Even Nepal is better than India!

Doing business in India is much tougher than in Pakistan, China, Sri Lanka and Nepal as the country is positioned way down at 116th in the Ease of Doing Business Ranking of 155 countries surveyed by the World Bank and International Finance Corporation.

Nepal is ranked at 55th, Pakistan at 60th, Bangladesh at 65th, Sri Lanka at 75th and China at 91st in the list.

New Zealand has emerged as the top most country in the ranking, which implies that it is easiest to do business there.

The report "Doing Business in 2006", released on Tuesday, said the largest emerging market economies -- Brazil, India and Indonesia -- have below-average ranks.

Both Brazil and Indonesia are ranked above India at 119th and 115th position respectively.

The complete list of 155 countries

The ranking is based on 10 parameters -- starting a business, dealing with licenses, hiring and firing workers, registering property, getting property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.

It took 11 procedures, 71 days and cost 61.7 per cent of per capita income on an average for starting a business in India in January 2005, according to the report.

In Pakistan also someone starting a business had to face 11 procedures, but it took him 24 days and 18.6 per cent of per capita income to do that, the report said.

Though China had more complex procedures and it took a long time to start a business there, the cost to open a new venture was much less than in India and Pakistan as of January 2005.

Someone starting business in China had to comply with 13 procedures and it took him 48 days on an average to do that in January 2005. However, starting a business cost just 13.6 per cent of per capita income of that country.

One had to face 20 procedures for obtaining a licence and it took him 270 days and money to the tune of 678.5 per cent of per capita income in India in January, 2005. Pakistan is much simpler country in this respect, but much costlier comparatively.

Obtaining a licence will take someone 12 procedures, 218 days and cost him 1,170.7 per cent of per capita income.

In this respect also, China was less costlier but had many more lengthy processes. It takes 126 per cent of per capita income of China for someone to get a licence, but he had to go through 30 processes. Getting a licence on an average took 363 days.

China was more flexible in terms of labour laws than India and Pakistan, but labour there gets more salary than in India.

Difficulty of hiring index was 56 points in India, while rigidity of hours index stood at 40 points. Difficulty of firing index and rigidity of employment index stood at 90 and 62 points, respectively. Hiring cost was 12 per cent of salary, while workers got 79 weeks of salary when fired.

The difficulty of hiring index and rigidity of hours index stood at 67 and 40 points respectively in Pakistan, while the difficulty of firing index and rigidity of employment index was at 30 and 46 points respectively. The hiring cost stood at 12 per cent of salary.

In China hiring cost stood at 30 per cent of salary. The difficulty of hiring index and the rigidity of hours index stood at 11 and 40 points respectively, while the difficulty of firing index and rigidity of employment index were at 40 and 30 points respectively in China.

For registering a property, one had to go through 6 procedures in India, and it took a person 67 days and cost 8.9 per cent of property value. Pakistan is a much simpler country in this respect as registering a property required clearance of 5 procedures, 49 days and cost only 3.2 per cent of property value.

China had easiest rules as one had to comply with 3 procedures and it took a person 32 days and cost 3.1 per cent of property value to register a property. Among the three countries, Pakistan had the highest strength of investor protection index at 6.3 points, compared to 6 in India and 4.3 in China.

One had to shell out least tax in India as a proportion of gross profit compared to China and Pakistan in January, 2005.

Taxes payable constituted 43.2 per cent of gross profit in India, 46.9 per cent in China and 57.4 per cent in Pakistan. It took less number of days to wind up a business in China but it was costlier there than India and Pakistan, the report revealed.