News APP

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  gplay

Rediff News  All News  » Business » Patna better than Mumbai to start business

Patna better than Mumbai to start business

Last updated on: June 30, 2009 

Image: Vehicular traffic moves on a street in New Delhi.
Photographs: Kamal Kishore/Files/Reuters

This may come as a big surprise to some of you, but a World Bank study says that Patna is ahead of Mumbai when it comes to the ease of starting a business.

According to the World Bank ranking announced on Tuesday, Patna is second only to New Delhi in this regard, but way ahead of Mumbai.

Of the 17 cities that figured in the World Bank and International Finance Corporation's 'Doing Business In India 2009' report. So check out which are the other Indian cities, according to the World Bank, where it is easy to start a business... 

Patna better than Mumbai to start business

Image: A school girl with her face painted in the colours of the Indian national flag holds flags during Independence Day celebrations at a school in Patna.
Photographs: Krishna Murari Kishan/Reuters
Of the 17 cities considered, Patna was ranked 14th, above Chennai, which stood at 15th position, while Kolkata was at the bottom of the list. Mumabi was place 16th, way below many Indian cities.

Starting a business measures the necessary steps to enable a small or medium enterprise in general commercial or industrial activities to operate legally in 17 Indian cities -- including permits, inscriptions, notifications and inspections.

Patna better than Mumbai to start business

Image: An Indian villager takes part in the Kila Raipur sports festival in Ludhiana.
Photographs: Stringer/Reuters
The report further said doing business is the easiest in Ludhiana, followed by Hyderabad, Bhubaneswar, Gurgaon, Ahmedabad, New Delhi, Jaipur and Guwahati.

It is easier to pay taxes in Ludhiana, Jaipur and Noida, while it is difficult to do so in Chennai, Kolkata and Patna. The report ranks the cities based on seven parameters - starting a business, dealing with construction permits, registering property, paying taxes, trading across borders, enforcing contracts and closing a business.

Strangely, the World Bank rankings do not take into account the macroeconomic conditions, infrastructure, workforce skills or security.

Patna better than Mumbai to start business

Image: Labourers work on a billboard in Mumbai.
Photographs: Arko Datta/Reuters
The report said that it is easier to start and operate business in India than it was three years ago in many large cities of the country.

It said starting a business is the fastest in Mumbai and Noida, while in cost terms, business start-up is least expensive in Patna.

Paying taxes records all taxes and mandatory contributions that a medium-sized company must pay as well as measures the administration burden of paying taxes and contributions.

Patna better than Mumbai to start business

Image: Corporate Offices for Ernst & Young located in Gurgaon
Photographs: Morphogenesis/Handout/Reuters

According to the report, that it is the easiest to export and import goods from Bhubaneswar, while it is most difficult from Gurgaon.

The report also said that compared to economies world wide, cities in India lag most in the ease of closing a business and paying taxes.

In India, where more than 90 per cent of jobs are in the informal sector, regulatory reforms can help businesses operate efficiently in the formal sector, it said.

Patna better than Mumbai to start business

Image: Pigeons fly against the backdrop of the historic Charminar monument in Hyderabad.
Photographs: Krishnendu Halder/Reuters
"Reforms that cut red tape, clarify property rights, and streamline regulatory compliance, can yield big payoff for firms and workers," World Bank group financial and private sector development acting vice-president Penelope Brook said in a CII function.