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For a different yardstick: on 'Doing Business' report

  • 15 September, 2020

  • 5 Min Read

For a different yardstick: on 'Doing Business report


  • The article examines the need to revamp the World Bank’s ‘Doing Business’ survey to make it more comprehensive.
  • The World Bank has decided to halt its annual ‘Doing Business’ report on data authenticity issues.

‘Doing Business’ index:

  • The doing business index estimates the cost to business from regulations. Erratic procedures and delays hamper business in India and simplifying procedures brings economic benefits.
  • The survey assumes that lower tax rates are best and it supports lighter rules and regulations to encourage shifts from informal to formal sectors.


  • The desire for better ranking in the index has encouraged countries to even slash down vital regulations which could have a detrimental impact in the long run.
  • There are concerns that the index sidesteps the societal costs of deregulating pollution, worker safety, and health risks.
  • Countries like Brazil, India, and the U.S. have slashed environmental standards which are making significant contributions to climate change and threatening ecological stability.
  • Brazil has been opening up the pristine Amazon forests for developmental activities.
  • India is considering an Environment Impact Assessment with dilutions to the existing environmental law.
  • There has been the watering down of effluent benchmarks for power plants and automobiles and the production of fossil fuels like oil and shale gas have witnessed a boom in the U.S.
  • Despite the unsustainability of these economic policies, these countries have exhibited higher ranking in the doing business rankings.
  • China and India improved their scores sharply in 2019 and 2020 editions of the doing business ranking, though these countries continue to be among the largest emitters of carbon effluents.
  • The Environmental Performance Index ranked China 120, and India 168, out of 180 countries.

Worker safety:

  • Slack business safeguards may prove to be detrimental to worker safety.
  • The 2013 collapse of the Rana Plaza garment factory in Bangladesh, the second deadliest industrial accident resulted from lackadaisical factory regulation.

Labour rights:

  • The states have been relaxing the labour laws to help attract higher private investment in their economies.
  • However, the states seem to be neglecting workers’ well-being while considering changes to labour laws.

Neglect of vital indicators:

  • The survey neglects indicators like capital availability, availability of skilled workforce, infrastructure availability and entrepreneurship support systems which are as important as the other parameters in the doing business index.

Way forward:

  • The doing business index needs a total revamp wherein aspects such as safety standards, labour rights and environmental performance also find a provision.

Source: TH


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