Ease of Doing Business (EoDB)

Starting a business is not just about having money or finding customers. Businesses also need to handle registrations, licences, taxes, approvals and other government rules. When these processes are simple and clear, it becomes easier for businesses to start, operate and grow. 

This is the broad idea behind Ease of Doing Business (EoDB). It refers to how effectively a country’s regulatory and institutional system allows businesses to start, operate, comply with rules and exit the market.

For India, EoDB reforms have increasingly focused on reducing unnecessary procedures, moving government services online and making regulatory processes more predictable. The objective is not merely to improve India’s position in global rankings. It is also to reduce the time, cost and uncertainty that businesses face in their day-to-day operations.

Status of Ease of Doing Business in India

India has made progress in several areas of business regulation and digital governance. However, the experience of businesses can still differ considerably across sectors, states and levels of government.

Global Ranking: India was ranked 63rd in the World Bank’s Doing Business 2020 report, an improvement of 79 positions over five years. The World Bank discontinued the Doing Business report after 2020, so this should not be treated as a current ranking.

Business Registrations: The source indicates around 27% growth in business registrations between 2020–21 and 2025–26, suggesting continued expansion in formal business activity.

Why Does Ease of Doing Business Matter?

A business-friendly regulatory environment can influence investment decisions, productivity and employment. Its importance can be seen across several areas.

Investment and Global Trade: Clearer rules and faster procedures can make it easier for businesses to invest and participate in global supply chains. Initiatives such as Production Linked Incentive (PLI) schemes have supported investment in selected manufacturing sectors.

MSME Growth: Smaller businesses often have fewer resources to deal with complex compliance requirements. Platforms such as Udyam Registration and TReDS can help with formalisation and access to working capital.

Better Governance: Digital systems such as faceless tax assessment and the National Single Window System can reduce physical interaction with government departments and make certain processes more transparent.

Employment: Easier entry and expansion can encourage entrepreneurship and create opportunities for employment, particularly in sectors with potential for large-scale job creation.

Lower Business Costs: Improvements in logistics and infrastructure can reduce the time and cost involved in moving goods and accessing markets. Initiatives such as PM Gati Shakti are aimed at improving coordination across infrastructure networks.

Major Challenges

Judicial Delays: Slow resolution of commercial disputes can increase uncertainty and raise the cost of enforcing contracts.

Uneven Impact on Businesses: Large companies generally have greater financial and administrative capacity to adapt to changes such as GST compliance and e-invoicing. Smaller businesses may find these transitions more difficult.

Differences Across States: The pace of reform varies between states. This can affect the ease with which businesses obtain approvals, access infrastructure and comply with local regulations.

Land-Related Issues: Unclear land records, ownership disputes and lengthy acquisition procedures can delay industrial and infrastructure projects.

Skill Gaps: The availability of suitable skills does not always match the requirements of modern industries. This can become a constraint, particularly for labour-intensive manufacturing.

Way Ahead

Faster Dispute Resolution: Strengthening commercial courts and expanding Alternative Dispute Resolution (ADR) can reduce the time and cost involved in settling business disputes.

Local-Level Reforms: The District Business Reform Action Plan (D-BRAP) can take reform closer to businesses by improving processes handled by municipalities and other local authorities.

Better Land Records: Wider adoption of digital land records and the Unique Land Parcel Identification Number (U-PIN) can improve clarity over land ownership and reduce disputes.

Trust-Based Regulation: Minor administrative violations can be dealt with through proportionate penalties rather than criminal proceedings. For smaller businesses, self-certification with risk-based inspections can reduce unnecessary compliance burdens.

Digital Compliance: India’s Digital Public Infrastructure (DPI) can support more integrated, paperless systems for registrations, approvals and regulatory compliance.

B-READY Framework: With the World Bank’s Business Ready (B-READY) framework replacing the earlier Doing Business approach, India will need to focus not only on formal rules but also on how effectively those rules are implemented in practice.

Conclusion

Ease of doing business is ultimately about reducing unnecessary friction between businesses and the government. India has made progress through digital services, regulatory reforms and easier business registration, but challenges remain in areas such as judicial delays, land, skills and uneven implementation.

The focus ahead should therefore be on faster dispute resolution, simpler compliance, stronger local institutions, reliable digital systems and better implementation of existing reforms.

At the same time, making business easier should not mean lowering essential standards. A sustainable business environment needs to balance economic efficiency with labour protection, environmental responsibility and public interest.

Frequently Asked Questions (FAQs)

What is Ease of Doing Business?

It refers to how easily businesses can start, operate, comply with regulations and exit an economy.

What was India’s rank in the Doing Business Report?

India ranked 63rd in the World Bank’s Doing Business 2020 report. The report was discontinued after 2020.

Why is Ease of Doing Business important?

A better business environment can support investment, entrepreneurship, MSME growth, exports and employment.

What are the main EoDB challenges in India?

Key issues include judicial delays, land-related problems, skill gaps and differences in implementation across states.

How can India improve Ease of Doing Business?

Faster dispute resolution, simpler regulations, better land records, stronger local institutions and wider use of digital systems can improve the business environment.