According to an annual World Bank report called Doing Business, Poland was found to be the top riser in the implementation of 201 regulatory reforms which have helped reduce the difficulty of doing business in the country. Poland achieved this by cutting down a lot of red tape and simplifying process. Here is a report on where India stands in comparison to Poland and how it can learn from the success of the latter.
. Ease of Doing Business Rank
Ranking: 55 (Poland), 132 (India)
What India needs to do:
Make a lot of drastic changes to make doing business in India lucrative and profitable for people.
. Starting a Business
Poland’s ranking: 124
In Poland it takes 32 days and 6 procedures to start a business. The average legal/procedural fee is of 14.4% income per capita and you need to have 13.0% of income per capita in the bank.
India’s ranking: 173
In India, it takes 27 days and 12 procedures to start a business. The average legal/procedural fee is 49.8% of income per capita and you need to have 140.1% of income per capita in the bank.
What India needs to do:
India needs to cut down the number of procedures and costs of starting a business.
. Dealing with Construction Permits
Poland’s ranking: 161
In Poland it takes 301 days and 29 procedures to deal with construction permits and it costs 49.4 % of income per capita.
India’s ranking: 182
In India, it takes 196 days and 32 procedures to deal with construction permits and it costs 1,528% of income per capita.
What India needs to do:
Simplify the procedure and reduce cost.
. Getting Electricity
Poland’s ranking: 137
In Poland it takes 186 days and 6 procedures to get electricity and it costs 208.3% of income per capita.
India’s ranking: 105
In India, it takes 67 days and 7 procedures to get electricity and it costs 247.3 % of income per capita.
What India needs to do:
Reduce procedures and costs.
. Registering Property
Poland’s ranking: 62
In Poland, it takes 54 days and 6 procedures to register property and costs 0.4% of the property value
India’s ranking: 94
In India, it takes 44 days and 5 procedures to register property and it costs 7.3% of property value.
What India needs to do:
Drastically reduce the cost of registering property.
. Getting Credit
Poland’s ranking: 4
On the strength of legal rights index, Poland gets a 9 out of 10 and a perfect 6 on the depth of credit information index. There is no public registry coverage though 76.9% of adults have a credit history with private bureaus.
India’s ranking: 23
On the strength of legal rights index, India gets 8 out of 10 and 5 on the depth of credit information index out of 6. There is no public registry coverage and 14.9% of adults have a credit history with private bureaus.
What India needs to do:
Improve laws on legal right protection and create a system to provide better credit history to lenders.
. Protecting Investors
Poland’s ranking: 49
On the index measuring transparency of transactions, Poland gets 7 out of 10. On the index measuring director liability, Poland gets 2 out of 10. On the index measuring shareholders’ ability to sue directors and officers for misconduct, Poland gets 9 out of 10. On the strength of investor protection index , Poland gets 6 out of 10.
India’s ranking: 49
On the index measuring transparency of transactions, India gets 7 out of 10. On the index measuring director liability, India gets 4 out of 10. On the index measuring shareholders’ ability to sue directors and officers for misconduct, India gets 7 out of 10. On the strength of investor protection index , India gets 6 out of 10.
What India needs to do:
India needs to make laws to make transactions more transparent, increase directors’ liability, provide more protection to shareholders and investors.
. Paying Taxes
Poland’s ranking: 114
In Poland, a business needs to pay 18 taxes on the whole and it takes 286 hours per year to prepare, file and pay them. The profit tax in Poland stands at 17.4% of profits, labor tax and contributions stands at 23.8 % while other taxes stand at 2.6% of profit. The total tax rate stands at 43.8% of the profit.
India’s ranking: 152
In India, a business needs to pay 33 takes on the whole and it takes 243 hours per year to prepare, file and pay them. The profit tax in India stands at 24.6% of profits, labor tax and contributions stands at 18.2% while other taxes stand at 19.0% of profit. The total tax rate stands at 61.8% of the profit.
What India needs to do:
Streamline the number of taxes to be paid and reduce the amount of tax on profits to make doing business more lucrative.
. Trading Across Borders
Poland’s ranking: 50
In Poland, you need 5 documents and 17 days to export. Per container, it costs USD1,050 to export. You need 5 documents and 16 days to import. Per container, it costs USD1,025 to import.
India’s ranking: 127
In India, you need 9 documents and 16 days to export. Per container, it costs USD1,120 to export. You need 11 documents and 20 days to import. Per container, it costs USD1,200 to import.
What India needs to do:
Reduce paperwork in import and export, reduce costs per container and the days it takes for the formalities to be completed.
. Enforcing Contracts
Poland’s ranking: 56
In Poland, it takes 685 days to enforce a contract and you need to pay 19.0 % of claim in court fees and attorney fee. There are 33 procedures involved.
India’s ranking: 184
In India, it takes 1,420 days to enforce a contract and you need to pay 39.6% of claim in court fees and attorney fee. There are 46 procedures involved.
What India needs to do:
Reduce the time it takes to enforce a contract, reduce fees and procedures.
. Resolving Insolvency
Poland’s ranking: 37
It costs 15% of the estate and it takes 3 years in Poland to resolve insolvency. Insolvency is resolved as going concern with investors receiving 54.5 cents on the dollar as recovery.
India’s ranking: 116
It costs 9% of the estate and it takes 4.3 years in India to resolve insolvency. Insolvency is resolved as piecemeal sale with investors receiving 26.0 cents on the dollar as recovery.
What India needs to do:
Simplify the process of resolving insolvency
