India has been shining over the last three years, says a World Bank study.
The study, jointly conducted by the World Bank and the Confederation of Indian Industry, said that India has shown remarkable improvement in its investment climate making it much easier to invest in the country. It will be released on Wednesday.
The reforms process set in motion by India also ensured that the industry fewer regulatory hassles to contend with and could carry on with doing business at ease.
The study is based on a survey of about 1,800 manufacturing units in India.
The study compares India with China and says that on certain parameters India outshone China. However, although the Bank said that India's power situation had improved markedly, it still lagged behind China which had a better, more reliable and cost-beneficial power infrastructure in place.
The CII-World Bank study says that the frequency of inspections of factories and business establishments by government officials had reduced from 11.7 (in 2000) to 7.4 (in 2003).
The number of days taken, at an average, to clear customs in India too dropped from 10.3 to 7.3. In doing so, India sped past China, where it takes an average of 9.8 days to clear customs.
Despite a lot of improvements that India has shown in the last three years, it still remains a more expensive and less efficient business destination when compared with China.
The study says that Indian entrepreneurs still face many obstacles. Chinese entrepreneurs can set up a business in 41 days at a cost of less than eight weeks' income; in India it takes 89 days and costs over six months' income.
The quality of infrastructure in China too is much better, says the study. China's road network has 25,000 km of four or six-lane highways, while India has a 3,000 km.
Power reliability in India too is low: there are an average of 17 power cuts a month in India, five in China and only one in Malaysia, the report says.
India's labour productivity, though rising, is still behind that of China.
Yet the progress shown by India on various indicators was lauded by the World Bank.