The Hindu : Karnataka / Bangalore News : Doing business not so easy in Bangalore

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Friday, Jul 10, 2009
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Karnataka

Karnataka - Bangalore

Doing business not so easy in Bangalore

Nagesh Prabhu

World Bank report ranks city 13th among 17 select cities

Starting a business is fastest in Mumbai
and Noida
In Bangalore, 13 procedures have to be completed to register a firm

BANGALORE: Doing business is not so easy in Bangalore and it takes at least 40 days to complete procedures and register a firm.

A World Bank Report on “Doing Business in India -2009” ranked Bangalore 13th among 17 select cities. Doing business was easier in Ludhiana, Hyderabad, and Bhubaneswar and these cities respectively ranked first, second and third.

It was difficult to start the business in Bangalore (13th), Patna (14th), Chennai (15th), Kochi (16th), and Kolkata (17th).

“Starting a business is fastest in Mumbai and Noida, at 30 days, while it takes 41 in Kochi.”

In Bangalore, 13 procedures have to be completed to register a firm and it takes 40 days while it was 33 days in Hyderabad with 12 procedures.

The number of procedures to formally open a business ranges from 11 to 13, of which eight are national in nature and similar in all cities.

The time required to start a business varied among cities due to different local practices and different performance levels of the local branches of national agencies, it said.

In Patna, Kolkata, and Bhubaneswar, entrepreneurs spend less than 40 per cent of income per capita to open a business; for those in Bangalore (64.7) and Mumbai (70.9), the cost is double because of local government fees and taxes, the bank said.

The report compared business regulations in the 17 cities, focussing on local regulations that affect seven stages in the life of a small or mid-sized domestic enterprise — starting a business, dealing with construction permits, registering property, paying taxes, trading across borders, enforcing contracts, and closing a business.

The selected cities are Ludhiana Mumbai, Hyderabad, Indore, Bhubaneshwar, Noida, Gurgaon, Bangalore, Ahmedabad, Patna, New Delhi, Chennai, Jaipur, Kochi, Guwahati, Kolkata and Ranchi.

Construction

The process to obtain construction-related permits and clearances was easiest in Bangalore, Chennai and Hyderabad, where 15 procedures are required, but more cumbersome in Kolkata and Mumbai, where more than 30 procedures were needed.

Entrepreneurs pay 15 per cent of income per capita in Bangalore to register under the Shops and Establishments Act, but pay nothing in Chennai.

Registration

Cities in India do well on the number of procedures required to register property — on average, only five procedures are needed, the report said this performance ranked the average Indian city at 47th out of 181 economies.

The Jaipur city takes least number of days (24) to register a property.

The number of days required for registration of property in Bangalore is 28 days, Hyderabad 37, Chennai 48 and Bhubaneshwar 126 days, the report said.

The number of procedures required to register the property in Bangalore, Ahmedabad, Hyderabad, Indore, Jaipur, Kolkata, Mumbai, New Delhi, Noida, Patna, and Ranchi is five while Chennai required highest number (seven), the report said.

“Reforms that cut red tape, clarify property rights, and streamline regulatory compliance, can yield big payoff for firms and workers,” the study said which was conducted in collaboration with the Union Commerce Ministry and Confederation of Indian Industry.

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