the parameter of ‘starting a business’, the need for Indian entrepreneurs to go through 12 procedures to start a business, as opposed to five in high-income countries, worsened India’s ranking in the category to 156 from 155 last year – out of a total of 190 countries.

A majority of new ventures also need to register their official property that they plan to use as the venue for their business. In the category of ‘Registering property’, India marked its biggest decline, slipping from a rank of 138 last year to 154 in the current year. New ventures also need electricity supply and on that count too, India has slipped although the country’s overall ranking in the category of ‘getting electricity connection’ is better than nearly 70 per cent of the countries that were surveyed. With a 45-day period needed to get a new electricity connection, India ranked 29 in this category as against its previous ranking of 26.

The parameters where the country seems to have done well, marginally or substantially, are all that apply to existing business, be it categories like ‘enforcing contracts’ and ‘resolving insolvency’ or ‘paying taxes’. What the Modi government needs to do, if it really is serious about its Start Up India initiative, is to also make setting up of new business – and not just in Mumbai or Delhi but elsewhere in India too – a much less cumbersome process.[/vc_column_text][/vc_column][/vc_row]

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India and Russia vow to walk together against terrorism, reaffirm strategic partnership

PM Modi and President Putin reaffirm India-Russia unity against terrorism, deepen energy and trade cooperation, and discuss peace efforts amid the Ukraine conflict.

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2 hours ago

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December 5, 2025

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Prime Minister Narendra Modi and Russian President Vladimir Putin on Friday underlined that India and Russia “walk together in the fight against terrorism,” reinforcing a decades-old strategic partnership that remains steady amid global geopolitical churn. The leaders issued the joint statement following talks at Hyderabad House in Delhi, where they also announced steps to boost trade, economic cooperation, and energy collaboration.

India-Russia stand firm on counter-terror cooperation

PM Modi described President Putin as a “dear friend” and highlighted Moscow’s consistent support to India on counter-terror efforts. Russia had earlier strongly condemned the terror attack in Jammu and Kashmir’s Pahalgam, allegedly linked to Pakistan-based Jaish-e-Mohammed, and reiterated solidarity with India’s fight against terrorism in all forms.

The joint remarks emphasized that the bilateral friendship, rooted in trust and mutual respect, has remained resilient for decades despite global challenges.

Focus on energy, trade and use of national currencies

A key highlight of the engagement was Russia reaffirming “uninterrupted shipments” of fuel to India. PM Modi expressed gratitude for Russia’s commitment, noting energy cooperation as a crucial pillar of the relationship. While he did not specifically mention oil purchases, given ongoing Western pressure, he emphasised cooperation in civil nuclear and clean energy.

The two countries also discussed expanding economic ties, including a possible free trade agreement. President Putin said bilateral trade was being targeted to reach USD 100 billion, and acknowledged progress toward using national currencies for payments — a remark expected to draw global attention.

Putin shares peace plan insights on Ukraine conflict

Putin briefed the Prime Minister on Russia’s perspective for a peaceful resolution to the ongoing Ukraine war and appreciated India’s continued role as a “champion of peace.” PM Modi reiterated India’s consistent position on dialogue and diplomacy.

Agreements across jobs, health, shipping and minerals

Officials exchanged multiple agreements covering employment mobility, health, shipping, chemicals and cooperation in critical minerals — further broadening the strategic footprint of the partnership.

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RBI cuts repo rate to 5.25%, paving the way for cheaper loans

The RBI has cut the repo rate to 5.25%, aiming to support growth as inflation softens. The central bank also raised GDP projections and announced liquidity-boosting measures.

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7 hours ago

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December 5, 2025

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Reserve Bank of India

The Reserve Bank of India (RBI) reduced the key repo rate by 25 basis points to 5.25% on Thursday, signalling relief for borrowers as banks are expected to offer lower EMIs on home and vehicle loans. Governor Sanjay Malhotra announced the move after the conclusion of the three-day Monetary Policy Committee (MPC) meeting.

RBI prioritises growth as inflation eases

Malhotra said the decision was unanimous, with the central bank choosing to focus on supporting economic momentum despite concerns over a weak rupee. The repo rate was earlier cut in June from 6% to 5.5% amid easing inflation trends.

The RBI now projects Consumer Price Index (CPI) inflation at 2% for FY2025-26, significantly softer than earlier estimates. For the first quarter of FY2026-27, inflation is expected at 3.9%, lower than the previous projection. The governor noted that rising precious metal prices may contribute to the headline CPI, but overall risks to inflation remain balanced.

GDP outlook strengthened

In a strong upward revision, the central bank increased the GDP forecast for the current financial year to 7.3%, previously estimated at 6.8%. Growth for the October–December quarter has also been revised to 6.7%.

The last quarter registered a six-quarter high expansion of 8.2%, reflecting resilient demand and steady credit flow.

“The growth-inflation balance continues to offer policy space,” Malhotra said, reiterating that the RBI’s stance remains neutral.

Other key decisions

Alongside the repo rate cut, the RBI announced adjustments to key policy corridors:

  • Standing Deposit Facility (SDF): 5%
  • Marginal Standing Facility (MSF): 5.5%

To improve liquidity and strengthen monetary transmission, the RBI will conduct forex swaps and purchase ₹1 lakh crore worth of government bonds through Open Market Operations (OMO).

RBI reviews a challenging year

Reflecting on 2025, Malhotra said the year delivered strong growth and moderate inflation even as global trade and geopolitical uncertainties persisted. He added that bank credit and retail lending remained healthy, providing support to the economy.

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India News

IndiGo flight chaos deepens as over 500 services cancelled, passengers stranded for hours

Over 500 IndiGo flights were cancelled nationwide, leaving passengers stranded without food, clarity or their luggage as airports struggled to manage the disruption.

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7 hours ago

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December 5, 2025

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IndiGo flight

India’s largest airline continued to face massive operational breakdowns, triggering frustration among travellers at major airports across the country. From piles of unattended suitcases to passengers waiting over 12 hours without food or clarity, the disruption stretched into its fourth consecutive day.

Long delays, no communication leave passengers anguished

Several travellers at Delhi airport described the situation as “mental torture”, as thousands of unclaimed suitcases lay scattered across the terminal. Many slept on the floor, while others expressed anger over the lack of communication from airline staff.

One flier said he had been waiting for over 12 hours without any explanation: “Every time they say one-hour or two-hour delays. We were going to a wedding but don’t even have our luggage.”

A passenger in Hyderabad recounted a similar ordeal, saying the flight was delayed indefinitely with no food, water, or updates from the airline. At the airport, some travellers blocked an Air India flight in protest over the lack of arrangements.

Goa and Chennai airports also witnessed tense moments. Videos from Goa showed fliers shouting at IndiGo staff as police attempted to calm the situation. At Chennai, CISF denied entry to IndiGo passengers due to heavy congestion.

Major metro airports impacted; cascading cancellations nationwide

Flight cancellations and delays were reported across multiple airports:

  • Over 200 flights were cancelled in Delhi
  • More than 100 each in Mumbai and Bengaluru
  • Around 90 in Hyderabad
  • Dozens more in Pune, Vishakhapatnam, Chennai and Bhopal

Pune airport stated that parking bay congestion worsened the situation, as several IndiGo aircraft remained grounded due to lack of crew. Other airlines continued operations without disruption.

Airport authorities said they had mobilised additional manpower for crowd control and passenger support.

IndiGo admits planning lapses, says more cancellations expected

The airline acknowledged a “misjudgment” in assessing crew requirements under revised night-duty norms, which it said created planning gaps. Winter weather and airport congestion further aggravated the crisis.

IndiGo informed the aviation ministry and DGCA that some regulatory changes—such as the shift in night-duty timings and a cap on night landings—have been rolled back temporarily to stabilise operations.

The airline warned that cancellations may continue for another two to three days, and from December 8, schedules will be trimmed to prevent further disruption.

In a message to employees, CEO Pieter Elbers said restoring punctuality would not be an “easy target”.

Airline issues apology amid nationwide frustration

In a late-night statement, IndiGo apologised to customers and industry partners, acknowledging the widespread inconvenience caused by the disruptions. The airline said all teams were working with authorities to bring operations back to normal.

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