82862 Economy Profile: India Doing Business 2014 India 2 © 2013 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org All rights reserved. 1 2 3 4 15 14 13 12 A copublication of The World Bank and the International Finance Corporation. This work is a product of the staff of The World Bank with external contributions. Note that The World Bank does not necessarily own each component of the content included in the work. The World Bank therefore does not warrant that the use of the content contained in the work will not infringe on the rights of third parties. The risk of claims resulting from such infringement rests solely with you. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. 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Cover design: The Word Express Doing Business 2014 India 3 CONTENTS Introduction .................................................................................................................................. 4 The business environment .......................................................................................................... 5 Starting a business ..................................................................................................................... 14 Dealing with construction permits ........................................................................................... 29 Getting electricity ....................................................................................................................... 42 Registering property .................................................................................................................. 50 Getting credit .............................................................................................................................. 59 Protecting investors ................................................................................................................... 66 Paying taxes ................................................................................................................................ 75 Trading across borders .............................................................................................................. 82 Enforcing contracts .................................................................................................................... 90 Resolving insolvency ................................................................................................................ 101 Employing workers .................................................................................................................. 106 Data notes ................................................................................................................................. 113 Resources on the Doing Business website ............................................................................ 119 Doing Business 2014 India 4 INTRODUCTION Doing Business sheds light on how easy or difficult it is the paying taxes indicators, which cover the period for a local entrepreneur to open and run a small to January–December 2012). medium-size business when complying with relevant The Doing Business methodology has limitations. Other regulations. It measures and tracks changes in areas important to business—such as an economy’s regulations affecting 11 areas in the life cycle of a proximity to large markets, the quality of its business: starting a business, dealing with construction infrastructure services (other than those related to permits, getting electricity, registering property, trading across borders and getting electricity), the getting credit, protecting investors, paying taxes, security of property from theft and looting, the trading across borders, enforcing contracts, resolving transparency of government procurement, insolvency and employing workers. macroeconomic conditions or the underlying strength In a series of annual reports Doing Business presents of institutions—are not directly studied by Doing quantitative indicators on business regulations and the Business. The indicators refer to a specific type of protection of property rights that can be compared business, generally a local limited liability company across 189 economies, from Afghanistan to Zimbabwe, operating in the largest business city. Because over time. The data set covers 47 economies in Sub- standard assumptions are used in the data collection, Saharan Africa, 33 in Latin America and the Caribbean, comparisons and benchmarks are valid across 25 in East Asia and the Pacific, 25 in Eastern Europe economies. The data not only highlight the extent of and Central Asia, 20 in the Middle East and North obstacles to doing business; they also help identify the Africa and 8 in South Asia, as well as 31 OECD high- source of those obstacles, supporting policy makers in income economies. The indicators are used to analyze designing regulatory reform. economic outcomes and identify what reforms have More information is available in the full report. Doing worked, where and why. Business 2014 presents the indicators, analyzes their This economy profile presents the Doing Business relationship with economic outcomes and presents indicators for India. To allow useful comparison, it also business regulatory reforms. The data, along with provides data for other selected economies information on ordering Doing Business 2014, are (comparator economies) for each indicator. The data in available on the Doing Business website at this report are current as of June 1, 2013 (except for http://www.doingbusiness.org. Doing Business 2014 India 5 THE BUSINESS ENVIRONMENT For policy makers trying to improve their economy’s regulatory environment for business, a good place to ECONOMY OVERVIEW start is to find out how it compares with the regulatory environment in other economies. Doing Business provides an aggregate ranking on the ease of doing Region: South Asia business based on indicator sets that measure and benchmark regulations applying to domestic small to Income category: Lower middle income medium-size businesses through their life cycle. Economies are ranked from 1 to 189 by the ease of Population: 1,236,686,732 doing business index. For each economy the index is calculated as the ranking on the simple average of its GNI per capita (US$): 1,530 percentile rankings on each of the 10 topics included in the index in Doing Business 2014: starting a business, DB2014 rank: 134 dealing with construction permits, getting electricity, registering property, getting credit, protecting DB2013 rank: 131* investors, paying taxes, trading across borders, Change in rank: -3 enforcing contracts and resolving insolvency. The ranking on each topic is the simple average of the DB 2014 DTF: 52.74 percentile rankings on its component indicators (see the data notes for more details). The employing workers DB 2013 DTF: 52.26 indicators are not included in this year’s aggregate ease of doing business ranking, but the data are presented Change in DTF: 0.44 in this year’s economy profile. The aggregate ranking on the ease of doing business * DB2013 ranking shown is not last year’s published benchmarks each economy’s performance on the ranking but a comparable ranking for DB2013 that indicators against that of all other economies in the captures the effects of such factors as data Doing Business sample (figure 1.1). While this ranking corrections and the addition of 4 economies (Libya, tells much about the business environment in an Myanmar, San Marino and South Sudan) to the economy, it does not tell the whole story. The ranking on sample this year. See the data notes for sources and the ease of doing business, and the underlying definitions. indicators, do not measure all aspects of the business environment that matter to firms and investors or that affect the competitiveness of the economy. Still, a high ranking does mean that the government has created a regulatory environment conducive to operating a business. Doing Business 2014 India 6 THE BUSINESS ENVIRONMENT Figure 1.1 Where economies stand in the global ranking on the ease of doing business Source: Doing Business database. Doing Business 2014 India 7 THE BUSINESS ENVIRONMENT For policy makers, knowing where their economy relative to the regional average (figure 1.2). The stands in the aggregate ranking on the ease of economy’s rankings on the topics included in the doing business is useful. Also useful is to know how ease of doing business index provide another it ranks relative to comparator economies and perspective (figure 1.3). Figure 1.2 How India and comparator economies rank on the ease of doing business Source: Doing Business database. Doing Business 2014 India 8 THE BUSINESS ENVIRONMENT Figure 1.3 How India ranks on Doing Business topics Source: Doing Business database. Doing Business 2014 India 9 THE BUSINESS ENVIRONMENT Just as the overall ranking on the ease of doing business Doing Business introduced the distance to frontier tells only part of the story, so do changes in that ranking. measure. This measure shows how far on average an Yearly movements in rankings can provide some indication economy is from the best performance achieved by any of changes in an economy’s regulatory environment for economy on each Doing Business indicator since 2005, firms, but they are always relative. except for the getting electricity indicators, which were introduced in 2009. Moreover, year-to-year changes in the overall rankings do not reflect how the business regulatory environment in an Comparing the measure for an economy at 2 points in economy has changed over time—or how it has changed time allows users to assess how much the economy’s in different areas. To aid in assessing such changes, regulatory environment as measured by Doing Business has changed over time—how far it has moved toward (or away from) the most efficient practices and strongest regulations in areas covered by Doing Business (figure 1.4). Figure 1.4 How far has India come in the areas measured by Doing Business? Note: The distance to frontier measure shows how far on average an economy is from the best performance achieved by any economy on each Doing Business indicator since 2005, except for the getting electricity indicators, which were introduced in 2009. The measure is normalized to range between 0 and 100, with 100 representing the best performance (the frontier). The overall distance to frontier is the average of the distance to frontier in the first 9 indicator sets shown in the figure and does not include getting electricity. Data on the overall distance to frontier including getting electricity is available at http://www.doingbusiness.org/data/distance-to-frontier. See the data notes for more details on the distance to frontier measure. Source: Doing Business database. Doing Business 2014 India 10 THE BUSINESS ENVIRONMENT The absolute values of the indicators tell another part business regulation—such as a regulatory process that of the story (table 1.1). The indicators, on their own or can be completed with a small number of procedures in comparison with the indicators of a good practice in a few days and at a low cost. Comparison of the economy or those of comparator economies in the economy’s indicators today with those in the previous region, may reveal bottlenecks reflected in large year may show where substantial bottlenecks persist — numbers of procedures, long delays or high costs. Or and where they are diminishing. they may reveal unexpected strengths in an area of Table 1.1 Summary of Doing Business indicators for India Best performer globally Russian Federation Indonesia DB2014 Mexico DB2014 Indicator Japan DB2014 China DB2014 Brazil DB2014 India DB2014 India DB2013 DB2014 DB2014 Starting a Business 179 177 123 158 175 120 48 88 New Zealand (1) (rank) Procedures (number) 12 12 13 13 10 8 6 7 New Zealand (1)* Time (days) 27.0 27.0 107.5 33.0 48.0 22.0 6.0 15.0 New Zealand (0.5) Cost (% of income per 47.3 49.8 4.6 2.0 20.5 7.5 19.7 1.3 Slovenia (0.0) capita) Paid-in Min. Capital (% 124.4 140.1 0.0 78.2 38.5 0.0 0.0 1.2 112 Economies (0.0)* of income per capita) Dealing with Hong Kong SAR, Construction Permits 182 183 130 185 88 91 40 178 China (1) (rank) Hong Kong SAR, Procedures (number) 35 35 15 25 13 14 11 36 China (6) Time (days) 168.0 168.0 400.0 270.0 158.0 193.0 82.0 297.0 Singapore (26.0) Doing Business 2014 India 11 Best performer globally Russian Federation Indonesia DB2014 Mexico DB2014 Indicator Japan DB2014 China DB2014 Brazil DB2014 India DB2014 India DB2013 DB2014 DB2014 Cost (% of income per 2,640.4 2,973.4 34.8 344.7 87.2 28.1 353.1 89.0 Qatar (1.1) capita) Getting Electricity 111 110 14 119 121 26 133 117 Iceland (1) (rank) Procedures (number) 7 7 4 5 6 3 7 5 10 Economies (3)* Time (days) 67 67 58 145 101 105 85 162 Germany (17) Cost (% of income per 230.7 247.3 34.4 499.2 370.6 0.0 369.1 293.8 Japan (0.0) capita) Registering Property 92 91 107 48 101 66 150 17 Georgia (1) (rank) Procedures (number) 5 5 14 4 6 6 7 4 4 Economies (1)* Time (days) 44.0 44.0 30.0 29.0 22.0 13.0 74.0 22.0 New Zealand (1.0)* Cost (% of property 7.0 7.1 2.6 3.6 10.9 5.8 5.3 0.1 5 Economies (0.0)* value) Getting Credit (rank) 28 24 109 73 86 28 42 109 Malaysia (1)* Strength of legal rights 8 8 3 5 5 7 6 3 10 Economies (10)* index (0-10) Depth of credit 5 5 5 5 4 6 6 5 31 Economies (6)* information index (0-6) Public registry coverage 0.0 0.0 50.4 30.2 41.2 0.0 0.0 0.0 Portugal (100.0)* (% of adults) Private bureau 19.8 14.9 63.4 0.0 0.0 100.0 100.0 59.2 22 Economies (100.0)* coverage (% of adults) Protecting Investors 34 32 80 98 52 16 68 115 New Zealand (1) (rank) Extent of disclosure 7 7 5 10 10 7 8 6 10 Economies (10)* Doing Business 2014 India 12 Best performer globally Russian Federation Indonesia DB2014 Mexico DB2014 Indicator Japan DB2014 China DB2014 Brazil DB2014 India DB2014 India DB2013 DB2014 DB2014 index (0-10) Extent of director 4 4 8 1 5 6 5 2 Cambodia (10) liability index (0-10) Ease of shareholder 8 8 3 4 3 8 4 6 3 Economies (10)* suits index (0-10) Strength of investor 6.3 6.3 5.3 5.0 6.0 7.0 5.7 4.7 New Zealand (9.7) protection index (0-10) United Arab Emirates Paying Taxes (rank) 158 159 159 120 137 140 118 56 (1) Payments (number per Hong Kong SAR, 33 33 9 7 52 14 6 7 year) China (3)* United Arab Emirates Time (hours per year) 243 243 2,600 318 259 330 334 177 (12) Trading Across Borders 132 129 124 74 54 23 59 157 Singapore (1) (rank) Documents to export 9 9 6 8 4 3 4 9 Ireland (2)* (number) Time to export (days) 16 16 13 21 17 11 11 22 5 Economies (6)* Cost to export (US$ per 1,170 1,120 2,215 620 615 890 1,450 2,615 Malaysia (450) container) Documents to import 11 11 8 5 8 5 4 10 Ireland (2)* (number) Time to import (days) 20 20 17 24 23 11 11 21 Singapore (4) Cost to import (US$ per 1,250 1,200 2,275 615 660 970 1,740 2,810 Singapore (440) container) Enforcing Contracts 186 186 121 19 147 36 71 10 Luxembourg (1) (rank) Doing Business 2014 India 13 Best performer globally Russian Federation Indonesia DB2014 Mexico DB2014 Indicator Japan DB2014 China DB2014 Brazil DB2014 India DB2014 India DB2013 DB2014 DB2014 Time (days) 1,420 1,420 731 406 498 360 400 270 Singapore (150) Cost (% of claim) 39.6 39.6 16.5 11.1 139.4 32.2 31.0 13.4 Bhutan (0.1) Procedures (number) 46 46 44 37 40 31 38 36 Singapore (21)* Resolving Insolvency 121 119 135 78 144 1 26 55 Japan (1) (rank) Time (years) 4.3 4.3 4.0 1.7 4.5 0.6 1.8 2.0 Ireland (0.4) Cost (% of estate) 9 9 12 22 18 4 18 9 Norway (1) Outcome (0 as piecemeal sale and 1 as 0 0 1 0 0 1 1 0 going concern) Recovery rate (cents on 25.6 26.0 19.5 36.0 17.9 92.8 67.6 42.8 Japan (92.8) the dollar) Note: DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB2013 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. For more information on “no practice” marks, see the data notes. * Two or more economies share the top ranking on this indicator. A number shown in place of an economy’s name indicates the number of economies that share the top ranking on the indicator. For a list of these economies, see the Doing Business website (http://www.doingbusiness.org). Source: Doing Business database. Doing Business 2014 India 14 STARTING A BUSINESS Formal registration of companies has many WHAT THE STARTING A BUSINESS immediate benefits for the companies and for business owners and employees. Legal entities can INDICATORS MEASURE outlive their founders. Resources are pooled as several shareholders join forces to start a company. Procedures to legally start and operate a Formally registered companies have access to company (number) services and institutions from courts to banks as Preregistration (for example, name well as to new markets. And their employees can verification or reservation, notarization) benefit from protections provided by the law. An additional benefit comes with limited liability Registration in the economy’s largest companies. These limit the financial liability of business city company owners to their investments, so personal Postregistration (for example, social security assets of the owners are not put at risk. Where registration, company seal) governments make registration easy, more entrepreneurs start businesses in the formal sector, Time required to complete each procedure creating more good jobs and generating more (calendar days) revenue for the government. Does not include time spent gathering What do the indicators cover? information Doing Business measures the ease of starting a Each procedure starts on a separate day (2 business in an economy by recording all procedures cannot start on the same day). procedures officially required or commonly done in Procedures that can be fully completed practice by an entrepreneur to start up and online are an exception to this rule. formally operate an industrial or commercial Procedure completed once final document is business—as well as the time and cost required to received complete these procedures. It also records the paid-in minimum capital that companies must No prior contact with officials deposit before registration (or within 3 months). Cost required to complete each procedure The ranking on the ease of starting a business is (% of income per capita) the simple average of the percentile rankings on the 4 component indicators: procedures, time, cost Official costs only, no bribes and paid-in minimum capital requirement. No professional fees unless services required To make the data comparable across economies, by law Doing Business uses several assumptions about the Paid-in minimum capital (% of income business and the procedures. It assumes that all per capita) information is readily available to the entrepreneur and that there has been no prior contact with Deposited in a bank or with a notary before officials. It also assumes that the entrepreneur will registration (or within 3 months) pay no bribes. And it assumes that the business:  Has a start-up capital of 10 times income per  Is a limited liability company, located in the capita. largest business city and is 100% domestically  Has a turnover of at least 100 times income per owned. capita.  Has between 10 and 50 employees.  Does not qualify for any special benefits.  Conducts general commercial or industrial  Does not own real estate. activities. Doing Business 2014 India 15 STARTING A BUSINESS Where does the economy stand today? What does it take to start a business in India? days, costs 47.3% of income per capita and requires According to data collected by Doing Business, starting paid-in minimum capital of 124.4% of income per a business there requires 12 procedures, takes 27.0 capita (figure 2.1). Figure 2.1 What it takes to start a business in India Paid-in minimum capital (% of income per capita): 124.4 Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the total time calculation. For more information on the methodology of the starting a business indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database. Doing Business 2014 India 16 STARTING A BUSINESS Globally, India stands at 179 in the ranking of 189 regional average ranking provide other useful economies on the ease of starting a business (figure information for assessing how easy it is for an 2.2). The rankings for comparator economies and the entrepreneur in India to start a business. Figure 2.2 How India and comparator economies rank on the ease of starting a business Source: Doing Business database. Doing Business 2014 India 17 STARTING A BUSINESS What are the changes over time? The benchmarks provided by the economies that over 2.3) can help show what is possible in making it easier time have had the best performance regionally or to start a business. And changes in regional averages globally on the procedures, time, cost or paid-in can show where India is keeping up—and where it is minimum capital required to start a business (figure falling behind. Figure 2.3 Has starting a business become easier over time? Procedures (number) Time (days) Doing Business 2014 India 18 STARTING A BUSINESS Cost (% of income per capita) Paid-in minimum capital (% of income per capita) Note: Ninety economies globally have no paid-in minimum capital requirement. DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB2013 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. Source: Doing Business database. Doing Business 2014 India 19 STARTING A BUSINESS Economies around the world have taken steps making greater firm satisfaction and savings and more it easier to start a business—streamlining procedures registered businesses, financial resources and job by setting up a one-stop shop, making procedures opportunities. simpler or faster by introducing technology and What business registration reforms has Doing Business reducing or eliminating minimum capital requirements. recorded in India (table 2.1)? Many have undertaken business registration reforms in stages—and they often are part of a larger regulatory reform program. Among the benefits have been Table 2.1 How has India made starting a business easier—or not? By Doing Business report year DB year Reform DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. India eased business start-up by establishing an online VAT DB2011 registration system and replacing the physical stamp previously required with an online version. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2014 India 20 STARTING A BUSINESS What are the details? Underlying the indicators shown in this chapter for STANDARDIZED COMPANY India is a set of specific procedures—the bureaucratic and legal steps that an entrepreneur must complete to incorporate and register a new City: Mumbai firm. These are identified by Doing Business through collaboration with relevant local Legal Form: Private Limited Company professionals and the study of laws, regulations and Paid in Minimum Capital Requirement: INR publicly available information on business entry in 100,000 that economy. Following is a detailed summary of those procedures, along with the associated time Start-up Capital: 10 times GNI per capita and cost. These procedures are those that apply to a company matching the standard assumptions (the “standardized company”) used by Doing Business in collecting the data (see the section in this chapter on what the indicators measure). Summary of procedures for starting a business in India—and the time and cost Time to No. Procedure Cost to complete complete Obtain director identification number (DIN) online By a notification dated 27 March, 2011, the Ministry of Corporate Affairs (MCA) has revised the process for obtaining a Director Identification Number (DIN). Currently the process for obtaining DIN is as follows: 1) e-Form DIN-1 has to be submitted along with photograph and scanned copy of supporting documents i.e. proof of identity, and proof of residence as per the guidelines. 2) Along with the supporting documents, the applicant has to attach a document (Affidavit) which contains the applicant's name, middle name, date of birth, text as specified and the physical signature of the applicant. The Affidavit has to be executed on non-judicial stamp paper and should be duly notarized. 3) The eForm has to be digitally signed and uploaded on MCA21 portal after which the fees for the same is paid. 1 day INR 100 1 4) In case Form DIN 1 is signed by a practicing professional (i.e. Chartered Accountant/ Company Secretary/ Cost and Works Accountant) and details have not been identified as potential duplicate, approved DIN is generated and if the details have been identified as potential duplicate, Provisional DIN is generated. 5) In the event of Form DIN 1 being signed by an applicant or by the Managing Director/ existing director of the company in which the applicant is a Director or the Company Secretary in full time employment of the company, or if the provided details are identified as a potential duplicate, a provisional DIN is generated. 6) In case, DIN 1 gets certified by a practicing professional (i.e. Chartered Accountant/ Company Secretary/ Cost and Works Accountant in whole time practice), the DIN will be approved by the system immediately online (in case it is not potential duplicate). 7) In case DIN 1 is signed by any other signatory (i.e. director/ Doing Business 2014 India 21 Time to No. Procedure Cost to complete complete Managing Director/ Company Secretary of the company with which applicant is to be associated), the MCA DIN cell will examine the eForm DIN 1 and will approve the same within one or two days. Scanned documents to be submitted: • Photograph of the applicant; • Proof of identity; • Proof of residence; • Proof of date of birth; • Proof of father’s name. (Proof of father’s name is not required in the case of foreign nationals) Identity Proof: The identity proof (issued by the Central or the State Government or an instrumentality of the State) must contain the following information: • Applicant's name with photograph; • Father's name; • Date of birth. Obtain digital signature certificate online To use the new electronic filing system under MCA 21, the applicant must obtain a Class-II Digital Signature Certificate. The digital signature certificate can be obtained from one of six private agencies authorized by MCA 21 such as Tata Consultancy Services, NIC, E-Mudhra, MTNL Trust line. Company directors submit the prescribed application form along with proof of identity and address. Each agency has its own fee INR 400 to INR 2 structure, ranging from INR 400 to INR 2650. 1 day 2,650 There are total seven Certification Agencies authorized by the Controller of Certification Agencies to issue the Digital Signature Certificates. The details of these Certification Agencies are available on the portal of the Ministry of Corporate Affairs (www.mca.gov.in). Reserve the company name with the Registrar of Companies (ROC) online The guidelines briefly list out the conditions and norms that must be fulfilled while a name is selected for a company. Names that are offensive or are similar to already existing names would not be registered. The Name Availability Guidelines prescribe a time period of 2 days INR 1000 3 one to two days for registering the name of a company, however, due to the large number of applications received, typically this process takes up to 3 days, and is as follows: 1. Check availability of the proposed name by checking on the MCA21 portal for other companies or LLPs having similar names. Alternatively, engage a professional (practicing chartered accountant, company Doing Business 2014 India 22 Time to No. Procedure Cost to complete complete secretary or cost accountant) to perform the check on the MCA 21 portal and provide a search report which can be attached to the application. 2. Prepare the application in eForm 1A with all relevant details and declarations. If a professional has been engaged to check availability of name, have the professional certify and digitally sign the eForm 1A. 3. Upload the eForm 1A to the MCA 21 portal and pay fees of Rs. 1000 electronically (net banking or credit card). 4. If the e-Form 1A has been certified by a professional (as described above), the proposed name will be made available to the applicant online, without any backend processing, provided the name is not similar to any existing trademark, any of the words proposed in the company's name does not exactly match any existing company's name and the name does not consist of a single word (other than private limited). If the e-Form 1A is not certified by a professional or if any of these provisos are not satisfied, the proposed name will be processed by the Registrar of Companies and availability or non-availability of name will be communicated to the applicant. 5. The name, if made available to the applicant, will be reserved for the applicant to use for 60 days from the date of approval. If the proposed company is not incorporated during this 60 day period, the approval will lapse and the name will be available to other applicants. This is in accordance with the Name Availability Guidelines 2011, General Circular No. 7/2012 dated 25th April 2012 issued by Ministry of Corporate Affairs, Government of India. The fee for registering the name of a company is INR 1000. Pay stamp duties online, file all incorporation forms and documents online and obtain the certificate of incorporation As a result of MCA's desire to further the e-governance's initiatives, as of January 1, 2010 it has been made compulsory to pay all stamp duties on incorporation documents online through the Ministry of Corporate Affairs (MCA) website. As a result of these reforms, the mode of payment of stamp duty through affixation of adhesive stamps on Articles of Association and Memorandum of Association has been replaced by the e-payment of applicable stamp duty on Articles and 4 Memorandum of association through MCA portal. Moreover, certain 3-7 days INR 24,800 forms: Form 1 (a primary form used in the incorporation process), Form 5 & Form 44 will also be stamped electronically through MCA Portal. The reforms also provide that the documents on which e-stamping has been done, need not to be filed physically: electronic filing of the same would be sufficient. For registration, the following forms are required to be electronically filed on the website of the Ministry of Company Affairs: (a) e-form 1; (b) e-form 18; (c) e-form 32 Doing Business 2014 India 23 Time to No. Procedure Cost to complete complete Along with these documents, scanned copies of the signed and the Memorandum and Articles of Association, must be attached to Form 1. Proof of location Registered Office in the Form of Lease Deed or NOC from the Owner must be attached to Form 18. The 3 forms as well as the memorandum and articles of association must be certified by a practicing professional regarding the correctness of the information/declarations. - The fees for registering a company can be paid online using a credit card or by payment in cash at certain authorized banks. - The certificate of incorporation is immediately issued by the Registrar of Companies, signed digitally and sent via email to the Company. The registration fees paid to the Registrar are scaled according to the company’s authorized capital (as stated in its memorandum): - INR 100,000 or less: INR 4,000. If the nominal share capital is over INR 100,000, additional fees based on the amount of nominal capital apply to the base registration fee of INR 4,000: - For every INR 10,000 of nominal share capital or part of INR 10,000 after the first INR 100,000, up to INR 500,000: INR 300. - For every INR 10,000 of nominal share capital or part of INR 10,000 after the first INR 500,000, up to INR 5,000,000: INR 200. - For every INR 10,000 of nominal share capital or part of INR 10,000 after the first INR 5,000,000, up to INR 10,000,000: INR 100. - For every INR 10,000 of nominal share capital or part of INR 10,000 after the first INR 10,000,000: INR 50. The payment of fees has to be done online; the applicant makes the payment through credit cards and the system accepts the documents immediately. Please note that in Mumbai, RoC requests for pre-scrutiny of documents for any correction thereon, before the documents are uploaded, so that once the documents have been uploaded, it can be approved without any further correction. The online filing mechanism requires only one copy of scanned documents to be filed (including stamped MOA, AOA, and POA). Schedule of Registrar filing fees for the articles and for the other forms (l, 18, and 32): - INR 200 for a company with authorized share capital of more than INR 100,000 but less than INR 500,000. - INR 300 for a company with nominal share capital of INR 500,000 or more but less than INR 2,500,000. - INR 500 for a company with nominal share capital of INR 2,500,000 or more. According to Maharashtra Stamp Act, 1958, the stamp duty payable on the memorandum and articles of association for company incorporation in Mumbai, Maharashtra, is as follows: - Articles of association: INR 1000/- for every INR 500,000/- of share capital (or part thereof), subject to a maximum of INR 5,000,000. - Memorandum of association: INR 200. - Form-1 (declaration of compliance): INR 100. Doing Business 2014 India 24 Time to No. Procedure Cost to complete complete Make a seal Although making a seal is not a legal requirement for the company to 5 be incorporated, companies require a company seal to issue share 1 day INR 350 certificates and other documents. Visit an authorized franchise or agent appointed by National Securities Depository Services Limited (NSDL) or Unit Trust of India (UTI) Investors Services Ltd to obtain a Permanent Account Number (PAN) Under the Income Tax Act, 1961, each person must quote his or her permanent account number (PAN) for tax payment purposes and the tax deduction and collection account number (TAN) for depositing tax deducted at source. The Central Board of Direct Taxes (CBDT) has instructed banks not to accept any form for tax payment (Chalan) without the PAN or TAN, as applicable. The PAN is a 10-digit alphanumeric number issued on a laminated card by an assessing officer of the Income Tax Department. In order to improve PAN related services, the Income Tax department (effective July 2003) outsourced their operations pertaining to allotment of PAN and issue of PAN cards to UTI Investor Services Ltd, which was authorized to set up and manage IT PAN Service Centers in all cities where there is an Income Tax office. INR 85 for Fee and INR 5 for 6 The National Securities Depository Limited (NSDL) has also launched 7 days Application Form, PAN operations effective June 2004, setting up TIN Facilitation Centers. (if not downloaded) The PAN application is made through the above mentioned service centers on Form 49A, with a certified copy of the certificate of registration, issued by the Registrar of Companies, along with proof of company address and personal identity. A fee of INR 85 (plus applicable taxes currently at 12.36%) applies for processing the PAN application. IT PAN Service Centers or TIN Facilitation Centers will supply PAN application forms (Form 49A), assist the applicant in filling up the form, collect filled form and issue acknowledgement slip. After obtaining PAN from the Income Tax department, UTIISL or NSDL as the case may be, will print the PAN card and deliver it to the applicant. The application for PAN can also be made online but the documents still need to be physically dropped off for verification with the authorized agent. For more details (www.incometaxindia.gov.in , www.utiisl.co.in , www.tin-nsdl.com) Doing Business 2014 India 25 Time to No. Procedure Cost to complete complete * Obtain a tax account number for income taxes deducted at source from the Assessing Office in the Mumbai Income Tax Department The tax deduction and collection account number (TAN) is a 10-digit alphanumeric number required by all persons responsible for deducting or collecting tax. The provisions of Section 203A of the Income Tax Act require that all persons who deduct or collect tax at the source must apply for a TAN. The section also makes it mandatory for the TAN to be quoted in all tax-deducted-at-source (TDS) and tax-collected-at-source (TCS) returns, all TDS/TCS payment Chalans, and all TDS/TCS certificates issued. Failure to apply for a TAN or to comply with any of the other provisions of the section is subject to a penalty of INR 10,000/- . The application for allotment of a TAN must be filed using Form 49B 7 days, and submitted at any TIN Facilitation Center authorized to receive e- simultaneous with 7 TDS returns. Locations of TIN Facilitation Centers are at INR 55 previous www.incometaxindia.gov.in and tin.nsdl.com. The processing fee for procedure both applications (a new TAN or a change request) is INR 55 (plus applicable taxes - currently at 12.36%). After verification of application, the same is sent to Income Tax Department and upon satisfaction the department issues the TAN to the applicant. The national government levies the income tax. Since outsourcing, any authorized franchise or agent appointed by National Securities Depository Services Limited (NSDL) can accept and process the TAN application. The application for TAN can be made either online TAN can be through the NSDL website www.tin-nsdl.com or offline. However, after the payment of the fee by credit card, the hard copy of the application must be physically filed with NSDL. * Register with Office of Inspector, Mumbai Shops and Establishment Act A statement containing the employer’s and manager’s name and the establishment’s name (if any), postal address, and category must be INR 2,400 sent to the local shop inspector with the applicable fees. 2 days, (registration fee) + simultaneous with 3 times registration 8 According to Section 7 of the Bombay Shops and Establishments Act, previous fee for Trade 1948, the establishment must be registered as follows: procedure Refuse Charges - Under Section 7(4), the employer must register the establishment in (INR 7,200) the prescribed manner within 30 days of the date on which the establishment commences its work. - Under Section 7(1), the establishment must submit to the local shop inspector Form A and the prescribed fees for registering the establishment. Doing Business 2014 India 26 Time to No. Procedure Cost to complete complete - Under Section 7(2), after the statement in Form A and the prescribed fees are received and the correctness of the statement is satisfactorily audited, the certificate for the registration of the establishment is issued in Form D, according to the provisions of Rule 6 of the Maharashtra Shops and Establishments Rules of 1961. Since the amendments in the Maharashtra Shops & Establishment (Amendment) Rules, 2003 dated 15th December 2003, the Schedule for fees for registration & renewal of registration (as per Rule 5) is as follows: 0 employees: INR 120 1 to 5 employees: INR 360 6 to10 employees: INR 720 11 to 20 employees: INR 1200 21 to 50 employees: INR 2400 51 to 100 employees: INR 4200 101 or more: INR 5400. Hence in the given case the registration fees would be INR 2400, as there are 50 employees. In addition, an annual fee (three times the registration and renewal fees) is charged as trade refuse charges (TRC), under the Mumbai Municipal Corporation Act, 1888. * Register for VAT online VAT online registration was introduced by the Commissioner of Sales Tax, Maharashtra State, Mumbai, Trade Circular No. 4T of 2009, dated January 23, 2009. According to Notification No. VAT/AMD-1009/ IB/Adm-6, dated 26th August 2009, application for registration of VAT by the founders who are required to obtain registration or those who voluntarily desire to get registration can be, as of 1st October 2009, filed electronically on the website www.mahavat.gov.in. After the completed application form is submitted online, an acknowledgment containing the date and time for attending before the INR 500 registering authority along with code/designation and address of 10 days, (Registration Fee) + registering authority is generated. The company should print a copy of simultaneous with INR 25 (Stamp 9 the completed e-application and submit it along with the previous Duty) for acknowledgement to the registration authority for verification and procedure compulsory VAT photo attestation on a given date and time along with relevant registration documents. If the application is correct and complete in all respect along with relevant documents then the registering authority will generate TIN after verification of the documents. Registration certificate will be printed and issued to the company on the appointed date. Usually, the appointment date is scheduled in the next 10 days. Other accompanying documentation includes: - Certified true copy of the memorandum and articles of association of the company. - Proof of permanent residential address. At least 2 of the following Doing Business 2014 India 27 Time to No. Procedure Cost to complete complete documents must be submitted: copy of passport, copy of driving license, copy of election photo identity card, copy of property card or latest receipt of property tax of Municipal Corporation, copy of latest paid electricity bill in the name of the applicant. - Proof of place of business (for an owner, the case of Doing Business): Proof of ownership of premises or lease agreement or any other relevant documents - One recent passport size photograph of the applicant - Copy of Income Tax Assessment Order having PAN or copy of PAN card - Chalan in Form No. 210 (original) showing payment of registration fee at INR 5000/in case of voluntary RC and INR 500/in other cases * Register for profession tax Profession Tax online registration was introduced by the Commissioner of Sales Tax (Profession Tax), Maharashtra State, Mumbai vide Notification No. PFT2012/NTF 15/Adm-20, dated 19 March 2012. As of April 2012, all applications for registration (i.e. for obtaining a Profession Tax Registration Certificate) are required to be made online, on the website of www.mahavat.gov.in, in 'Form I'. In addition, the employer must obtain a certificate of enrolment under section 5(2) of the Profession tax Act; thus, the company is required to submit Form II. 2 days, The form I and II are submitted simultaneously to the registering simultaneous with 10 authority's online portal. no charge with previous procedure According to section 5 of the Profession Tax Act, every employer (not being an officer of the government is liable to pay tax and shall obtain a certificate of registration from the prescribed authority. Depending on the nature of the business, the application should be supported with such documents as address proof, details of company registration number under Indian Companies Act (1956), details of head office (if the company is a branch of company registered outside the state), company deed, certificates under any other act, and so forth. * Register with Employees' Provident Fund Organization The Employees Provident Funds & Miscellaneous Provisions Act, 1952 applies to an establishment, employing 20 or more persons and 12 days, engaged in any of the 183 Industries and Classes of business simultaneous with 11 no charge establishments, throughout India excluding the State of Jammu and with previous Kashmir. The Provident Fund registration focuses on delinquent procedure reporting, underreporting, or non-reporting of workforce size. Provident Fund registration is optional if workforce size is not more than 20. Doing Business 2014 India 28 Time to No. Procedure Cost to complete complete As of April 2012, all employers must register online with the EPFO online portal in order to generate challans for making any remittances (www.epfindia.gov.in). Filing of Electronic Challan cum Return (ECR) and deposit of contributions are also done online through the same website. Along with the information regarding the employees to be provided by the employer for registration, it has been made mandatory to submit the AADHAAR (unique identification) details of employees. All eligible employees are required to become members of the Fund and individual account number is allotted by the employer in prescribed manner. * Register for medical insurance (ESIC) Registration is the process by which every employer/factory and every employee employed for wages are identified for the purpose of the medical insurance scheme and their individual records are set up for them. As per the Employees' State Insurance (General), Form 01 is the form required to be submitted by Employer for registration. It takes 3 days to a week for the Employer Code Number to be issued. The "intimation letter" containing the Code Number is sent by post to the employer and that takes an additional couple of days. The Employee’s individual insurance is a separate process and occurs after Employer’s registration. The Employer is responsible for submitting the required Declaration Form and employees are responsible for providing correct information to the employer. The 9 day, employee temporary cards (ESI Cards) are issued on the spot by the simultaneous with 12 no charge local offices in many places. The temporary cards are valid for 13 weeks with previous from the date of appointment of the employees. It takes about 4 to 5 procedure weeks to get a permanent ESI card. In order to insure that all the insured persons receive their identity cards to enable them to receive cash and medical benefit, the identity cards will be delivered to the insured persons directly by the ESI Corporation rather than through the employers. The ESI Act applies to all establishments employing 20 or more persons. The ESI Act provides for sickness benefits, medical relief, maternity benefits for women workers, compensation for fatal and other employment injuries, etc. Every employee who receives wages up to Rs. 15,000 per month is covered by this Act. Employers can now submit application online for registration under ESI Act on the ESIC website (www.esic.in). * Takes place simultaneously with another procedure. Note: Online procedures account for 0.5 days in the total time calculation. Source: Doing Business database. Doing Business 2014 India 29 DEALING WITH CONSTRUCTION PERMITS Regulation of construction is critical to protect the WHAT THE DEALING WITH CONSTRUCTION public. But it needs to be efficient, to avoid PERMITS INDICATORS MEASURE excessive constraints on a sector that plays an important part in every economy. Where complying with building regulations is excessively costly in Procedures to legally build a warehouse time and money, many builders opt out. They may (number) pay bribes to pass inspections or simply build Submitting all relevant documents and illegally, leading to hazardous construction that obtaining all necessary clearances, licenses, puts public safety at risk. Where compliance is permits and certificates simple, straightforward and inexpensive, everyone Submitting all required notifications and is better off. receiving all necessary inspections What do the indicators cover? Obtaining utility connections for water, Doing Business records the procedures, time and sewerage and a land telephone line cost for a business in the construction industry to Registering the warehouse after its obtain all the necessary approvals to build a completion (if required for use as collateral or warehouse in the economy’s largest business city, for transfer of the warehouse) connect it to basic utilities and register the Time required to complete each procedure property so that it can be used as collateral or (calendar days) transferred to another entity. Does not include time spent gathering The ranking on the ease of dealing with information construction permits is the simple average of the Each procedure starts on a separate day. percentile rankings on its component indicators: Procedures that can be fully completed online procedures, time and cost. are an exception to this rule. To make the data comparable across economies, Procedure considered completed once final Doing Business uses several assumptions about the document is received business and the warehouse, including the utility connections. No prior contact with officials The business: Cost required to complete each procedure (% of income per capita)  Is a limited liability company operating in Official costs only, no bribes the construction business and located in the largest business city.  Will be connected to water, sewerage (sewage system, septic tank or their  Is domestically owned and operated. equivalent) and a fixed telephone line. The  Has 60 builders and other employees. connection to each utility network will be 10 The warehouse: meters (32 feet, 10 inches) long.  Is a new construction (there was no  Will be used for general storage, such as of previous construction on the land). books or stationery (not for goods requiring special conditions).  Has complete architectural and technical plans prepared by a licensed architect or  Will take 30 weeks to construct (excluding all engineer. delays due to administrative and regulatory requirements). Doing Business 2014 India 30 DEALING WITH CONSTRUCTION PERMITS Where does the economy stand today? What does it take to comply with the formalities to permits there requires 35 procedures, takes 168.0 days build a warehouse in India? According to data and costs 2640.4% of income per capita (figure 3.1). collected by Doing Business, dealing with construction Figure 3.1 What it takes to comply with formalities to build a warehouse in India Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the total time calculation. For more information on the methodology of the dealing with construction permits indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database. Doing Business 2014 India 31 DEALING WITH CONSTRUCTION PERMITS Globally, India stands at 182 in the ranking of 189 economies and the regional average ranking provide economies on the ease of dealing with construction other useful information for assessing how easy it is for permits (figure 3.2). The rankings for comparator an entrepreneur in India to legally build a warehouse. Figure 3.2 How India and comparator economies rank on the ease of dealing with construction permits Source: Doing Business database. Doing Business 2014 India 32 DEALING WITH CONSTRUCTION PERMITS What are the changes over time? The benchmarks provided by the economies that over what is possible in making it easier to deal with time have had the best performance regionally or construction permits. And changes in regional globally on the procedures, time or cost required to averages can show where India is keeping up—and deal with construction permits (figure 3.3) help show where it is falling behind. Figure 3.3 Has dealing with construction permits become easier over time? Procedures (number) Time (days) Doing Business 2014 India 33 DEALING WITH CONSTRUCTION PERMITS Cost (% of income per capita) Note: DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB2013 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. For more information on “no practice” marks, see the data notes. Source: Doing Business database. Doing Business 2014 India 34 DEALING WITH CONSTRUCTION PERMITS Smart regulation ensures that standards are met while building safety while keeping compliance costs making compliance easy and accessible to all. reasonable, governments around the world have Coherent and transparent rules, efficient processes and worked on consolidating permitting requirements. adequate allocation of resources are especially What construction permitting reforms has Doing important in sectors where safety is at stake. Business recorded in India (table 3.1)? Construction is one of them. In an effort to ensure Table 3.1 How has India made dealing with construction permits easier—or not? By Doing Business report year DB year Reform DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. India reduced the time required to obtain a building permit by DB2013 establishing strict time limits for preconstruction approvals. DB2014 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2014 India 35 DEALING WITH CONSTRUCTION PERMITS What are the details? The indicators reported here for India are based on BUILDING A WAREHOUSE a set of specific procedures—the steps that a company must complete to legally build a warehouse—identified by Doing Business through City : Mumbai information collected from experts in construction licensing, including architects, civil engineers, Estimated construction lawyers, construction firms, utility INR 5,203,000 Warehouse Value : service providers and public officials who deal with building regulations. These procedures are those The procedures, along with the associated time and that apply to a company and structure matching cost, are summarized below. the standard assumptions used by Doing Business in collecting the data (see the section in this chapter on what the indicators cover). Summary of procedures for dealing with construction permits in India —and the time and cost Time to No. Procedure Cost to complete complete Submit application and design plans and pay scrutiny fee BuildCo submits application form with plans and all required documents, as prescribed by Section 337 of the BMC Act, at the Andhuri Building Proposal Office of the BMC. If all documents are in order and the file is complete, BuildCo can proceed to pay the scrutiny fees in the same building by cash or bank draft. Once the fees have been paid, the application file is forwarded to the concerned officer in the Building Proposal Office. Then the file is forwarded to the Survey Office, which will remark on the application file 1 day INR 72,834 1 and check the remarks from the Development Plan Office (obtained during the design stage of the project). If the Survey Office is satisfied with their review, they will send back the application file to the Building Proposal Office within one week. The cost for this procedure is INR 56 per sq. m. for commercial projects and INR 28 per sq. m. of the built up area or the plot area, whichever is larger. Receive site inspection from Building Proposal Office A sub-engineer from the Building Proposal Office will conduct a site inspection within 3 -- 4 days of receiving the file from the survey office. 1 day no charge 2 The date and time of the site inspection are arranged by BuildCo’s architect. BuildCo must be on-site when the inspection takes place. Doing Business 2014 India 36 Time to No. Procedure Cost to complete complete Obtain Intimation of Disapproval and pay fees After the site inspection, the application file returns to the Building Proposal Office to receive an intimation of disapproval (authorization). The concerned Sub Engineer reviews the proposal and forwards the report to the Assistant Engineer and Executive Engineer. The proposal is approved at the Executive Engineer’s level if no concessions are involved. There are 3 executive engineers in the main Municipal Corporation of Greater Mumbai (MCGM) office and 2 in the Andhuri office (the latter is the office considered for the purposes of this study). Complete applications that do not require concessions (i.e. claiming of areas free of FSI as per provision in DCR 1991, deficiency in open spaces etc.) can be approved within a week. However, the majority of applications require some concessions and further scrutiny so they must be forwarded to the competent authorities. This latter process may take 30 -- 90 days to complete. The intimation of disapproval is issued with a list of NOC’s which the applicant must obtain separately from various departments and government authorities. Final clearance to build will only be given once BuildCo obtains all NOC’s. The NOC’s assigned to the intimation of 29 days INR 996,260 3 disapproval are case specific. For the purpose of this study, Doing Business has determined 7 basic NOC’s that are required of almost all projects: • Tree Authority • Storm Water and Drain Department • Sewerage Department • Hydraulic Department • Environmental Department (concerned with debris management) • Traffic and Coordination Department • CFO (fire clearance) BuildCo’s architect must take the Intimation of Disapproval and the design plans to each clearance office separately. NOCs can be applied for simultaneously, but NOC offices are spread out so the submission for these 7 NOC’s is likely to take some time. The cost for this procedure is INR 1.00 per sq. m. for Intimation of Disapproval + INR 2.00 per sq. m. (or a maximum of INR 45,000.00) as a deposit for debris clearance. The latter is returned after the completion of construction if the BMC has deemed all debris cleared. Submit structural plans approved by a structural engineer The Intimation of Disapproval (IOD) is only an approval of the civil plans. Review of the structural plans is done in parallel with the NOC process. No approval to this plan is required from the Municipal 1 day no charge 4 Corporation but copies are required to be submitted. Time required for submitting these structural plans is one day. Doing Business 2014 India 37 Time to No. Procedure Cost to complete complete * Apply for no-objection certificate (NOC) from Tree Authority Due to stringent environmental regulations, BuildCo must receive clearance from the Tree Authority (set up under the Maharashtra (urban areas) Preservation of Trees Act, 1975). The Tree Authority commission 1 day no charge 5 only meets once a month. The Tree Authority must ascertain what trees (if any) will be cut down as a result of construction. If trees are to be cut down, BuildCo will have to plant trees to replace them. * Receive inspection from Tree Authority Upon receipt of application for NOC, the Tree Authority will send a Tree Officer to personally inspect the trees on the premise. The Tree Officer 1 day no charge 6 then submits a report to the Tree Authority within a period of 30 days from the receipt of the application. * Obtain NOC from Tree Authority 7 30 days INR 4,500 * Request and obtain NOC from Storm Water and Drain Department 8 7 days no charge * Request and obtain NOC from Sewerage Department 9 7 days INR 77,306 * Request and obtain NOC from Electric Department BuildCo has to inform Brihanmumbai Electric Supply and Transport (BEST) of the project's power requirements along with a copy of the 7 days no charge 10 application submitted for building plan approval. BEST will assess whether an electrical substation upgrade is required at this stage. * Request and obtain NOC from Environmental Department 11 7 days no charge * Request and obtain NOC from Traffic & Coordination Department 12 7 days no charge Doing Business 2014 India 38 Time to No. Procedure Cost to complete complete * Request and obtain NOC from Chief Fire Office 13 All commercial structures require a fire safety clearance. 7 days INR 13,006 Obtain Commencement Certificate and pay development charges Upon submission of all required NOCs mentioned in the IOD and on compliance of the IOD conditions, the applicant may submit a request for the Commencement Certificate. The documents and NOC submitted by the applicants are verified by the staff and the necessary Commencement Certificate is approved. After payment of development charges and other applicable premium the Commencement Certificate 10 days INR 836,100 14 is issued within 7 to 15 days. The cost for the CC is INR 200.00 per sq. m. of land + INR 500.00 per sq. m. of building area. Request and receive inspection of plinth 15 1 day no charge Submit letter stating completion of building works to obtain an occupancy certificate and certificate of completion BuildCo's architect must submit a formal letter stating that construction 1 day no charge 16 has been completed according to the standards set forth in the IOD and CC. * Request and obtain completion NOC from Tree Authority 17 3 days no charge * Request and obtain completion NOC from Storm Water and Drain Department 18 3 days no charge * Request and obtain completion NOC from Sewerage Department 19 3 days no charge Doing Business 2014 India 39 Time to No. Procedure Cost to complete complete * Request and obtain completion NOC from Electric Department 20 3 days no charge * Request and obtain completion NOC from Environmental Department 21 3 days no charge * Request and obtain completion NOC from Traffic & Coordination Department 22 3 days no charge * Request and obtain completion NOC from Chief Fire Office All commercial structures require fire safety clearance according to fire and safety rules and regulations stipulated in Development Control Rules 1991 and the National Building Code. The fee for low-rise 3 days INR 70,000 23 commercial buildings is INR 5.00 per sq. m. Request and receive competition inspection from Building Proposal Office 24 1 day no charge Obtain occupancy certificate The Occupancy Certificate allows BuildCo to occupy the building but is 25 not considered a final document because BuildCo must still obtain the 1 day no charge Certificate of Completion. Obtain completion certificate The Completion Certificate is considered to be the final document that 30 days no charge 26 BuildCo requires to fully occupy the building and connect to utilities. Apply for permanent water connection An application for water connection is made to the Assistant Engineer of the Municipal Corporation. The Assistant Engineer of the Municipal 27 Corporation makes the inspection. There are two inspections: one 1 day no charge before the water connection is completed and another after completion. The inspection would not take more than a day. An officer of the water department of the Municipal Corporation inspects the premises and prepares a report on the connection. Doing Business 2014 India 40 Time to No. Procedure Cost to complete complete * Apply for permanent sewerage connection BuildCo must visit the ward office and submit a written request for a sewerage connection. The connection request must be submitted along 1 day no charge 28 with a copy of the building plans and the application request made to the Water Department. * Apply for telephone connection An application for the telephone connection is submitted to the utility 1 day no charge 29 company along with a security deposit. * Receive on-site inspection for water connection 30 1 day no charge * Receive on-site inspection for sewerage connection A private contractor hired by BuildCo completes most of the 31 inspections related to the connection, but the ward office will visit the 1 day no charge site once to inspect the connection as well. * Receive on-site inspection for telephone connection 32 1 day no charge * Obtain permanent water connection Fees for water connection include: • Water connection charges: INR 1,060.00 • Water meter: INR 150.00 • Refundable security deposit towards water charges bills at INR 25.00 45 days INR 1,210 33 per 1,000 liter + 60% of sewerage charges for the requirement of the building * Obtain permanent sewerage connection 34 30 days INR 50,000 Doing Business 2014 India 41 Time to No. Procedure Cost to complete complete * Obtain telephone connection 35 1 day INR 500 * Takes place simultaneously with another procedure. Note: Online procedures account for 0.5 days in the total time calculation. Source: Doing Business database. Doing Business 2014 India 42 GETTING ELECTRICITY Access to reliable and affordable electricity is vital WHAT THE GETTING ELECTRICITY for businesses. To counter weak electricity supply, many firms in developing economies have to rely INDICATORS MEASURE on self-supply, often at a prohibitively high cost. Whether electricity is reliably available or not, the Procedures to obtain an electricity first step for a customer is always to gain access by connection (number) obtaining a connection. Submitting all relevant documents and What do the indicators cover? obtaining all necessary clearances and permits Doing Business records all procedures required for Completing all required notifications and a local business to obtain a permanent electricity receiving all necessary inspections connection and supply for a standardized warehouse, as well as the time and cost to Obtaining external installation works and complete them. These procedures include possibly purchasing material for these works applications and contracts with electricity utilities, Concluding any necessary supply contract and clearances from other agencies and the external obtaining final supply and final connection works. The ranking on the ease of getting electricity is the simple average of Time required to complete each procedure the percentile rankings on its component (calendar days) indicators: procedures, time and cost. To make the Is at least 1 calendar day data comparable across economies, several assumptions are used. Each procedure starts on a separate day The warehouse: Does not include time spent gathering information  Is located in the economy’s largest business city, in an area where other Reflects the time spent in practice, with little warehouses are located. follow-up and no prior contact with officials  Is not in a special economic zone where Cost required to complete each procedure the connection would be eligible for (% of income per capita) subsidization or faster service. Official costs only, no bribes  Has road access. The connection works Excludes value added tax involve the crossing of a road or roads but are carried out on public land.  Is to either the low-voltage or the medium-  Is a new construction being connected to voltage distribution network and either overhead electricity for the first time. or underground, whichever is more common in the economy and area where the warehouse is  Has 2 stories, both above ground, with a located. The length of any connection in the total surface of about 1,300.6 square customer’s private domain is negligible. meters (14,000 square feet), and is built on a plot of 929 square meters (10,000 square  Requires crossing of a 10-meter road but all the feet). works are carried out in a public land, so there is no crossing into other people's private property. The electricity connection:  Involves installing one electricity meter. The  Is 150 meters long and is a 3-phase, 4-wire Y, monthly electricity consumption will be 0.07 140-kilovolt-ampere (kVA) (subscribed gigawatt-hour (GWh). The internal electrical capacity) connection. wiring has been completed. Doing Business 2014 India 43 GETTING ELECTRICITY Where does the economy stand today? What does it take to obtain a new electricity procedures, takes 67 days and costs 230.7% of income connection in India? According to data collected by per capita (figure 4.1). Doing Business, getting electricity there requires 7 Figure 4.1 What it takes to obtain an electricity connection in India Note: Time shown in the figure above may not reflect simultaneity of procedures. For more information on the methodology of the getting electricity indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database. Doing Business 2014 India 44 GETTING ELECTRICITY Globally, India stands at 111 in the ranking of 189 regional average ranking provide another perspective economies on the ease of getting electricity (figure in assessing how easy it is for an entrepreneur in India 4.2). The rankings for comparator economies and the to connect a warehouse to electricity. Figure 4.2 How India and comparator economies rank on the ease of getting electricity Source: Doing Business database. Doing Business 2014 India 45 GETTING ELECTRICITY Even more helpful than rankings on the ease of getting performers on these indicators may provide useful electricity may be the indicators underlying those benchmarks. rankings (table 4.1). And regional and global best Table 4.1 The ease of getting electricity in India Best performer in Best performer Indicator India DB2014 India DB2013 South Asia DB2014 globally DB2014 Rank 111 110 Sri Lanka* (91) Iceland (1) Procedures (number) 7 7 Sri Lanka* (4) 10 Economies* (3) Time (days) 67 67 India (67) Germany (17) Cost (% of income per capita) 230.7 247.3 India (230.7) Japan (0.0) Note: DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB201 3 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. * Two or more economies share the top ranking on this indicator. For a list of these economies, see the Doing Business website (http://www.doingbusiness.org). Source: Doing Business database. Doing Business 2014 India 46 GETTING ELECTRICITY Obtaining an electricity connection is essential to safety in the connection process while keeping enable a business to conduct its most basic operations. connection costs reasonable, governments around the In many economies the connection process is world have worked to consolidate requirements for complicated by the multiple laws and regulations obtaining an electricity connection. What reforms in involved—covering service quality, general safety, getting electricity has Doing Business recorded in India technical standards, procurement practices and (table 4.2)? internal wiring installations. In an effort to ensure Table 4.2 How has India made getting electricity easier—or not? By Doing Business report year DB year Reform DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Source: Doing Business database. Doing Business 2014 India 47 GETTING ELECTRICITY What are the details? The indicators reported here for India are based on a OBTAINING AN ELECTRICITY CONNECTION set of specific procedures—the steps that an entrepreneur must complete to get a warehouse connected to electricity by the local distribution City: Mumbai utility—identified by Doing Business. Data are collected from the distribution utility, then completed and Bhrihan Mumbai verified by electricity regulatory agencies and Name of Utility: Electricity & Transport independent professionals such as electrical engineers, Undertaking electrical contractors and construction companies. The The procedures are those that apply to a warehouse electricity distribution utility surveyed is the one and electricity connection matching the standard serving the area (or areas) in which warehouses are assumptions used by Doing Business in collecting the located. If there is a choice of distribution utilities, the data (see the section in this chapter on what the one serving the largest number of customers is indicators cover). The procedures, along with the selected. associated time and cost, are summarized below. Summary of procedures for getting electricity in India—and the time and cost Time to No. Procedure Cost to complete complete Submit application to Brihan Mumbai Electricity Supply and Transport Undertaking (BEST) and await site inspection An application for supply, addition or reduction in supply of electrical energy, shifting of service, extension of service, change of name or restoration of supply shall be made to BEST, copies of which are obtainable from the relevant ward offices or relevant consumer center of the Undertaking as well as downloadable from BEST’s website. The application duly filled in and signed by the owner or occupier of the 1 premises in respect of which the supply or additional supply is required 7 calendar days INR 50.0 shall be accepted after preliminary scrutiny at the relevant Ward Office on payment of processing fee in accordance with Annex 1 of Schedule of Charges approved by the Commission. Documents needed to be submitted – completed application form; proof of occupancy; details of load requirement; purpose for which electric connection is required. Site inspection includes confirmation of premises, identification of location of terminating service cable, and position of meter cabin. Receive external site inspection from BEST and await estimate Appointment can be made over the phone giving reference of application no; electrical contractor should be licensed, registration with 8 calendar days no charge 2 BEST of electrician not necessary. The Authorized Representative of the Undertaking on receipt of the application, with prior intimation, shall inspect the premises to confirm its eligibility and study the technical requirements of giving supply to the consumer and fix the position of Doing Business 2014 India 48 Time to No. Procedure Cost to complete complete main cut outs or circuit breakers and meters and sanction the load for the premises in consultation with the consumer and/or his Licensed Electrical contractor. Subsequently, BEST shall intimate the applicant of the details of any works that are required to be undertaken, the charges to be borne by the applicant thereon in accordance with Annex 2 of Schedule of Charges approved by the Maharashtra Electricity Regulatory Commission. Electrical contractor conducts external connection works Consumers supplied with low and medium voltage electrical energy shall provide and maintain an enclosure with a dry masonry wall not less than 250 millimeters thick or such other structure as may be approved by the Utility on which the utility's meter boards and service cutouts shall be 7 calendar days INR 8,000.0 3 supported and shall provide and maintain adequate protection for the meter board from ingress of water, tampering and mechanical damage. The consumer's mains shall in all cases, be brought to the Utility's point of supply. Submit electrical contractor's wiring and test report and estimated amount to BEST The connection cost is standard for connections between 100 KW - 150 KW. As required by Rule 45 of the Indian Electricity Rules, 1956, no electrical installation work (including additions, alterations, repairs and adjustment to existing installation) except such replacements of lamps, fans, fuses, switches and other component parts of the installation, as in no way alters the capacity and character of the installation, shall be 4 carried out upon the premises on behalf of any consumer or owner for 1 calendar day INR 45,000.0 the purposes of supply of energy to such consumer or owner, except by an Electrical Contractor Licensed by Government in this behalf and under the direct supervision of a person holding a certificate of competency, issued by Government. As soon as the consumer's installation is completed in all respects and tested by the consumer’s contractor, the consumer must submit to BEST a wiring contractor's work Terms & Conditions of Supply completion and test report. BEST inspects wiring and installs meter Upon receipt of the test report, the Authorized representative of the distribution company, with prior intimation, shall inspect the equipment / apparatus / wiring to confirm compliance as per the test report given. 5 Upon successful verification of the test report the distribution company 7 calendar days no charge shall proceed with the fixing of meters and coupling them with the consumer's installation preparatory to the inspection and testing of the installation and connection of supply. The consumer's wiring contractor should ensure that each installation is properly identified by a tag or otherwise, at the point of supply. Doing Business 2014 India 49 Time to No. Procedure Cost to complete complete BEST inspects and tests installation After the meters have been coupled to the installation the undertaking will notify the consumer's Licensed Electrical Contractor the time and the day when the undertaking's representative proposes to inspect and test 6 the installation. It will then be the duty of the Licensed Electrical 7 calendar days no charge Contractor to arrange for his supervisor to be present, at the inspection to give the Undertaking or its representative any information or assistance required concerning the installation. Submit meter security deposit, receive external connection and electricity starts flowing Security deposit - A consumer with a consumption of electricity of not less than one lac (1,00,000) kilo-watt hours per month and with no undisputed sums payable to the Undertaking may, at the option of such consumer, deposit security, by way of cash (including cheque and demand draft), irrevocable letter of credit or unconditional bank guarantee issued by a scheduled commercial bank. In case a consumer 7 who has deposited security subsequently opts to receive supply through 30 calendar days INR 132,297.5 a prepaid meter, the amount of such security deposit shall, after deduction of all monies owing from such consumer, be either refunded to such consumer or treated as a part of the value of the prepaid credit to the account of such consumer, from which the value of his future consumption is to be deducted. The Undertaking shall apply any security so deposited, towards satisfaction of any amount which is due or owing from the consumer. * Takes place simultaneously with another procedure. Source: Doing Business database. Doing Business 2014 India 50 REGISTERING PROPERTY Ensuring formal property rights is fundamental. WHAT THE REGISTERING PROPERTY Effective administration of land is part of that. If INDICATORS MEASURE formal property transfer is too costly or complicated, formal titles might go informal again. And where property is informal or poorly Procedures to legally transfer title on administered, it has little chance of being immovable property (number) accepted as collateral for loans—limiting access to Preregistration (for example, checking for liens, finance. notarizing sales agreement, paying property transfer taxes) What do the indicators cover? Registration in the economy’s largest business Doing Business records the full sequence of city procedures necessary for a business to purchase property from another business and transfer the Postregistration (for example, filing title with the municipality) property title to the buyer’s name. The transaction is considered complete when it is opposable to Time required to complete each procedure third parties and when the buyer can use the (calendar days) property, use it as collateral for a bank loan or Does not include time spent gathering resell it. The ranking on the ease of registering information property is the simple average of the percentile rankings on its component indicators: procedures, Each procedure starts on a separate day. time and cost. Procedures that can be fully completed online are an exception to this rule. To make the data comparable across economies, Procedure considered completed once final several assumptions about the parties to the document is received transaction, the property and the procedures are used. No prior contact with officials The parties (buyer and seller): Cost required to complete each procedure (% of property value)  Are limited liability companies, 100% domestically and privately owned. Official costs only, no bribes  Are located in the economy’s largest No value added or capital gains taxes included business city. and no rezoning is required.  Have 50 employees each, all of whom are  Has no mortgages attached and has been nationals. under the same ownership for the past 10  Perform general commercial activities. years. The property (fully owned by the seller):  Consists of 557.4 square meters (6,000 square feet) of land and a 10-year-old, 2-story  Has a value of 50 times income per capita. warehouse of 929 square meters (10,000 The sale price equals the value. square feet). The warehouse is in good  Is registered in the land registry or cada- condition and complies with all safety stre, or both, and is free of title disputes. standards, building codes and legal requirements. There is no heating system. The  Is located in a periurban commercial zone, property will be transferred in its entirety. Doing Business 2014 India 51 REGISTERING PROPERTY Where does the economy stand today? What does it take to complete a property transfer in 44.0 days and costs 7.0% of the property value (figure India? According to data collected by Doing Business, 5.1). registering property there requires 5 procedures, takes Figure 5.1 What it takes to register property in India Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the total time calculation. For more information on the methodology of the registering property indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database. Doing Business 2014 India 52 REGISTERING PROPERTY Globally, India stands at 92 in the ranking of 189 regional average ranking provide other useful economies on the ease of registering property (figure information for assessing how easy it is for an 5.2). The rankings for comparator economies and the entrepreneur in India to transfer property. Figure 5.2 How India and comparator economies rank on the ease of registering property Source: Doing Business database. Doing Business 2014 India 53 REGISTERING PROPERTY What are the changes over time? The benchmarks provided by the economies that over what is possible in making it easier to register time have had the best performance regionally or property. And changes in regional averages can show globally on the procedures, time or cost required to where India is keeping up—and where it is falling complete a property transfer (figure 5.3) help show behind. Figure 5.3 Has registering property become easier over time? Procedures (number) Time (days) Doing Business 2014 India 54 REGISTERING PROPERTY Cost (% of property value) Note: DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB2013 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. For more information on “no practice” marks, see the data notes. Source: Doing Business database. Doing Business 2014 India 55 REGISTERING PROPERTY Economies worldwide have been making it easier for have cut the time required substantially—enabling entrepreneurs to register and transfer property—such buyers to use or mortgage their property earlier. What as by computerizing land registries, introducing time property registration reforms has Doing Business limits for procedures and setting low fixed fees. Many recorded in India (table 5.1)? Table 5.1 How has India made registering property easier—or not? By Doing Business report year DB year Reform DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2014 India 56 REGISTERING PROPERTY What are the details? The indicators reported here are based on a set of STANDARD PROPERTY TRANSFER specific procedures—the steps that a buyer and seller must complete to transfer the property to the buyer’s name—identified by Doing Business through information collected from local property City: Mumbai lawyers, notaries and property registries. These procedures are those that apply to a transaction Property Value: INR 4,017,793 matching the standard assumptions used by Doing Business in collecting the data (see the section in The procedures, along with the associated time and this chapter on what the indicators cover). cost, are summarized below. Summary of procedures for registering property in India—and the time and cost Time to No. Procedure Cost to complete complete Check for encumbrances at the office of Sub-Registrar of Assurance The purchaser should conduct a search of the property in the Registry and the Revenue Office, noting the location details of the property and the time period to be checked. While investigating the title it should be verified (1) that the legal ownership document is in the name of the owner, issued by the Revenue Record Department under the seal of the Tahsildar, (2) that on the date of purchase the title of the owner for the preceding 30 years (preferably) shows no mortgage or other encumbrance as still existing on the date of purchase, (3) the property is transferable and heritable, (4) the transferor is competent and/or authorized to transfer the 1 property, 5 days Rs. 10,000 (5) the transferee is qualified to be a transferee, (6) the object or consideration for the transfer is lawful, (7) the transfer has been made and completed in the manner prescribed by law. Also, all papers with regard to payment of taxes, the electricity bills and water bills need to be checked. If the seller is a Company incorporated under the provisions of the Companies Act, 1956 then it is prudent to take search in the office of the Registrar of Companies to verify whether there is any charge on the property registered under the provisions of Section 125 of the Companies Act, 1956. Doing Business 2014 India 57 Time to No. Procedure Cost to complete complete Preparation of the final sale deed by the purchaser’s lawyer The lawyer prepares the final sale deed and then engrosses the 1% of the property document on green paper leaving the date and place blank. This 7 days value (About INR 2 document is then submitted for stamping. 40,000) The fee for the lawyer varies from transaction to transaction. Payment of Stamp Duty on the final Sale Deed through franking at the designated bank. Deposits the said fees in the designated bank or authorised collection center of the Stock Holding Corporation of India for stamping of the Sale Deed. The designated bank issues a receipt and marks the first page of 1 day 5% of property 3 the printed sale deed with the stamp duty received. This printed sale value deed with stamp duty details will then be executed. The True Market Value is computed on the basis of rates of property published in the Ready Reckoner issued by the Government every year. Execute final sale deed and submit documents to the local office of the Sub-Registrar of Assurances The execution of the sale deed in front of the 2 witnesses is commonly done at the same time and place where the buyer submits documents to the Sub-Registrar. The documents are submitted to the office of the Sub Registrar of Assurances within whose jurisdiction the property is located. The authorized signatories of the seller and purchaser are required to be present along with two witnesses. Once the document is registered, a distinct document number is assigned to that document. The record of 1% of market registration is kept in the office of sub registrar of assurance. value of the The documents are submitted to the Reader of the Sub-Registrar of property Assurances for scrutiny. After scrutiny, the Reader indicates the (Maximum INR 4 registration fee required, which is 1% of the transaction value or Rs. 1 day 30,000) + INR 20 30,000/- whichever is less on the document itself. The due registration per page of final fee is to be deposited with the cashier against a receipt. After depositing sale deed for the fees, the documents are presented before the Sub-Registrar in scanning charges accordance with Section 32 of the Registration Act, 1908. Normally, the (paid in cash) Seller hands over the peaceful vacant and physical possession of the property to the buyer simultaneous to the deed being presented for registration. Upon payment of the required registration fees and computer service charges in cash, as per the receipt, the document is returned within 30 minutes of getting the receipt. The documentation shall include: (1) Document required to be registered (in duplicate) (2) Two passport-size photographs of the authorized signatories of both parties. (3) Photo identification of each party and witnesses i.e. voters' identity Doing Business 2014 India 58 Time to No. Procedure Cost to complete complete card, passport, identity card issued by Govt. of India, Semi Govt. and Autonomous bodies or identification by a Gazette Officer. (4) Certified true copies of certificate of incorporation of both seller and purchaser. (5) Copy of the latest property register card (to be obtained from the City Survey Department) to indicate that the property does not belong to the government (6) Copy of the Municipal Tax bill to indicate the year in which the building was constructed (7)Copy of PAN Card of Income Tax of the Seller and the Buyer annexed along with the Sale Deed. It is also mandatory to affix thumb impression on the document to be registered in addition to signature and photograph. Apply to the Land & Survey Office for mutation of the tile of the property INR 450 An application for mutation of the title of the property will have to be (Application fee of made to the City Survey and Land Records office for seeking mutation of the title of the property in the name of the purchaser. The authorised INR 100; stamp signatory has to submit the duly signed application along with the duty on the affidavit, indemnity bond and a notarised copy of the registered Sale Indemnity Bond of 5 Deed. 30 days INR 200, stamp After the assessment of the request for mutation, the City Survey and duty of INR 100 on Land Records office decides the value of the tax on the property and the Affidavit in the issues a letter of mutation in favour of the purchaser. Cost included prescribed form application fee of INR 100; stamp duty on the Indemnity Bond of INR and notary fees of 200, stamp duty of INR 100 on the Affidavit in the prescribed form and INR 50) notary fees of INR 50. * Takes place simultaneously with another procedure. Note: Online procedures account for 0.5 days in the total time calculation. Source: Doing Business database. Doing Business 2014 India 59 GETTING CREDIT Two types of frameworks can facilitate access to WHAT THE GETTING CREDIT INDICATORS credit and improve its allocation: credit information MEASURE systems and borrowers and lenders in collateral and bankruptcy laws. Credit information systems enable lenders’ rights to view a potential borrower’s Strength of legal rights index (0–10) financial history (positive or negative)—valuable Rights of borrowers and lenders through information to consider when assessing risk. And collateral laws they permit borrowers to establish a good credit Protection of secured creditors’ rights through history that will allow easier access to credit. Sound bankruptcy laws collateral laws enable businesses to use their assets, especially movable property, as security to generate Depth of credit information index (0–6) capital—while strong creditors’ rights have been Scope and accessibility of credit information associated with higher ratios of private sector credit distributed by public credit registries and to GDP. private credit bureaus What do the indicators cover? Public credit registry coverage (% of adults) Doing Business assesses the sharing of credit Number of individuals and firms listed in information and the legal rights of borrowers and public credit registry as percentage of adult lenders with respect to secured transactions population through 2 sets of indicators. The depth of credit Private credit bureau coverage (% of adults) information index measures rules and practices Number of individuals and firms listed in affecting the coverage, scope and accessibility of largest private credit bureau as percentage of credit information available through a public credit adult population registry or a private credit bureau. The strength of legal rights index measures whether certain features that facilitate lending exist within the applicable collateral and bankruptcy laws. Doing Business uses case scenarios to determine the scope of the  Has up to 100 employees. secured transactions system, involving a secured  Is 100% domestically owned, as is the lender. borrower and a secured lender and examining legal The ranking on the ease of getting credit is based on restrictions on the use of movable collateral. These the percentile rankings on the sum of its component scenarios assume that the borrower: indicators: the depth of credit information index and  Is a private, incorporated, limited liability the strength of legal rights index. company.  Has its headquarters and only base of operations in the largest business city. Doing Business 2014 India 60 GETTING CREDIT Where does the economy stand today? How well do the credit information system and Globally, India stands at 28 in the ranking of 189 collateral and bankruptcy laws in India facilitate access economies on the ease of getting credit (figure 6.1). to credit? The economy has a score of 5 on the depth The rankings for comparator economies and the of credit information index and a score of 8 on the regional average ranking provide other useful strength of legal rights index (see the summary of information for assessing how well regulations and scoring at the end of this chapter for details). Higher institutions in India support lending and borrowing. scores indicate more credit information and stronger legal rights for borrowers and lenders. Figure 6.1 How India and comparator economies rank on the ease of getting credit Source: Doing Business database. Doing Business 2014 India 61 GETTING CREDIT What are the changes over time? While the most recent Doing Business data reflect how institutions and regulations have been strengthened — well the credit information system and collateral and and where they have not (table 6.1). That can help bankruptcy laws in India support lending and identify where the potential for improvement is borrowing today, data over time can help show where greatest. Table 6.1 The ease of getting credit in India over time By Doing Business report year Indicator DB2005 DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 DB2013 DB2014 Rank .. .. .. .. .. .. .. .. 24 28 Strength of legal rights 6 6 7 8 8 8 8 8 8 8 index (0-10) Depth of credit 0 2 4 5 5 5 5 5 5 5 information index (0-6) Public registry coverage 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (% of adults) Private bureau 0.0 1.7 6.1 10.8 10.5 10.2 10.0 15.1 14.9 19.8 coverage (% of adults) Note: n.a. = not applicable (the economy was not included in Doing Business for that year). DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB2013 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. Source: Doing Business database. Doing Business 2014 India 62 GETTING CREDIT One way to put an economy’s score on the getting shows the number of economies with this score in credit indicators into context is to see where the 2013 as well as the regional average score. Figure 6.3 economy stands in the distribution of scores across shows the same thing for the depth of credit economies. Figure 6.2 highlights the score on the information index. strength of legal rights index for India in 2013 and Figure 6.2 How strong are legal rights for borrowers Figure 6.3 How much credit information is shared— and lenders? and how widely? Number of economies with each score on strength of legal Number of economies with each score on depth of credit rights index (0–10), 2013 information index (0–6), 2013 Note: Higher scores indicate that collateral and bankruptcy Note: Higher scores indicate the availability of more credit laws are better designed to facilitate access to credit. information, from either a credit registry or a credit bureau, Source: Doing Business database. to facilitate lending decisions. Regional averages for the depth of credit information index exclude economies with no credit registry or credit bureau. Source: Doing Business database. Doing Business 2014 India 63 GETTING CREDIT When economies strengthen the legal rights of lenders credit information, they can increase entrepreneurs’ and borrowers under collateral and bankruptcy laws, access to credit. What credit reforms has Doing and increase the scope, coverage and accessibility of Business recorded in India (table 6.2)? Table 6.2 How has India made getting credit easier—or not? By Doing Business report year DB year Reform DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2014 India 64 GETTING CREDIT What are the details? The getting credit indicators reported here for India The data on the legal rights of borrowers and lenders are based on detailed information collected in that are gathered through a survey of financial lawyers and economy. The data on credit information sharing are verified through analysis of laws and regulations as collected through a survey of a credit registry and/or well as public sources of information on collateral and credit bureau (if one exists). To construct the depth of bankruptcy laws. For the strength of legal rights index, credit information index, a score of 1 is assigned for a score of 1 is assigned for each of 8 aspects related to each of 6 features of the credit registry or credit legal rights in collateral law and 2 aspects in bureau (see summary of scoring below). bankruptcy law. Summary of scoring for the getting credit indicators in India OECD high income Indicator India South Asia average average Strength of legal rights index (0-10) 8 6 7 Depth of credit information index (0-6) 5 4 5 Public registry coverage (% of adults) 0.0 10.5 42.9 Private bureau coverage (% of adults) 19.8 15.4 73.9 Note: In cases where an economy’s regional classification is “OECD high income,” regional averages above are only displayed once. Regional averages for the depth of credit information index exclude economies with no credit registry or credit bureau. Regional averages for the credit registry coverage exclude economies with no credit registry. Regional averages for the credit bureau coverage exclude economies with no credit bureau. Strength of legal rights index (0–10) Index score: 8 Can any business use movable assets as collateral while keeping possession of the assets; and Yes any financial institution accept such assets as collateral ? Does the law allow businesses to grant a non possessory security right in a single category of Yes movable assets, without requiring a specific description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of Yes its assets, without requiring a specific description of collateral? May a security right extend to future or after-acquired assets, and may it extend automatically Yes to the products, proceeds or replacements of the original assets ? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; and can the collateral agreement Yes include a maximum amount for which the assets are encumbered? Is a collateral registry in operation, that is unified geographically and by asset type, with an Yes electronic database indexed by debtor's names? Doing Business 2014 India 65 Strength of legal rights index (0–10) Index score: 8 Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor No defaults outside an insolvency procedure? Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is No liquidated? Are secured creditors either not subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization procedure, or does the law provide secured Yes creditors with grounds for relief from an automatic stay or/and sets a time limit to it? Does the law allow parties to agree in a collateral agreement that the lender may enforce its Yes security right out of court, at the time a security interest is created? Depth of credit information index (0–6) Credit bureau Credit registry Index score: 5 Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative data distributed? Yes No 1 Does the registry distribute credit information from retailers, trade creditors or utility companies as well as No No 0 financial institutions? Are more than 2 years of historical credit information Yes No 1 distributed? Is data on all loans below 1% of income per capita Yes No 1 distributed? Is it guaranteed by law that borrowers can inspect Yes No 1 their data in the largest credit registry? Note: An economy receives a score of 1 if there is a "yes" to either private bureau or public registry. Credit bureau Credit registry Coverage (% of adults) (% of adults) Number of firms 5,241,709 0 Number of individuals 154,700,919 0 Source: Doing Business database. Doing Business 2014 India 66 PROTECTING INVESTORS Protecting investors matters for the ability of WHAT THE PROTECTING INVESTORS companies to raise the capital they need to grow, INDICATORS MEASURE innovate, diversify and compete. If the laws do not protect minority shareholders, investors may be reluctant to provide funding to companies through Extent of disclosure index (0–10) the purchase of shares unless they become the Approval process for related-party controlling shareholders. Effective regulations define transactions related-party transactions precisely, promote clear Disclosure requirements in case of related- and efficient disclosure requirements, require party transactions shareholder participation in major decisions of the company and set detailed standards of accountability Extent of director liability index (0–10) for company insiders. Ability of minority shareholders to file a direct or derivative lawsuit What do the indicators cover? Ability of minority shareholders to hold Doing Business measures the strength of minority interested parties and members of the shareholder protections against directors’ use of approving body liable for prejudicial related- corporate assets for personal gain—or self-dealing. party transactions The indicators distinguish 3 dimensions of investor protections: transparency of related-party Available legal remedies (damages, repayment of profits, fines, imprisonment and rescission transactions (extent of disclosure index), liability for of the transaction) self-dealing (extent of director liability index) and minority shareholders’ access to evidence before and Ease of shareholder suits index (0–10) during trial (ease of shareholder suits index). The Access to internal corporate documents ranking on the strength of investor protection index is (directly or through a government inspector) the simple average of the percentile rankings on these 3 indices. To make the data comparable across Documents and information available during trial economies, a case study uses several assumptions about the business and the transaction. Strength of investor protection index (0–10) The business (Buyer): Simple average of the extent of disclosure, extent of director liability and ease of  Is a publicly traded corporation listed on the shareholder suits indices economy’s most important stock exchange (or at least a large private company with multiple shareholders). the company purchase used trucks from another company he owns.  Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of  The price is higher than the going price for used Buyer where permitted, even if this is not trucks, but the transaction goes forward. specifically required by law.  All required approvals are obtained, and all The transaction involves the following details: required disclosures made, though the transaction is prejudicial to Buyer.  Mr. James, a director and the majority shareholder of the company, proposes that  Shareholders sue the interested parties and the members of the board of directors. Doing Business 2014 India 67 PROTECTING INVESTORS Where does the economy stand today? How strong are investor protections against self- index (figure 7.1). While the indicator does not dealing in India? The economy has a score of 6.3 on measure all aspects related to the protection of the strength of investor protection index, with a higher minority investors, a higher ranking does indicate that score indicating stronger protections (see the an economy’s regulations offer stronger investor summary of scoring at the end of this chapter for protections against self-dealing in the areas measured. details). Globally, India stands at 34 in the ranking of 189 economies on the strength of investor protection Figure 7.1 How India and comparator economies rank on the strength of investor protection index Source: Doing Business database. Doing Business 2014 India 68 PROTECTING INVESTORS What are the changes over time? While the most recent Doing Business data reflect how ranking on the strength of investor protection index well regulations in India protect minority investors over time shows whether the economy is slipping today, data over time show whether the protections behind other economies in investor protections—or have been strengthened (table 7.1). And the global surpassing them. Table 7.1 The strength of investor protections in India over time By Doing Business report year Indicator DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 DB2013 DB2014 Rank .. .. .. .. .. .. .. 32 34 Extent of disclosure 7 7 7 7 7 7 7 7 7 index (0-10) Extent of director 4 4 4 4 4 4 4 4 4 liability index (0-10) Ease of shareholder 7 7 7 7 7 8 8 8 8 suits index (0-10) Strength of investor protection index (0- 6.0 6.0 6.0 6.0 6.0 6.3 6.3 6.3 6.3 10) Note: n.a. = not applicable (the economy was not included in Doing Business for that year). DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB2013 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. Source: Doing Business database. Doing Business 2014 India 69 PROTECTING INVESTORS One way to put an economy’s scores on the protecting the number of economies with this score in 2013 as investors indicators into context is to see where the well as the regional average score. Figure 7.3 applies to economy stands in the distribution of scores across the extent of director liability index, and figure 7.4 to economies. Figure 7.2 highlights the score on the the ease of shareholder suits index. extent of disclosure index for India in 2013 and shows Figure 7.2 How strong are disclosure requirements? Figure 7.3 How strong is the liability regime for directors? Number of economies with each score on the extent of Number of economies with each score on the extent of director liability index (0–10), 2013 disclosure index (0–10), 2013 Note: Higher scores indicate greater liability of directors. Note: Higher scores indicate greater disclosure. Source: Doing Business database. Source: Doing Business database. Doing Business 2014 India 70 PROTECTING INVESTORS Figure 7.4 How easy is accessing internal corporate documents? Number of economies with each score on the ease of shareholder suits index (0–10), 2013 Note: Higher scores indicate greater minority shareholder access to evidence before and during trial. Source: Doing Business database. Doing Business 2014 India 71 PROTECTING INVESTORS The scores recorded over time for India on the changes over time in the regional average score on strength of investor protection index may also be this index. revealing (figure 7.5). Equally interesting may be the Figure 7.5 Have investor protections become stronger over time? Strength of investor protection index (0–10) Note: The higher the score, the stronger the protections. Source: Doing Business database. Doing Business 2014 India 72 PROTECTING INVESTORS Economies with the strongest protections of minority reasonable time. As a result, reforms to strengthen investors from self-dealing require detailed disclosure investor protections may move ahead on different and define clear duties for directors. They also have fronts—such as through new or amended company well-functioning courts and up-to-date procedural laws, securities regulations or civil procedure rules. rules that give minority shareholders the means to What investor protection reforms has Doing Business prove their case and obtain a judgment within a recorded in India (table 7.2)? Table 7.2 How has India strengthened investor protections—or not? By Doing Business report year DB year Reform DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2014 India 73 PROTECTING INVESTORS What are the details? The protecting investors indicators reported here for ease of shareholder suits indices, scores are assigned India are based on detailed information collected to each based on a range of conditions relating to through a survey of corporate and securities lawyers disclosure, director liability and shareholder suits in a about securities regulations, company laws and court standard case study transaction (see the data notes at rules of evidence and procedure. To construct the the end of this chapter). The summary below shows extent of disclosure, extent of director liability and the details underlying the scores for India. Summary of scoring for the protecting investors indicators in India South Asia OECD high income Indicator India average average Extent of disclosure index (0-10) 7 5 7 Extent of director liability index (0-10) 4 4 5 Ease of shareholder suits index (0-10) 8 6 7 Strength of investor protection index (0-10) 6.3 5.1 6.2 Note: In cases where an economy’s regional classification is “OECD high income,” regional averages above are only displayed once. Score Score description Extent of disclosure index (0-10) 7 What corporate body provides legally sufficient Board of directors and Mr. James is 2 approval for the transaction? not allowed to vote Whether disclosure of the conflict of interest by Mr. 2 Full disclosure of all material facts James to the board of directors is required? Whether immediate disclosure of the transaction to 0 No disclosure obligation the public and/or shareholders is required? Whether disclosure of the transaction in published Disclosure on the transaction and Mr. 2 periodic filings (annual reports) is required? James' conflict of interest Whether an external body must review the terms of 1 Yes the transaction before it takes place? Extent of director liability index (0-10) 4 Whether shareholders can sue directly or derivatively for the damage that the Buyer-Seller transaction 1 Yes causes to the company? Whether shareholders can hold Mr. James liable for the damage that the Buyer-Seller transaction causes 0 Not liable to the company? Whether shareholders can hold members of the Liable for unfair/oppressive approving body liable for the damage that the Buyer- 2 transaction or prejudicial to minority Seller transaction causes to the company? shareholders Doing Business 2014 India 74 Score Score description Possible when the transaction is Whether a court can void the transaction upon a 1 oppressive or prejudicial to minority successful claim by a shareholder plaintiff? shareholders Whether Mr. James pays damages for the harm caused to the company upon a successful claim by 0 No the shareholder plaintiff? Whether Mr. James repays profits made from the transaction upon a successful claim by the 0 No shareholder plaintiff? Whether fines and imprisonment can be applied 0 No against Mr. James? Ease of shareholder suits index (0-10) 8 Whether shareholders owning 10% or less of Buyer's shares can inspect transaction documents before 0 No filing suit? Whether shareholders owning 10% or less of Buyer's shares can request an inspector to investigate the 1 Yes transaction? Whether the plaintiff can obtain any documents from Any information that may lead to the 4 the defendant and witnesses during trial? discovery of relevant information Whether the plaintiff can request categories of documents from the defendant without identifying 0 No specific ones? Whether the plaintiff can directly question the 2 Yes, without approval from the judge defendant and witnesses during trial? Whether the level of proof required for civil suits is 1 Yes lower than that of criminal cases? Strength of investor protection index (0-10) 6.3 Source: Doing Business database. Doing Business 2014 India 75 PAYING TAXES Taxes are essential. They fund the public amenities, WHAT THE PAYING TAXES INDICATORS infrastructure and services that are crucial for a MEASURE properly functioning economy. But the level of tax rates needs to be carefully chosen—and needless Tax payments for a manufacturing company complexity in tax rules avoided. According to in 2012 (number per year adjusted for Doing Business data, in economies where it is more electronic and joint filing and payment) difficult and costly to pay taxes, larger shares of economic activity end up in the informal sector— Total number of taxes and contributions paid, where businesses pay no taxes at all. including consumption taxes (value added tax, sales tax or goods and service tax) What do the indicators cover? Method and frequency of filing and payment Using a case scenario, Doing Business measures Time required to comply with 3 major taxes the taxes and mandatory contributions that a (hours per year) medium-size company must pay in a given year as well as the administrative burden of paying taxes Collecting information and computing the tax and contributions. This case scenario uses a set of payable financial statements and assumptions about Completing tax return forms, filing with transactions made over the year. Information is proper agencies also compiled on the frequency of filing and Arranging payment or withholding payments as well as time taken to comply with tax laws. The ranking on the ease of paying taxes is Preparing separate tax accounting books, if the simple average of the percentile rankings on required its component indicators: number of annual Total tax rate (% of profit before all taxes) payments, time and total tax rate, with a threshold 1 Profit or corporate income tax being applied to the total tax rate. To make the data comparable across economies, several Social contributions and labor taxes paid by assumptions about the business and the taxes and the employer contributions are used. Property and property transfer taxes  TaxpayerCo is a medium-size business that Dividend, capital gains and financial started operations on January 1, 2011. transactions taxes  The business starts from the same financial Waste collection, vehicle, road and other taxes position in each economy. All the taxes  Taxes and mandatory contributions include and mandatory contributions paid during corporate income tax, turnover tax and all the second year of operation are recorded. labor taxes and contributions paid by the  Taxes and mandatory contributions are company. measured at all levels of government.  A range of standard deductions and exemptions are also recorded. 1 The threshold is defined as the highest total tax rate among the top 15% of economies in the ranking on the total tax rate. It is calculated and adjusted on a yearly basis. The threshold is not based on any economic theory of an “optimal tax rate” that minimizes distortions or maximizes efficiency in the tax system of an economy overall. Instead, it is mainly empirical in nature, set at the lower end of the distribution of tax rates levied on medium-size enterprises in the manufacturing sector as observed through the paying taxes indicators. This reduces the bias in the indicators toward economies that do not need to levy significant taxes on companies like the Doing Business standardized case study company because they raise public revenue in other ways—for example, through taxes on foreign companies, through taxes on sectors other than manufacturing or from natural resources (all of which are outside the scope of the methodology). This year’s threshold is 25.5%. Doing Business 2014 India 76 PAYING TAXES Where does the economy stand today? What is the administrative burden of complying with Globally, India stands at 158 in the ranking of 189 taxes in India—and how much do firms pay in taxes? economies on the ease of paying taxes (figure 8.1). The On average, firms make 33 tax payments a year, spend rankings for comparator economies and the regional 243 hours a year filing, preparing and paying taxes and average ranking provide other useful information for pay total taxes amounting to 62.8% of profit (see the assessing the tax compliance burden for businesses in summary at the end of this chapter for details). India. Figure 8.1 How India and comparator economies rank on the ease of paying taxes Source: Doing Business database. Doing Business 2014 India 77 PAYING TAXES What are the changes over time? The benchmarks provided by the economies that over show what is possible in easing the administrative time have had the best performance regionally or burden of tax compliance. And changes in regional globally on the number of payments or the time averages can show where India is keeping up—and required to prepare and file taxes (figure 8.2) help where it is falling behind. Figure 8.2 Has paying taxes become easier over time? Payments (number per year) Time (hours per year) Doing Business 2014 India 78 PAYING TAXES Total tax rate (% of profit) Note: DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB201 3 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. DB2013 rankings reflect changes to the methodology. For all economies with a total tax rate below the threshold of 25.5% applied in DB2014, the total tax rate is set at 25.5% for the purpose of calculating the ranking on the ease of paying taxes. Source: Doing Business database. Doing Business 2014 India 79 PAYING TAXES Economies around the world have made paying taxes concrete results. Some economies simplifying tax faster and easier for businesses—such as by payment and reducing rates have seen tax revenue consolidating filings, reducing the frequency of rise. What tax reforms has Doing Business recorded in payments or offering electronic filing and payment. India (table 8.1)? Many have lowered tax rates. Changes have brought Table 8.1 How has India made paying taxes easier—or not? By Doing Business report year DB year Reform DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. India reduced the administrative burden of paying taxes by DB2011 abolishing the fringe benefit tax and improving electronic payment. India eased the administrative burden of paying taxes for firms DB2012 by introducing mandatory electronic filing and payment for value added tax. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2014 India 80 PAYING TAXES What are the details? The indicators reported here for India are based on LOCATION OF STANDARDIZED COMPANY a standard set of taxes and contributions that would be paid by the case study company used by Doing Business in collecting the data (see the City: Mumbai section in this chapter on what the indicators cover). Tax practitioners are asked to review standard financial statements as well as a standard list of transactions that the company completed The taxes and contributions paid are listed in the during the year. Respondents are asked how much summary below, along with the associated number of in taxes and mandatory contributions the business payments, time and tax rate. must pay and what the process is for doing so. Summary of tax rates and administrative burden in India OECD high income Indicator India South Asia average average Payments (number per year) 33 33 12 Time (hours per year) 243 328 175 Profit tax (%) 24.4 16.8 16.1 Labor tax and contributions (%) 20.7 9.0 23.1 Other taxes (%) 17.8 14.8 2.0 Total tax rate (% profit) 62.8 40.6 41.3 Note: In cases where an economy’s regional classification is “OECD high income,” regional averages above are only displayed once. Total tax Notes on Tax or mandatory Payments Notes on Time Statutory Tax base rate (% of total tax contribution (number) payments (hours) tax rate profit) rate taxable Corporate income tax 1 online filing 45 30% 20.6 profit Social security gross 12 93 13.61% 15.4 contributions salaries purchase Central Sales Tax 1 online filing 105 2% 14.1 price Doing Business 2014 India 81 Total tax Notes on Tax or mandatory Payments Notes on Time Statutory Tax base rate (% of total tax contribution (number) payments (hours) tax rate profit) rate Employee's state insurance gross 12 0 4.75% 5.4 contribution salaries dividend Dividend tax 1 0 16.2225% distributio 3.7 ns assessed Property tax 1 0 10% 3.3 value insurance Tax on insurance contracts 1 0 12.36% 0.2 premium fixed fee Vehicle tax (pollution tax) 1 0 INR 200 0 per vehicle value not State VAT 1 online filing 0 12.5% 0 added included value not CENVAT (Excise Duty) 1 online filing 0 12.36% 0 added included interest included in Tax on interest 0 withheld 0 10% 0 income other taxes fuel small Fuel tax 1 0 consumpti 0 amount on on all included in Income surcharge 0 paid jointly 0 7.5% federal 0 other taxes taxes all federal taxes included in Education cess 0 paid jointly 0 2% including 0 other taxes the surcharge all federal taxes Secondary & Higher included in 0 paid jointly 0 1% including 0 education cess other taxes the surcharge Totals 33 243 62.8 Source: Doing Business database. Doing Business 2014 India 82 TRADING ACROSS BORDERS In today’s globalized world, making trade between WHAT THE TRADING ACROSS BORDERS economies easier is increasingly important for INDICATORS MEASURE business. Excessive document requirements, burdensome customs procedures, inefficient port operations and inadequate infrastructure all lead to Documents required to export and import extra costs and delays for exporters and importers, (number) stifling trade potential. Research shows that Bank documents exporters in developing countries gain more from Customs clearance documents a 10% drop in their trading costs than from a similar reduction in the tariffs applied to their Port and terminal handling documents products in global markets. Transport documents What do the indicators cover? Time required to export and import (days) Doing Business measures the time and cost Obtaining, filling out and submitting all the (excluding tariffs and the time and cost for sea documents transport) associated with exporting and importing Inland transport and handling a standard shipment of goods by sea transport, and the number of documents necessary to Customs clearance and inspections complete the transaction. The indicators cover Port and terminal handling procedural requirements such as documentation Does not include sea transport time requirements and procedures at customs and other regulatory agencies as well as at the port. They also Cost required to export and import (US$ per cover trade logistics, including the time and cost of container) inland transport to the largest business city. The All documentation ranking on the ease of trading across borders is the simple average of the percentile rankings on its Inland transport and handling component indicators: documents, time and cost Customs clearance and inspections to export and import. Port and terminal handling To make the data comparable across economies, Official costs only, no bribes Doing Business uses several assumptions about the business and the traded goods. The business: military items.  Is of medium size and employs 60 people.  Do not require refrigeration or any other special environment.  Is located in the periurban area of the economy’s largest business city.  Do not require any special phytosanitary or environmental safety standards other than  Is a private, limited liability company, accepted international standards. domestically owned, formally registered and operating under commercial laws and  Are one of the economy’s leading export or regulations of the economy. import products. The traded goods:  Are transported in a dry-cargo, 20-foot full container load.  Are not hazardous nor do they include Doing Business 2014 India 83 TRADING ACROSS BORDERS Where does the economy stand today? What does it take to export or import in India? Globally, India stands at 132 in the ranking of 189 According to data collected by Doing Business, economies on the ease of trading across borders exporting a standard container of goods requires 9 (figure 9.1). The rankings for comparator economies documents, takes 16 days and costs $1170. Importing and the regional average ranking provide other useful the same container of goods requires 11 documents, information for assessing how easy it is for a business takes 20 days and costs $1250 (see the summary of in India to export and import goods. procedures and documents at the end of this chapter for details). Figure 9.1 How India and comparator economies rank on the ease of trading across borders Source: Doing Business database. Doing Business 2014 India 84 TRADING ACROSS BORDERS What are the changes over time? The benchmarks provided by the economies that over possible in making it easier to trade across borders. time have had the best performance regionally or And changes in regional averages can show where globally on the documents, time or cost required to India is keeping up—and where it is falling behind. export or import (figure 9.2) help show what is Figure 9.2 Has trading across borders become easier over time? Documents to export (number) Time to export (days) Doing Business 2014 India 85 TRADING ACROSS BORDERS Cost to export (US$ per container) Documents to import (number) Doing Business 2014 India 86 TRADING ACROSS BORDERS Time to import (days) Cost to import (US$ per container) Note: DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB201 3 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. Source: Doing Business database. Doing Business 2014 India 87 TRADING ACROSS BORDERS In economies around the world, trading across borders systems. These changes help improve the trading as measured by Doing Business has become faster and environment and boost firms’ international easier over the years. Governments have introduced competitiveness. What trade reforms has Doing tools to facilitate trade—including single windows, Business recorded in India (table 9.1)? risk-based inspections and electronic data interchange Table 9.1 How has India made trading across borders easier—or not? By Doing Business report year DB year Reform DB2009 Implementation of EDI reduced the export time. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2014 India 88 TRADING ACROSS BORDERS What are the details? The indicators reported here for India are based on LOCATION OF STANDARDIZED COMPANY a set of specific procedural requirements for trading a standard shipment of goods by ocean transport (see the section in this chapter on what City: Mumbai the indicators cover). Information on the procedures as well as the required documents and the time and cost to complete each procedure is The procedural requirements, and the associated time collected from local freight forwarders, shipping and cost, for exporting and importing a standard lines, customs brokers, port officials and banks. shipment of goods are listed in the summary below, along with the required documents. Summary of procedures and documents for trading across borders in India OECD high income Indicator India South Asia average average Documents to export (number) 9 8 4 Time to export (days) 16 33 11 Cost to export (US$ per container) 1,170 1,787 1,070 Documents to import (number) 11 10 4 Time to import (days) 20 34 10 Cost to import (US$ per container) 1,250 1,968 1,090 Note: In cases where an economy’s regional classification is “OECD high income,” regional a verages above are only displayed once. Procedures to export Time (days) Cost (US$) Documents preparation 8 415 Customs clearance and technical control 2 130 Ports and terminal handling 3 225 Inland transportation and handling 3 400 Totals 16 1,170 Procedures to import Time (days) Cost (US$) Documents preparation 8 400 Doing Business 2014 India 89 Procedures to import Time (days) Cost (US$) Customs clearance and technical control 4 200 Ports and terminal handling 5 250 Inland transportation and handling 3 400 Totals 20 1,250 Documents to export Documents to import Bill of Lading Bill of Entry (customs import declaration) Certificate of Origin Bill of lading Commercial invoice Cargo release order Foreign exchange control form Certificate of origin Inspection report Certified engineer's report (technical standard certificate) Packing list Commercial invoice Shipping Bill (customs export declaration) Foreign exchange control form Technical standard certificate Inspection report Terminal handling receipts Packing list Source: Doing Business database. Product manual Terminal handling receipts Doing Business 2014 India 90 ENFORCING CONTRACTS Effective commercial dispute resolution has many WHAT THE ENFORCING CONTRACTS benefits. Courts are essential for entrepreneurs INDICATORS MEASURE because they interpret the rules of the market and protect economic rights. Efficient and transparent Procedures to enforce a contract through courts encourage new business relationships the courts (number) because businesses know they can rely on the courts if a new customer fails to pay. Speedy trials Steps to file and serve the case are essential for small enterprises, which may lack Steps for trial and judgment the resources to stay in business while awaiting the outcome of a long court dispute. Steps to enforce the judgment Time required to complete procedures What do the indicators cover? (calendar days) Doing Business measures the efficiency of the Time to file and serve the case judicial system in resolving a commercial dispute before local courts. Following the step-by-step Time for trial and obtaining judgment evolution of a standardized case study, it collects Time to enforce the judgment data relating to the time, cost and procedural complexity of resolving a commercial lawsuit. The Cost required to complete procedures (% of ranking on the ease of enforcing contracts is the claim) simple average of the percentile rankings on its Average attorney fees component indicators: procedures, time and cost. Court costs The dispute in the case study involves the breach Enforcement costs of a sales contract between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt enforcement. To make the data comparable across economies, Doing Business uses several assumptions about the case:  The seller and buyer are located in the economy’s largest business city.  The dispute on the quality of the goods requires an expert opinion.  The buyer orders custom-made goods, then fails to pay.  The judge decides in favor of the seller; there is no appeal.  The seller sues the buyer before a competent court.  The seller enforces the judgment through a public sale of the buyer’s movable assets.  The value of the claim is 200% of income per capita.  The seller requests a pretrial attachment to secure the claim. Doing Business 2014 India 91 ENFORCING CONTRACTS Where does the economy stand today? How efficient is the process of resolving a commercial Globally, India stands at 186 in the ranking of 189 dispute through the courts in India? According to data economies on the ease of enforcing contracts (figure collected by Doing Business, contract enforcement 10.1). The rankings for comparator economies and the takes 1420 days, costs 39.6% of the value of the claim regional average ranking provide other useful and requires 46 procedures (see the summary at the benchmarks for assessing the efficiency of contract end of this chapter for details). enforcement in India. Figure 10.1 How India and comparator economies rank on the ease of enforcing contracts Source: Doing Business database. Doing Business 2014 India 92 ENFORCING CONTRACTS What are the changes over time? The benchmarks provided by the economies that over help show what is possible in improving the efficiency time have had the best performance regionally or of contract enforcement. And changes in regional globally on the number of steps, time or cost required averages can show where India is keeping up—and to enforce a contract through the courts (figure 10.2) where it is falling behind. Figure 10.2 Has enforcing contracts become easier over time? Time (days) Cost (% of claim) Doing Business 2014 India 93 ENFORCING CONTRACTS Procedures (number) Note: DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB2013 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. Source: Doing Business database. Doing Business 2014 India 94 ENFORCING CONTRACTS Economies in all regions have improved contract often work on reducing backlogs by introducing enforcement in recent years. A judiciary can be periodic reviews to clear inactive cases from the docket improved in different ways. Higher-income economies and by making procedures faster. What reforms tend to look for ways to enhance efficiency by making it easier (or more difficult) to enforce contracts introducing new technology. Lower-income economies has Doing Business recorded in India (table 10.1)? Table 10.1 How has India made enforcing contracts easier—or not? By Doing Business report year DB year Reform DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2014 India 95 ENFORCING CONTRACTS What are the details? The indicators reported here for India are based on COURT NAME a set of specific procedural steps required to resolve a standardized commercial dispute through the courts (see the section in this chapter City: Mumbai on what the indicators cover). These procedures, and the time and cost of completing them, are Claim Value LCU: 142711 identified through study of the codes of civil procedure and other court regulations, as well as Court Name: Bombay City Civil Court through surveys completed by local litigation lawyers (and, in a quarter of the economies The procedures for resolving a commercial lawsuit, and covered by Doing Business, by judges as well). the associated time and cost, are listed in the summary below. Summary of procedures for enforcing a contract in India—and the time and cost OECD high income Indicator India South Asia average average Time (days) 1,420 1,075 529 Filing and service 20 Trial and judgment 1,095 Enforcement of judgment 305 Cost (% of claim) 39.6 27.7 21.0 Attorney cost (% of claim) 30.6 Court cost (% of claim) 8.5 Enforcement Cost (% of claim) 0.5 Procedures (number) 46 43 31 Note: In cases where an economy’s regional classification is “OECD high income,” regional averages above are only displayed once. Doing Business 2014 India 96 ENFORCING CONTRACTS No. Procedure Filing and service: Plaintiff requests payment: Plaintiff or his lawyer asks Defendant orally or in writing to comply with the 1 contract. 2 Plaintiff’s hiring of lawyer: Plaintiff hires a lawyer to represent him before the court. Plaintiff’s filing of summons and complaint: Plaintiff files his summons and complaint with the court, orally * or in writing. * Plaintiff’s payment of court fees: Plaintiff pays court duties, stamp duties, or any other type of court fee. Registration of court case: The court administration registers the lawsuit or court case. This includes 3 assigning a reference number to the lawsuit or court case. Assignment of court case to a judge: The court case is assigned to a specific judge through a random * procedure, automated system, ruling of an administrative judge, court officer, etc. Court scrutiny of summons and complaint: A judge examines Plaintiff's summons and complaint for 4 formal requirements. Judge admits summons and complaint: After verifying the formal requirements, the judge decides to * admit Plaintiff’s summons and complaint. 5 Court order for service: Upon Plaintiff’s request, judge orders process be served on Defendant. Delivery of summons and complaint to person authorized to perform service of process on Defendant: 6 The judge or a court officer delivers the summons to a summoning office, officer, or authorized person (including Plaintiff), for service of process on Defendant. Arrangements for physical delivery of summons and complaint: Plaintiff takes whatever steps are * necessary to arrange for physical service of process on Defendant, such as instructing a court officer or a (private) bailiff. Mailing of summons and complaint: Court or process server, including (private) bailiff, mails summons * and complaint to Defendant. First attempt at physical delivery: A first attempt to physically deliver summons and complaint to 7 Defendant is successful in the majority of cases. Second attempt at physical delivery: If a first attempt was not successful, a second attempt to physically 8 deliver the summons and complaint to Defendant is required by law or standard practice. * Proof of service: Plaintiff submits proof of service to court. Application for pre-judgment attachment: Plaintiff submits an application in writing for the attachment of * Defendant's property prior to judgment. (see assumption 5) Doing Business 2014 India 97 No. Procedure Decision on pre-judgment attachment: The judge decides whether to grant Plaintiff’s request for pre- * judgment attachment of Defendant’s property and notifies Plaintiff and Defendant of the decision. This step may include requesting that Plaintiff submit guarantees or bonds to secure Defendant Pre-judgment attachment.: Defendant's property is attached prior to judgment. Attachment is either 9 physical or achieved by registering, marking, debiting or separating assets. (see assumption 5) Custody of assets attached prior to judgment: Defendant's attached assets are put under enforcement 10 officer's or (private) bailiff's care. (see assumption 5) Hearing on pre-judgment attachment: A hearing takes place to resolve the question of whether 11 Defendant’s assets can be attached prior to judgment. This process may include the submission of separate summons and petitions. (see assumption 5) Trial and judgment: Defendant’s filing of preliminary exemptions: Defendant presents preliminary exemptions to the court. * Preliminary exemptions differ from answers on the merits of the claim. Examples of preliminary exemptions are statute of limitations, jurisdictions, etc. Plaintiff’s answer to preliminary exemptions: Plaintiff responds to the preliminary exemptions raised by * Defendant. Judge’s resolution on preliminary exemptions: Judge decides on preliminary exemptions separately from 12 the merits of the case. Defendant’s filing of defense or answer to Plaintiff’s claim: Defendant files a written pleading which includes his defense or answer on the merits of the case. Defendant's written answer may or may not 13 include witness statements, expert statements, the documents Defendant relies on as evidence and the legal authori Deadline for Plaintiff to answer Defendant's defense or answer: Judge sets the deadline by which Plaintiff 14 will be allowed to answer Defendant's defense or answer. Plaintiff’s written response to Defendant's defense or answer: Plaintiff responds to Defendant’s defense or 15 answer with a written pleading. Plaintiff's answer may or may not include a witness statements or expert (witness) statements. Filing of pleadings: Plaintiff and Defendant file written pleadings and submissions with the court and 16 transmit copies of the written pleadings or submissions to one another. The pleadings may or may not include witness statements or expert (witness) statements. Adjournments: Court procedure is delayed because one or both parties request and obtain an 17 adjournment to submit written pleadings. Framing of issues: Plaintiff and Defendant assist the court in framing issues on which evidence is to be 18 presented. Court appointment of independent expert: Judge appoints, either at the parties' request or at his own * initiative, an independent expert to decide whether the quality of the goods Plaintiff delivered to Defendant is adequate. (see assumption 6-b of this case) Doing Business 2014 India 98 No. Procedure Notification of court-appointment of independent expert: The court notifies both parties that the court is 19 appointing an independent expert. (see assumption 6-b of this case) Delivery of expert report by court-appointed expert: The independent expert appointed by the court * delivers his or her expert report to the court. (see assumption 6-b of this case) Discovery requests: Plaintiff and Defendant make requests for the disclosure of documents, attempting to * force the other party to reveal potentially detrimental documents. * Setting of date(s) for oral hearing or trial: The judge sets the date(s) for the oral hearing or trial. * List of (expert) witnesses: The parties file a list of (expert) witnesses with the court. (see assumption 6-a) Summoning of (expert) witnesses: The court summons (expert) witnesses to appear in court for the oral 20 hearing or trial. (see assumption 6-a) Adjournments: Court proceedings are delayed because one or both parties request and obtain an 21 adjournment to prepare for the oral hearing or trial. Oral hearing (prevalent in civil law): The parties argue the merits of the case at an oral hearing before the 22 judge. Witnesses and a court-appointed independent expert may be heard and questioned at the oral hearing. Adjournments: Court proceedings are delayed because one or both parties request and obtain an 23 adjournment during the oral hearing or trial, resulting in an additional or later trial or hearing date. Request for closing of the evidence period: Plaintiff or Defendant requests the judge to close the evidence * period. 24 Closing of the evidence period: The court makes the formal decision to close the evidence period. Order for submission of final arguments: The judge sets the deadline for the submission of final factual 25 and legal arguments. Final arguments: The parties present their final factual and legal arguments to the court either by oral * presentation or by a written submission. 26 Judgment date: The judge sets a date for delivery of the judgment. 27 Notification of judgment in court: The parties are notified of the judgment at a court hearing. 28 Writing of judgment: The judge produces a written copy of the judgment. Registration of judgment: The court office registers the judgment after receiving a written copy of the 29 judgment. 30 Plaintiff's receipt of a copy of written judgment: Plaintiff receives a copy of the written judgment. Appeal period: By law, Defendant has the opportunity to appeal the judgment during a period specified in 31 the law. Defendant decides not to appeal. Judgment becomes final the day the appeal period ends. Reimbursement by Defendant of Plaintiff's court fees: The judgment obliges Defendant to reimburse 32 Plaintiff for the court fees Plaintiff has advanced, because Defendant has lost the case. Enforcement of judgment: Doing Business 2014 India 99 No. Procedure Plaintiff’s hiring of lawyer: Plaintiff hires a lawyer to enforce the judgment or continues to be represented * by a lawyer during the enforcement of judgment phase. Plaintiff's approaching of court enforcement officer or (private) bailiff to enforce the judgment: To enforce 33 the judgment, Plaintiff approaches a court enforcement officer such as a court bailiff or sheriff, or a private bailiff. Plaintiff’s request for enforcement order: Plaintiff applies to the court to obtain the enforcement order * ('seal' on judgment). Plaintiff’s advancement of enforcement fees: Plaintiff pays the fees related to the enforcement of the 34 judgment. Delivery of enforcement order: The court's enforcement order is delivered to a court enforcement officer * or a (private) bailiff. Plaintiff’s request for physical enforcement: As Plaintiff fears that Defendant might physically resist the * attachment of its movable goods, Plaintiff addresses a request to the judge or to the police authorities to obtain police assistance during the attachment of Defendant's movable goods. Judge's order for physical enforcement: The judge orders the police to assist with the physical 35 enforcement of the attachment of Defendant's movable goods. Identification of Defendant's assets for attachment by court official or Defendant: Judge, a court 36 enforcement officer, a (private) bailiff or the Defendant himself identifies Defendant's movable assets for attachment. Plaintiff’s identification of Defendant's assets for attachment: Plaintiff identifies Defendant's assets for 37 attachment. Notification of intent to attach: A court enforcement officer or (private) bailiff notifies other creditors of 38 the intent to attach Defendant's goods. Attachment: Defendant’s movable goods are attached (physically or by registering, marking or separating 39 assets). Report on execution of attachment: A court enforcement officer or private process server delivers a report 40 on the attachment of Defendant's movable goods to the judge. Valuation or appraisal of attached movable goods: The court or court appointed valuation expert 41 evaluates the attached goods. Enforcement disputes before court: The enforcement of the judgment is delayed because Defendant 42 opposes aspects of the enforcement process before the judge. Call for public auction: The judge calls a public auction by, for example, advertising or publication in the 43 newspapers. 44 Sale through public auction: The Defendant’s movable property is sold at public auction. Reimbursement of Plaintiff’s enforcement fees: Defendant reimburses Plaintiff's enforce ment fees which 45 Plaintiff had advanced previously. 46 Payment: Court orders that the proceeds of the public auction or the direct sale be delivered to Plaintiff. Doing Business 2014 India 100 * Not counted in the total number of procedures. Source: Doing Business database. Doing Business 2014 India 101 RESOLVING INSOLVENCY A robust bankruptcy system functions as a filter, WHAT THE RESOLVING INSOLVENCY ensuring the survival of economically efficient companies and reallocating the resources of INDICATORS MEASURE inefficient ones. Fast and cheap insolvency proceedings result in the speedy return of Time required to recover debt (years) businesses to normal operation and increase Measured in calendar years returns to creditors. By improving the expectations of creditors and debtors about the outcome of Appeals and requests for extension are insolvency proceedings, well-functioning included insolvency systems can facilitate access to finance, Cost required to recover debt (% of debtor’s save more viable businesses and thereby improve estate) growth and sustainability in the economy overall. Measured as percentage of estate value What do the indicators cover? Court fees Doing Business studies the time, cost and outcome Fees of insolvency administrators of insolvency proceedings involving domestic entities. It does not measure insolvency Lawyers’ fees proceedings of individuals and financial Assessors’ and auctioneers’ fees institutions. The data are derived from survey Other related fees responses by local insolvency practitioners and verified through a study of laws and regulations as Outcome well as public information on bankruptcy systems. Whether business continues operating as a The ranking on the ease of resolving insolvency is going concern or business assets are sold based on the recovery rate, which is recorded as piecemeal cents on the dollar recouped by creditors through Recovery rate for creditors (cents on the reorganization, liquidation or debt enforcement dollar) (foreclosure) proceedings. The recovery rate is a Measures the cents on the dollar recovered function of time, cost and other factors, such as by creditors lending rate and the likelihood of the company continuing to operate. Present value of debt recovered To make the data comparable across economies, Official costs of the insolvency proceedings Doing Business uses several assumptions about the are deducted business and the case. It assumes that the Depreciation of furniture is taken into company: account  Is a domestically owned, limited liability Outcome for the business (survival or not) company operating a hotel. affects the maximum value that can be recovered  Operates in the economy’s largest business city.  Has 201 employees, 1 main secured  Has a higher value as a going concern—and creditor and 50 unsecured creditors. the efficient outcome is either reorganization or sale as a going concern, not piecemeal liquidation. Doing Business 2014 India 102 RESOLVING INSOLVENCY Where does the economy stand today? Speed, low costs and continuation of viable businesses piecemeal sale. The average recovery rate is 25.6 cents characterize the top-performing economies. How on the dollar. efficient are insolvency proceedings in India? Globally, India stands at 121 in the ranking of 189 According to data collected by Doing Business, economies on the ease of resolving insolvency (figure resolving insolvency takes 4.3 years on average and 11.1). The rankings for comparator economies and the costs 9% of the debtor’s estate, with the most likely regional average ranking provide other useful outcome being that the company will be sold as benchmarks for assessing the efficiency of insolvency proceedings in India. Figure 11.1 How India and comparator economies rank on the ease of resolving insolvency Source: Doing Business database. Doing Business 2014 India 103 RESOLVING INSOLVENCY What are the changes over time? The benchmarks provided by the economies that over possible in improving the efficiency of insolvency time have had the best performance regionally or proceedings. And changes in regional averages can globally on the time or cost of insolvency proceedings show where India is keeping up—and where it is falling or on the recovery rate (figure 11.2) help show what is behind. Figure 11.2 Has resolving insolvency become easier over time? Time (years) Cost (% of estate) Doing Business 2014 India 104 RESOLVING INSOLVENCY Recovery rate (cents on the dollar) Note: DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB2013 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. “No practice” indicates that in each of the previous 5 years the economy had no cases involving a judicial reorganization, judicial liquidation or debt enforcement procedure (foreclosure). This means that creditors are unlikely to recover their money through a formal legal process (in or out of court). The recovery rate for “no practice” economies is 0. Regional averages on time and cost exclude economies with a “no practice” mark. Source: Doing Business database. Doing Business 2014 India 105 RESOLVING INSOLVENCY A well-balanced bankruptcy system distinguishes change. Many recent reforms of bankruptcy laws have companies that are financially distressed but been aimed at helping more of the viable businesses economically viable from inefficient companies that survive. What insolvency reforms has Doing Business should be liquidated. But in some insolvency systems recorded in India (table 11.1)? even viable businesses are liquidated. This is starting to Table 11.1 How has India made resolving insolvency easier—or not? By Doing Business report year DB year Reform DB2009 No reform as measured by Doing Business. India has eased the process of closing a business by making DB2010 processes more effective thus reducing time needed. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2014 India 106 EMPLOYING WORKERS Doing Business measures flexibility in the regulation of employing workers methodology proposed by the employment, specifically as it affects the hiring and consultative group are available on the Doing Business redundancy of workers and the rigidity of working website (http://www.doingbusiness.org). The data on hours. Over the period from 2007 to 2011 employing workers are based on a detailed survey of improvements were made to align the methodology employment regulations that is completed by local for the employing workers indicators with the letter lawyers and public officials. Employment laws and and spirit of the International Labour Organization regulations as well as secondary sources are reviewed (ILO) conventions. Only 4 of the 188 ILO conventions to ensure accuracy. cover areas measured by Doing Business: employee To make the data comparable across economies, termination, weekend work, holiday with pay and night several assumptions about the worker and the work. The Doing Business methodology is fully business are used. consistent with these 4 conventions. The ILO conventions covering areas related to the Employing The worker: Workers indicators do not include the ILO core labor  Earns a salary plus benefits equal to the standards—8 conventions covering the right to economy’s average wage during the entire collective bargaining, the elimination of forced labor, period of his employment. the abolition of child labor and equitable treatment in  Has a pay period that is the most common for workers in the economy. employment practices.  Is a lawful citizen who belongs to the same race and religion as the majority of the Between 2009 and 2011 the World Bank Group worked economy’s population. with a consultative group—including labor lawyers,  Resides in the economy’s largest business city. employer and employee representatives, and experts  Is not a member of a labor union, unless from the ILO, OECD, civil society and the private membership is mandatory. sector—to review the employing workers methodology and explore future areas of research. A i The business:  Is a limited liability company. full report with the conclusions of the consultative  Operates in the economy’s largest business group is available at city. http://www.doingbusiness.org/methodology/employin  Is 100% domestically owned. g-workers.  Operates in the manufacturing sector.  Has 60 employees. This year Doing Business continued research collecting  Is subject to collective bargaining agreements additional data on regulations covering the in economies where such agreements cover probationary period for new employees. more than half the manufacturing sector and apply even to firms not party to them. Doing Business 2014 presents the data on the  Abides by every law and regulation but does not grant workers more benefits than employing workers indicators in an annex. The report mandated by law, regulation or (if applicable) does not present rankings of economies on the collective bargaining agreement. employing workers indicators nor include the topic in the aggregate ranking on the ease of doing business. Detailed data collected on labor regulations and the Doing Business 2014 India 107 EMPLOYING WORKERS What do some of the data show? One of the employing workers indicators is the worker in his or her first job. Doing Business data show difficulty of hiring index. This measure assesses, among the trend in the minimum wage applied by India other things, the minimum wage for a 19-year-old (figure 12.1). Figure 12.1 Has the minimum wage for a 19-year-old worker or an apprentice increased over time? Minimum wage (US$ per month) Note: A horizontal line along the x-axis of the figure indicates that the economy has no minimum wage. Source: Doing Business database. Doing Business 2014 India 108 EMPLOYING WORKERS Employment laws are needed to protect workers from past 5 years did so in ways that increased labor market arbitrary or unfair treatment and to ensure efficient flexibility. What changes did India adopt that affected contracting between employers and workers. Many the Doing Business indicators on employing workers economies that changed their labor regulations in the (table 12.1)? Table 12.1 What changes did India make in employing workers in 2013? DB year Reform DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Source: Doing Business database. Doing Business 2014 India 109 EMPLOYING WORKERS What are the details? The data on employing workers reported here for India public officials. Employment laws and regulations as are based on a detailed survey of employment well as secondary sources are reviewed to ensure regulations that is completed by local lawyers and accuracy. Rigidity of employment index The rigidity of employment index measures 3 areas of labor regulation: difficulty of hiring, rigidity of hours and difficulty of redundancy. Difficulty of hiring index The difficulty of hiring index measures whether fixed- worker. (The average value added per worker is the term contracts are prohibited for permanent tasks; the ratio of an economy’s gross national income per capita maximum cumulative duration of fixed-term contracts; to the working-age population as a percentage of the and the ratio of the minimum wage for a trainee or total population.) first-time employee to the average value added per Difficulty of hiring index Data Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single fixed-term contract (months) No limit Maximum length of fixed-term contracts, including renewals (months) No limit Minimum wage for a 19-year old worker or an apprentice (US$/month) 28.4 Ratio of minimum wage to value added per worker 0.15 Source: Doing Business database. Doing Business 2014 India 110 EMPLOYING WORKERS Rigidity of hours index The rigidity of hours index has 5 components: whether respond to a seasonal increase in production; and there are restrictions on night work; whether there are whether the average paid annual leave for a worker restrictions on weekly holiday work; whether the with 1 year of tenure, a worker with 5 years and a workweek can consist of 5.5 days or is more than 6 worker with 10 years is more than 26 working days or days; whether the workweek can extend to 50 hours or fewer than 15 working days. more (including overtime) for 2 months a year to Rigidity of hours index Data Standard workday in manufacturing (hours) 9 hours 50-hour workweek allowed for 2 months a year in case of a seasonal Yes increase in production? Maximum working days per week 6.0 Premium for night work (% of hourly pay) in case of continuous 0% operations Premium for work on weekly rest day (% of hourly pay) in case of 0% continuous operations Major restrictions on night work in case of continuous operations? No Major restrictions on weekly holiday in case of continuous operations? No Paid annual leave for a worker with 1 year of tenure (in working days) 15.0 Paid annual leave for a worker with 5 years of tenure (in working days) 15.0 Paid annual leave for a worker with 10 years of tenure (in working days) 15.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in 15.0 working days) Source: Doing Business database. Doing Business 2014 India 111 EMPLOYING WORKERS Difficulty of redundancy index The difficulty of redundancy index has 8 components: worker; whether the employer needs approval from a whether redundancy is disallowed as a basis for third party to terminate a group of 9 redundant terminating workers; whether the employer needs to workers; whether the law requires the employer to notify a third party (such as a government agency) to reassign or retrain a worker before making the worker terminate 1 redundant worker; whether the employer redundant; whether priority rules apply for needs to notify a third party to terminate a group of 9 redundancies; and whether priority rules apply for redundant workers; whether the employer needs reemployment. approval from a third party to terminate 1 redundant Difficulty of redundancy index Data Dismissal due to redundancy allowed by law? Yes Third-party notification if 1 worker is dismissed? Yes Third-party approval if 1 worker is dismissed? Yes Third-party notification if 9 workers are dismissed? Yes Third-party approval if 9 workers are dismissed? Yes Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? Yes Priority rules for reemployment? Yes Source: Doing Business database. Doing Business 2014 India 112 EMPLOYING WORKERS Redundancy cost The redundancy cost indicator measures the cost of notice requirements and severance payments advance notice requirements, severance payments and applicable to a worker with 1 year of tenure, a worker penalties due when terminating a redundant worker, with 5 years and a worker with 10 years is used to expressed in weeks of salary. The average value of assign the score. Redundancy cost indicator Data Notice period for redundancy dismissal (for a worker with 1 year of tenure, in salary 4.3 weeks) Notice period for redundancy dismissal (for a worker with 5 years of tenure, in 4.3 salary weeks) Notice period for redundancy dismissal (for a worker with 10 years of tenure, in 4.3 salary weeks) Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years 4.3 of tenure, in salary weeks) Severance pay for redundancy dismissal (for a worker with 1 year of tenure, in 2.1 salary weeks) Severance pay for redundancy dismissal (for a worker with 5 years of tenure, in 10.7 salary weeks) Severance pay for redundancy dismissal (for a worker with 10 years of tenure, in 21.4 salary weeks) Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years 11.4 of tenure, in salary weeks) Source: Doing Business database. Doing Business 2014 India 113 DATA NOTES The indicators presented and analyzed in Doing rounds of verification, leading to revisions or Business measure business regulation and the expansions of the information collected. protection of property rights—and their effect on businesses, especially small and medium-size domestic firms. First, the indicators document the complexity of ECONOMY CHARACTERISTICS regulation, such as the number of procedures to start a business or to register and transfer commercial property. Second, they gauge the time and cost to Gross national income per capita achieve a regulatory goal or comply with regulation, such as the time and cost to enforce a contract, go Doing Business 2014 reports 2012 income per capita through bankruptcy or trade across borders. Third, as published in the World Bank’s World Development they measure the extent of legal protections of Indicators 2013. Income is calculated using the Atlas property, for example, the protections of investors method (current U.S. dollars). For cost indicators against looting by company directors or the range of expressed as a percentage of income per capita, assets that can be used as collateral according to 2012 gross national income (GNI) in U.S. dollars is secured transactions laws. Fourth, a set of indicators used as the denominator. GNI data were not documents the tax burden on businesses. Finally, a set available from the World Bank for Afghanistan, The of data covers different aspects of employment Bahamas, Bahrain, Barbados, Brunei Darussalam, regulation. The 11 sets of indicators measured in Djibouti, the Islamic Republic of Iran, Kuwait, Libya, Doing Business were added over time, and the sample Myanmar, New Zealand, Oman, San Marino, the of economies expanded. Syrian Arab Republic, West Bank and Gaza, and the Republic of Yemen. In these cases GDP or GNP per The data for all sets of indicators in Doing Business 2 capita data and growth rates from other sources, 2014 are for June 2013. such as the International Monetary Fund’s World Economic Outlook database and the Economist Intelligence Unit, were used. Methodology Region and income group The Doing Business data are collected in a standardized way. To start, the Doing Business team, Doing Business uses the World Bank regional and with academic advisers, designs a questionnaire. The income group classifications, available at questionnaire uses a simple business case to ensure http://data.worldbank.org/about/country- classifications. The World Bank does not assign comparability across economies and over time—with regional classifications to high-income economies. assumptions about the legal form of the business, its For the purpose of the Doing Business report, high- size, its location and the nature of its operations. income OECD economies are assigned the “regional” Questionnaires are administered to more than 10,200 classification OECD high income. Figures and tables local experts, including lawyers, business consultants, presenting regional averages include economies accountants, freight forwarders, government officials from all income groups (low, lower middle, upper and other professionals routinely administering or middle and high income). advising on legal and regulatory requirements (table Population 21.2). These experts have several rounds of interaction with the Doing Business team, involving conference Doing Business 2014 reports midyear 2012 calls, written correspondence and visits by the team. population statistics as published in World For Doing Business 2014 team members visited 33 Development Indicators 2013. economies to verify data and recruit respondents. The data from questionnaires are subjected to numerous The Doing Business methodology offers several advantages. It is transparent, using factual information about what laws and regulations say and allowing 2 The data for paying taxes refer to January – December 2012. multiple interactions with local respondents to clarify Doing Business 2014 India 114 potential misinterpretations of questions. Having entrepreneurs reported in the World Bank Enterprise representative samples of respondents is not an issue; Surveys or other perception surveys. Doing Business is not a statistical survey, and the texts This year Doing Business completed subnational of the relevant laws and regulations are collected and studies in Colombia, Italy and the city of Hargeisa answers checked for accuracy. The methodology is (Somaliland) and is currently updating indicators in inexpensive and easily replicable, so data can be Egypt, Mexico and Nigeria. Doing Business also collected in a large sample of economies. Because published regional studies for the g7+ and the East standard assumptions are used in the data collection, African Community. The g7+ group is a country- comparisons and benchmarks are valid across owned and country-led global mechanism established economies. Finally, the data not only highlight the in April 2010 to monitor, report and draw attention to extent of specific regulatory obstacles to business but the unique challenges faced by fragile states. The also identify their source and point to what might be member countries included in the report are reformed. Information on the methodology for each Afghanistan, Burundi, the Central African Republic, Doing Business topic can be found on the Doing Chad, the Comoros, the Democratic Republic of Business website at Congo, Côte d’Ivoire, Guinea, Guinea-Bissau, Haiti, http://www.doingbusiness.org/methodology. Liberia, Papua New Guinea, Sierra Leone, the Solomon Islands, South Sudan, Timor-Leste and Togo. Limits to what is measured The subnational studies point to differences in business regulation and its implementation —as well as The Doing Business methodology has 5 limitations that in the pace of regulatory reform—across cities in the should be considered when interpreting the data. First, same economy. For several economies subnational the collected data refer to businesses in the economy’s studies are now periodically updated to measure largest business city (which in some economies differs change over time or to expand geographic coverage from the capital) and may not be representative of to additional cities. This year that is the case for all the regulation in other parts of the economy. To address subnational studies published. this limitation, subnational Doing Business indicators were created (box 21.1). Second, the data often focus on a specific business form—generally a limited liability company (or its legal equivalent) of a specified Changes in what is measured size—and may not be representative of the regulation The methodology for 2 indicator sets—trading across on other businesses, for example, sole proprietorships. borders and paying taxes—was updated this year. For Third, transactions described in a standardized case trading across borders, documents that are required scenario refer to a specific set of issues and may not purely for purposes of preferential treatment are no represent the full set of issues a business encounters. longer included in the list of documents (for example, Fourth, the measures of time involve an element of a certificate of origin if the use is only to qualify for a judgment by the expert respondents. When sources preferential tariff rate under trade agreements). For indicate different estimates, the time indicators paying taxes, the value of fuel taxes is no longer reported in Doing Business represent the median included in the total tax rate because of the difficulty values of several responses given under the of computing these taxes in a consistent way across all assumptions of the standardized case. economies covered. The fuel tax amounts are in most cases very small, and measuring these amounts is Finally, the methodology assumes that a business has often complicated because they depend on fuel full information on what is required and does not consumption. Fuel taxes continue to be counted in the waste time when completing procedures. In practice, number of payments. completing a procedure may take longer if the business lacks information or is unable to follow up In a change involving several indicator sets, the rule promptly. Alternatively, the business may choose to establishing that each procedure must take at least 1 disregard some burdensome procedures. For both day was removed for procedures that can be fully reasons the time delays reported in Doing Business completed online in just a few hours. This change 2014 would differ from the recollection of affects the time indicator for starting a business, Doing Business 2014 India 115 dealing with construction permits and registering with one another, while the distance to frontier property. For procedures that can be fully completed measure benchmarks economies to the frontier in 3 online, the duration is now set at half a day rather than regulatory practice, measuring the absolute distance to a full day. the best performance on each indicator. Both measures can be used for comparisons over time. The threshold for the total tax rate introduced in 2011 When compared across years, the distance to frontier for the purpose of calculating the ranking on the ease measure shows how much the regulatory environment of paying taxes was updated. All economies with a for local entrepreneurs in each economy has changed total tax rate below the threshold (which is calculated over time in absolute terms, while the ease of doing and adjusted on a yearly basis) receive the same business ranking can show only relative change. ranking on the total tax rate indicator. The threshold is not based on any economic theory of an “optimal tax Ease of doing business rate” that minimizes distortions or maximizes efficiency The ease of doing business index ranks economies in the tax system of an economy overall. Instead, it is from 1 to 189. For each economy the ranking is mainly empirical in nature, set at the lower end of the calculated as the simple average of the percentile distribution of tax rates levied on medium-size rankings on each of the 10 topics included in the index enterprises in the manufacturing sector as observed in Doing Business 2014: starting a business, dealing through the paying taxes indicators. This reduces the with construction permits, getting electricity, bias in the indicators toward economies that do not registering property, getting credit, protecting need to levy significant taxes on companies like the investors, paying taxes, trading across borders, Doing Business standardized case study company enforcing contracts, and resolving insolvency. The because they raise public revenue in other ways—for employing workers indicators are not included in this example, through taxes on foreign companies, through year’s aggregate ease of doing business ranking. taxes on sectors other than manufacturing or from natural resources (all of which are outside the scope of Construction of the ease of doing business index the methodology). This year the threshold is 25,5%. Here is one example of how the ease of doing business index is constructed. In Denmark it takes 4 procedures, 5.5 days and 0.2% of annual income per capita in fees Data challenges and revisions to open a business. The minimum capital requirement Most laws and regulations underlying the Doing is 24% of annual income per capita. On these 4 Business data are available on the Doing Business indicators Denmark ranks in the 12th, 11th, 1st and website at http://www.doingbusiness.org. All the 79th percentiles. So on average Denmark ranks in the sample questionnaires and the details underlying the 25th percentile on the ease of starting a business. It indicators are also published on the website. Questions ranks in the 21st percentile on getting credit, 19th on the methodology and challenges to data can be percentile on paying taxes, 27th percentile on submitted through the website’s “Ask a Question” enforcing contracts, 5th percentile on resolving function at http://www.doingbusiness.org. insolvency and so on. Higher rankings indicate simpler regulation and stronger protection of property rights. Ease of doing business and distance to The simple average of Denmark’s percentile rankings frontier on all topics is 17th. When all economies are ordered Doing Business 2014 presents results for 2 aggregate by their average percentile rankings, Denmark stands measures: the aggregate ranking on the ease of doing at 5 in the aggregate ranking on the ease of doing business and the distance to frontier measure. The business. ease of doing business ranking compares economies More complex aggregation methods—such as 3 For getting electricity the rule that each procedure must take a principal components and unobserved components— minimum of 1 day still applies because in practice there are no yield a ranking nearly identical to the simple average cases in which procedures can be fully completed online in less than a day. For example, even though in some cases it is possible to apply for an electricity connection online, additional requirements mean that the process cannot be completed in less than 1 day. Doing Business 2014 India 116 4 used by Doing Business. Thus, Doing Business uses 58 on enforcing contracts, 116 on dealing with the simplest method: weighting all topics equally and, construction permits and 145 on getting electricity. within each topic, giving equal weight to each of the Variation in performance across the indicator sets is topic components. not at all unusual. It reflects differences in the degree If an economy has no laws or regulations covering a of priority that government authorities give to specific area—for example, insolvency—it receives a particular areas of business regulation reform and the “no practice” mark. Similarly, an economy receives a ability of different government agencies to deliver “no practice” or “not possible” mark if regulation exists tangible results in their area of responsibility. but is never used in practice or if a competing Distance to frontier measure regulation prohibits such practice. Either way, a “no practice” mark puts the economy at the bottom of the A drawback of the ease of doing business ranking is ranking on the relevant indicator. that it can measure the regulatory performance of economies only relative to the performance of others. The ease of doing business index is limited in scope. It It does not provide information on how the absolute does not account for an economy’s proximity to large quality of the regulatory environment is improving markets, the quality of its infrastructure services (other over time. Nor does it provide information on how than services related to trading across borders and large the gaps are between economies at a single getting electricity), the strength of its financial system, point in time. the security of property from theft and looting, macroeconomic conditions or the strength of The distance to frontier measure is designed to underlying institutions. address both shortcomings, complementing the ease of doing business ranking. This measure illustrates the Variability of economies’ rankings across topics distance of an economy to the “frontier,” and the Each indicator set measures a different aspect of the change in the measure over time shows the extent to business regulatory environment. The rankings of an which the economy has closed this gap. The frontier is economy can vary, sometimes significantly, across a score derived from the most efficient practice or indicator sets. The average correlation coefficient highest score achieved on each of the component between the 10 indicator sets included in the indicators in 10 Doing Business indicator sets aggregate ranking is 0.38, and the coefficients (excluding the employing workers indicators) by any between any 2 sets of indicators range from 0.18 economy. In starting a business, for example, Canada (between getting electricity and getting credit) to 0.58 and New Zealand have achieved the highest (between trading across borders and resolving performance on the number of procedures required (1) insolvency and between trading across borders and and on the time (0.5 days), Denmark and Slovenia on getting electricity). These correlations suggest that the cost (0% of income per capita) and Chile, Zambia economies rarely score universally well or universally and 99 other economies on the paid-in minimum badly on the indicators. capital requirement (0% of income per capita) (table 22.2). Consider the example of Canada. It stands at 19 in the aggregate ranking on the ease of doing business. Its Calculating the distance to frontier for each economy ranking is 2 on starting a business, 4 on protecting involves 2 main steps. First, individual indicator scores investors, and 8 on paying taxes. But its ranking is only are normalized to a common unit: except for the total tax rate, each of the 31 component indicators y is rescaled to (max − y)/(max − min), with the minimum 4 See Simeon Djankov, Darshini Manraj, Caralee McLiesh and Rita Ramalho, “Doing Business Indicators: Why Aggregate, and How to value (min) representing the frontier—the highest Do It” (World Bank, Washington, DC, 2005). Principal components performance on that indicator across all economies and unobserved components methods yield a ranking nearly since 2003 or the first year the indicator was collected. 5 identical to that from the simple average method because both these methods assign roughly equal weights to the topics, since the For the total tax rate, consistent with the calculation of pairwise correlations among indicators do not differ much. An alternative to the simple average method is to give different weights to the topics, depending on which are considered of more or less 5 Even though scores for the distance to frontier are calculated from importance in the context of a specific economy. 2005, data from as early as 2003 are used to define the frontier Doing Business 2014 India 117 the rankings, the frontier is defined as the total tax rate Economies that improved the most across 3 or at the 15th percentile of the overall distribution of more Doing Business topics in 2012/13 total tax rates for all years. Second, for each economy Doing Business 2014 uses a simple method to calculate the scores obtained for individual indicators are which economies improved the most in the ease of aggregated through simple averaging into one doing business. First, it selects the economies that in distance to frontier score, first for each topic and then 2012/13 implemented regulatory reforms making it across all topics. An economy’s distance to frontier is easier to do business in 3 or more of the 10 topics indicated on a scale from 0 to 100, where 0 represents included in this year’s ease of doing business ranking. 6 the lowest performance and 100 the frontier. Twenty-nine economies meet this criterion: Azerbaijan, The maximum (max) and minimum (min) observed Belarus, Burundi, Côte d’Ivoire, Croatia, Djibouti, values are computed for all economies included in the Gabon, Guatemala, Guinea, Italy, Kosovo, Latvia, the Doing Business sample since 2003 and for all years former Yugoslav Republic of Macedonia, Malaysia, (from 2003 to 2013). To mitigate the effects of extreme Mauritius, Mexico, Moldova, Mongolia, Morocco, outliers in the distributions of the rescaled data (very Panama, the Philippines, the Republic of Congo, few economies need 694 days to complete the Romania, the Russian Federation, Rwanda, Sri Lanka, procedures to start a business, but many need 9 days), Ukraine, Uzbekistan and the United Arab Emirates. th the maximum (max) is defined as the 95 percentile of Second, Doing Business sorts these economies on the the pooled data for all economies and all years for increase in their distance to frontier measure from the each indicator. The exceptions are the getting credit, previous year using comparable data. protecting investors and resolving insolvency Selecting the economies that implemented regulatory indicators, whose construction precludes outliers. In reforms in at least 3 topics and improved the most in addition, the cost to export and cost to import for each the distance to frontier measure is intended to year are divided by the GDP deflator, so as to take the highlight economies with ongoing, broadbased reform general price level into account when benchmarking programs. The criterion for identifying the top these absolute-cost indicators across economies with improvers was changed from last year. The different inflation trends. The base year for the deflator improvement in ease of doing business ranking is no is 2013 for all economies. longer used. The improvement in the distance to The difference between an economy’s distance to frontier measure is used instead because under this frontier score in any previous year and its score in measure economies are sorted according to their abs- 2013 illustrates the extent to which the economy has olute improvement instead of relative improvement. closed the gap to the frontier over time. And in any given year the score measures how far an economy is from the highest performance at that time. Take Colombia, which has a score of 70.5 on the distance to frontier measure for 2014. This score indicates that the economy is 29.5 percentage points away from the frontier constructed from the best performances across all economies and all years. Colombia was further from the frontier in 2009, with a score of 66.2. The difference between the scores shows an improvement over time. The distance to frontier measure can also be used for comparisons across economies in the same year, complementing the ease of doing business ranking. For example, Colombia stands at 63 this year in the ease of doing business ranking, while Peru, which is 6 Doing Business reforms making it more difficult to do business are 29.3 percentage points from the frontier, stands at 42. subtracted from the total number of those making it easier to do business. Doing Business 2014 India 119 RESOURCES ON THE DOING BUSINESS WEBSITE Current features Doing Business reforms News on the Doing Business project Short summaries of DB2014 business regulation http://www.doingbusiness.org reforms, lists of reforms since DB2008 and a ranking simulation tool Rankings http://www.doingbusiness.org/reforms/ How economies rank—from 1 to 189 http://www.doingbusiness.org/rankings/ Historical data Customized data sets since DB2004 Data http://www.doingbusiness.org/custom-query/ All the data for 189 economies—topic rankings, indicator values, lists of regulatory procedures and Law library details underlying indicators Online collection of business laws and regulations http://www.doingbusiness.org/data/ relating to business and gender issues http://www.doingbusiness.org/law-library/ Reports http://wbl.worldbank.org/ Access to Doing Business reports as well as subnational and regional reports, reform case Contributors studies and customized economy and regional More than 10,200 specialists in 189 economies profiles who participate in Doing Business http://www.doingbusiness.org/reports/ http://www.doingbusiness.org/contributors/doing- business/ Methodology The methodologies and research papers Entrepreneurship data underlying Doing Business Data on business density for 139 economies http://www.doingbusiness.org/methodology/ http://www.doingbusiness.org/data/exploretopics/e ntrepreneurship Research Abstracts of papers on Doing Business topics and Doing Business iPhone App related policy issues Doing Business at a Glance App presents the full http://www.doingbusiness.org/research/ report, rankings and highlights http://www.doingbusiness.org/specialfeatures/ iphone Doing Business 2014 India 120