Ease of Doing Business Index (Discontinued but Historically Asked)
International Relations & Places in News › International Reports, Indices and Rankings · Topic 11.5
The Ease of Doing Business Index was an annual ranking of countries on the regulatory environment for domestic firms, published by the World Bank Group in its Doing Business report from 2003 to 2020. It ranked economies on indicators such as starting a business, getting construction permits, getting electricity, registering property, getting credit, paying taxes and resolving insolvency. The World Bank discontinued the report in September 2021 after an investigation found data irregularities in the 2018 and 2020 editions. India's rank rose from 142nd in 2014 to 63rd in the 2020 edition, which is why the index is still asked in the examination.
5 min read · UPSC Prelims · International Relations · International Reports, Indices and Rankings
At a Glance
- Publisher World Bank Group
- Years 2003 to 2020 (DB2020)
- India’s best 63rd of 190 (Doing Business 2020)
- Discontinued 16 September 2021
- Successor Business Ready (B-READY)
- Exam link UPSC Prelims, International Relations: International Reports, Indices and Rankings
Where Does It Fit?
This is the fifth topic of the macro on international reports, indices and rankings. The index is no longer published, but India’s climb in it is a stock example in questions on economic reforms. Previous topic: Corruption Perceptions Index – Transparency International. Next topic: Global Innovation Index.
What Did the Index Measure?
- Ten areas: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
- Method: the World Bank asked local experts about typical cases in the largest business city, and sometimes the second largest, of each economy. Each indicator measured time, cost and procedures.
- Ranking: countries were ranked by the distance to frontier, a score showing how close an economy is to the best practice on each indicator.
- Scope: it measured rules and procedures, not factors like corruption, the quality of infrastructure, skills or macroeconomic stability.
- Coverage: 190 economies in the 2020 edition.
How Did India Perform and Why Was It Stopped?
| Item | Detail |
|---|---|
| India’s climb | India was 142nd in the 2015 edition, 130th in 2017, 100th in 2018, 77th in 2019 and 63rd in 2020. The government set a goal of reaching the top 50 |
| Reforms credited | The Insolvency and Bankruptcy Code, GST, single-window clearances, online filings for company registration and construction permits, and easier electricity connections |
| Irregularities | In 2020 the Bank found that data in the 2018 and 2020 editions had been changed for China, Saudi Arabia, the UAE and Azerbaijan, after external pressure |
| Discontinuation | The Bank halted the report in September 2021 and said it would build a new approach |
| Review of India | A later review did not change India’s reported position but the whole series lost credibility |
| Successor | The Business Ready, B-READY, report measures regulations, public services and efficiency, covering a wider set of topics. The first report in 2024 covered 50 economies and India was not in the first group |
What Else Should You Remember About Business Reforms?
- DPIIT’s role: India’s Department for Promotion of Industry and Internal Trade coordinated the reform drive through the Business Reform Action Plan for states.
- State ranking: states were ranked on the Business Reform Action Plan, in which Andhra Pradesh and Gujarat were often at the top.
- Related policies: Make in India, Startup India, the corporate tax cut of 2019 and production-linked incentives.
- Jan Vishwas: laws to decriminalise minor offences in business laws, passed in 2023, aim to reduce compliance burden.
- Insolvency reform: the Insolvency and Bankruptcy Code of 2016 created a time-bound process for resolving stressed firms and raised India’s score on the resolving insolvency indicator sharply.
- Taxes and trade: the Goods and Services Tax of 2017 and electronic customs procedures cut compliance time for paying taxes and trading across borders.
- Weak areas: enforcing contracts remained India’s worst indicator, with ranks near 160, because court delays are long.
- Other measures: the Logistics Performance Index and the Global Competitiveness reports offer other views of business climate.
Why Does It Matter and What Are the Debates?
- Policy signal: the ranking pushed governments to simplify rules, and India’s improvement helped to attract investment.
- Integrity of data: the manipulation episode shows the risks of ranking-driven policy and the importance of independent data.
- Narrow focus: the index ignored issues like labour, environment and informal firms, so doing business well on paper did not mean ease in practice.
- Quality over rank: experts say the focus should shift to outcomes such as investment and jobs, and to enforcement of contracts, where India’s record is slower, as in Corruption Perceptions Index – Transparency International.
- New measures: B-READY gives a broader view, and India will need to adapt to it when it is included.
As an analytical point, India’s reform effort between 2014 and 2020 was real, but the rank was only one measure of it. The lasting gains lie in the bankruptcy code, tax simplification and digital filing systems.
Why Is This Topic Important?
- Facts Publisher and rank asked
- History Why discontinued
- Successor B-READY
What Came Next?
The next topic covers the Global Innovation Index. Next topic: Global Innovation Index.
Key People and Terms
- DB Doing Business report
- Distance to frontier Score versus best practice
- B-READY Business Ready report
- BRAP Business Reform Action Plan
- IBC Insolvency and Bankruptcy Code
- Single window One-stop clearance
Exam Corner
Points to Remember
- Published by the World Bank, 2003 to 2020.
- India: 142nd (2015) to 63rd (2020).
- Discontinued in September 2021.
- Reason: data irregularities.
- Successor: B-READY.
Do Not Confuse With
- EoDB and B-READY Old discontinued report versus its successor
- National and state rankings World Bank rank versus BRAP state ranking
- Rank and distance to frontier Relative position versus absolute score
Memory Hook
Two thousand three began, twenty-one stopped; one-forty-two to sixty-three, data bent and the report dropped; B-READY took the lead.
Mains Angle
Questions ask about business reforms and indices. These points add depth.
- Climb Reforms behind it
- Fall Data integrity
- Next B-READY
A Question You May Face
An original practice question, not a past paper question.
“Discuss the reforms behind India’s improvement in the Ease of Doing Business ranking and the lessons from the report’s discontinuation.”
How to Answer
- Index Indicators.
- India Rank and reforms.
- End Irregularities.
- Lessons Outcomes over rank.
GS Relevance
Frequently Asked Questions
What was the Ease of Doing Business Index?
The Ease of Doing Business Index was a World Bank ranking of 190 economies on the ease of starting and running a business, based on ten areas such as starting a business, getting credit and paying taxes. It was published from 2003 to 2020 in the Doing Business report.
Why was the Ease of Doing Business report discontinued?
The World Bank discontinued the Doing Business report in September 2021 after an investigation found that data for China, Saudi Arabia, the United Arab Emirates and Azerbaijan had been changed in the 2018 and 2020 editions, following pressure on staff, which damaged the credibility of the ranking.
What was India's best rank in the Ease of Doing Business Index?
India's best rank was 63rd out of 190 economies in the Doing Business 2020 report, up from 142nd in the 2015 edition. The jump reflected reforms such as the Insolvency and Bankruptcy Code, GST, and online systems for registrations and permits.
What has replaced the Ease of Doing Business Index?
The World Bank has replaced it with the Business Ready report, called B-READY, which looks at regulation, public services and the operational efficiency of the business environment. The first report in 2024 covered 50 economies, and India was not among them.
What was the Business Reform Action Plan?
The Business Reform Action Plan is an annual exercise of the Department for Promotion of Industry and Internal Trade that ranks Indian states on the implementation of business reforms. It encouraged competition among states to improve their business climate and supported India's national ranking.
PYQ Practice — Statement Analysis
1 The Ease of Doing Business report is still published by the World Bank.
It was discontinued in 2021.
2 India ranked 63rd in the Doing Business 2020 report.
Up from 142nd earlier.
3 The index measured ten areas of business regulation.
From starting a business to insolvency.
4 B-READY replaced the Doing Business report.
The first edition appeared in 2024.
Past Mains Questions on This Topic
This topic comes under International Reports, Indices and Rankings. UPSC Mains questions asked on the matching syllabus topic, year-wise with marks:
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