Longest to start a business in India: WB survey
By Our Economy Bureau | 23 Oct 2004
New
Delhi: A joint survey by the World Bank and the
Confederation of Indian Industry (CII) states that it
takes 89 days to start a business in India, as opposed
to 2 days in Australia, 5 in the US and 41 in China.
This is mainly due to the inspector `raj' that is still
all pervasive despite extensive measures taken to eradicate
it in the past decade.
The World Bank-CII survey also says access to reliable
electric power at reasonable rates is the single most
significant constraint facing Indian businesses.
Businessmen in India typically face other major constraints
like power outages, inadequate credit facilities from
banks and have to spend inordinate time in dealing with
government officials.
Michael F Carter, World Bank India, country director
speaking at the OECD-Global Forum on International Investment
in Delhi, said manufacturers in India face almost 17
major power outages per month against one in Malaysia
and less than five in China.
As a result about 9 per cent of the total value of output
of firms is lost due to power breakdowns — compared
to 2.6 per cent in Malaysia and 2 per cent in China.
Hence India's real cost of power is 74 percent higher
than Malaysia and 39 per cent higher than China's he
said.
He said that the frequency and average duration of outages
are so great that businesses routinely use generators
as any standard industrial equipment in India. 61 per
cent of Indian manufacturing firms own generator sets
versus 20 per cent in Malaysia, 27 per cent in China
and 17 per cent in Brazil, he said.
Apart
from this only 54 per cent of small businesses in India
have access to bank credit against Brazil's 75 per cent.
A great deal of time at about 14.2 per cent of senior
management time is spent in dealing with the state government
officials for various regulatory issues versus 8.1 percent
in China and 7.78 per cent in Brazil according to Carter.