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South Asia region made gains to improve ease of doing business for MSMEs

“The reforms in India included streamlining the process of obtaining a building permit and improved building quality controls. The reform applies to both Delhi and Mumbai, the two cities covered by the Doing Business report. Starting a Business was made easier through consolidation of multiple application forms and introduction of a Goods and Service Tax (GST), while Getting Electricity was made faster and cheaper. Other reforms in India included strengthening access to credit as well as making it easier and faster to pay taxes and trade across borders.”

 

Doing Business Report 2019:/31/Oct/2018:  Economies in South Asia region made further gains to improve the ease of doing business for domestic small and medium enterprises with Afghanistan and India ranked as top improvers, says the World Bank Group’s Doing Business 2019: Training for Reform report, released on 31 October 2018.

A total of 19 business reforms were carried out in the region during the past year, the second highest ever, compared with previous year’s revised record of 21 reforms.

In a first for South Asia, two of the region’s economies have earned coveted spots in this year’s global top improvers, India and Afghanistan. India, which is a top improver for a second consecutive year, implemented six reforms in the past year and advanced to 77th place in the global ranking. India is now the region’s top-ranked economy. Afghanistan, a top improver for the first time, carried out a record five reforms, moving up to 167th rank.

The reforms in India included streamlining the process of obtaining a building permit and improved building quality controls. The reform applies to both Delhi and Mumbai, the two cities covered by the Doing Business report. Starting a Business was made easier through consolidation of multiple application forms and introduction of a Goods and Service Tax (GST), while Getting Electricity was made faster and cheaper. Other reforms in India included strengthening access to credit as well as making it easier and faster to pay taxes and trade across borders.  

Afghanistan enacted a new insolvency law, which strengthened access to credit and made resolving insolvency easier. Protections for minority investors were strengthened by increasing shareholders’ rights and role in major corporate decisions, clarifying ownership and control structures and requiring greater corporate transparency. Afghanistan also made it easier to pay taxes and start a business.

Pakistan continued its strong reform agenda, with three reforms carried out in the past year. Registering Property was made easier in both Lahore and Karachi, the two cities covered in the Doing Business report. Both cities also introduced reforms to make it easier to resolve insolvencies and register a new business.

Sri Lanka carried out four reforms which included making Dealing with Construction Permits easier, while the introduction of online systems made it easier to pay taxes in Sri Lanka and Bhutan. Sri Lanka advances to a global rank of 100 this year.

Doing Business includes gender dimensions in three indicators: Starting a Business, Registering Property and Enforcing Contracts. It finds that Afghanistan and Pakistan impose additional procedures for female entrepreneurs.

South Asian economies perform best in the areas of Protecting Minority Investors and Starting a Business. For example, it takes on average 14 days to register a new business in the region, compared with 20 days globally.

The region underperforms in the areas of Enforcing Contracts and Registering Property. In South Asia, registering a property takes 114 days, compared to 47 days on average globally. Resolving a commercial dispute in the region takes1102 days on average, almost twice the global average of 647 days.

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