Read the below statements marked as Assertion (A) and Reason (R). Mark the correct options:
Assertion (A): The Global Ease of Doing Business (EoDB) rankings gave maximum weightage to starting a business.
Reason (R): Starting a business was one of the 10 indicators considered.
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. A is false, but R is true.
The World Bank’s Ease of Doing Business (EoDB) index consisted of 10 indicators, including "Starting a Business." However, the assertion that it was given "maximum weightage" is incorrect. The methodology followed an equal weightage principle, where each of the ten indicators, such as Dealing with Construction Permits, Paying Taxes, and Enforcing Contracts, contributed equally to the overall score. While starting a business is a fundamental step, the index aimed to measure the entire lifecycle of a firm, not just its inception.