What is Ease of Doing Business?
Historical Background
Key Points
9 points- 1.
World Bank's 'Doing Business' Report: Previously a key global benchmark, it assessed 10-12 areas of business regulation across economies. India significantly improved its ranking from 142 in 2014 to 63 in 2019.
- 2.
Government Focus: Improving EoDB has been a key policy objective of the Indian government, aiming to create a more investor-friendly and business-conducive environment.
- 3.
Objectives: Attract Foreign Direct Investment (FDI), promote domestic entrepreneurship, boost manufacturing (e.g., 'Make in India'), create employment opportunities, and enhance overall economic growth.
- 4.
Key Reforms: Simplification and rationalization of laws, digitalization of government processes, implementation of single-window clearance systems, reduction of compliance burden, and decriminalization of minor economic offenses.
- 5.
Impact on Labour Laws: Often involves reforms to labour laws to provide greater flexibility to employers (e.g., easier hiring and firing, simplified compliance, reduced inspector raj).
- 6.
Criticisms: Sometimes criticized for prioritizing business interests over worker rights, environmental protection, or social welfare, leading to a 'race to the bottom' in regulatory standards.
- 7.
State-level Reforms: States also actively compete to improve their own EoDB rankings, leading to competitive federalism in regulatory reforms.
- 8.
National Single Window System (NSWS): Launched to provide a single digital platform for investors to apply for various approvals and clearances, aiming to reduce time and cost.
- 9.
Ease of Living: The government has also emphasized 'ease of living' as a complementary objective, ensuring that reforms benefit citizens as well.
Recent Developments
5 developmentsDespite the discontinuation of the World Bank's report, the Indian government continues to focus on improving the business environment through ongoing reforms.
Decriminalization of various provisions in company law, limited liability partnership (LLP) act, and other statutes to reduce the burden on businesses.
The new Labour Codes are presented by the government as a major step towards improving EoDB by simplifying complex labour laws and providing greater flexibility to industries.
Continued efforts to digitalize government services and implement single-window systems across various sectors and states.
Focus on reducing the regulatory compliance burden for Micro, Small, and Medium Enterprises (MSMEs) to foster their growth.
This Concept in News
3 topicsRailway Reforms Aim to Boost Start-ups with Easier Access
27 Feb 2026The news highlights the importance of sector-specific reforms in improving the overall ease of doing business. The railway sector, being a critical infrastructure component, often faces bureaucratic delays and complex procedures. The reforms demonstrate how targeted interventions can address these challenges and create a more conducive environment for businesses, particularly start-ups. This news applies the concept of ease of doing business to a specific industry, showcasing how simplifying regulations and processes can foster innovation and efficiency. The development reveals that even within established sectors, there is significant scope for improvement in ease of doing business. The implications of this news are that other sectors could benefit from similar targeted reforms. Understanding ease of doing business is crucial for analyzing this news because it provides a framework for evaluating the effectiveness of the reforms and their potential impact on the railway sector and the broader economy.
PAN Quoting Limit Increased for Cash Deposits and Hotel Bills
10 Feb 2026The news highlights the government's ongoing efforts to improve EODB by simplifying regulations. The relaxation of PAN quoting requirements demonstrates a practical application of the EODB concept. It shows how reducing compliance burdens can make it easier for businesses and individuals to operate. This news reveals that the government is actively listening to feedback and adapting regulations to promote a more business-friendly environment. The implications of this news are positive, as it can lead to increased economic activity and greater participation in the formal economy. Understanding EODB is crucial for analyzing this news because it provides the context for the government's actions. It helps to understand why the government is making these changes and what impact they are expected to have on the economy. Analyzing such news through the lens of EODB helps in understanding the broader economic policy landscape and its impact on businesses and citizens.
Delhi's Business Transformation: From License Raj to Ease of Business
9 Feb 2026The Delhi news highlights the importance of state-level reforms in improving the overall EODB environment in India. It demonstrates how specific initiatives, such as reducing license approval timelines and implementing single-window systems, can significantly impact businesses. This news challenges the notion that EODB is solely a national-level concern. It shows that state governments play a crucial role in creating a business-friendly environment. The news reveals the potential for further improvements in EODB through targeted reforms at the state level. The implications of this news are that other states may follow Delhi's example and implement similar reforms. Understanding EODB is crucial for analyzing this news because it provides a framework for evaluating the effectiveness of the Delhi government's initiatives and their potential impact on the state's economy. It helps in understanding the broader context of economic reforms and their impact on businesses.