It was another amusing sight to see Indian mandarins, politicians and even economic pundits doing high-fives with gusto to celebrate India’s 23-point jump in the World Bank’s 2018 Ease of Doing Business Index. India zoomed to 77th place pipping Oman and Panama but nestling just behind Uzbekistan, Jamaica and Mongolia. A remarkable achievement indeed considering India ranked 130th in 2012 just falling behind 131st ranked West Bank & Gaza (one country).
While one leading Indian newspaper described the news as a big vindication of the NDA Government, a Stock Market Analyst called it a blockbuster development which would surely shore up international interest in the country.
So what is the World Bank’s ease of doing business index?
According to the Bank, economies are ranked on ten topics – starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency. A high ease of doing business ranking, the Bank surmises, means the regulatory environment is more conducive to the starting and operation of a local firm. Sort of the Mecca for all investors.
When India was rubbing shoulders with war-torn Afghanistan in the bank’s Index List Indian governments dismissed the World Bank’s findings as bunkum. The present government, however, has taken the Bank ranking more seriously and worked to improve on the parameters to get India’s ranking up higher in the list.
Is that very difficult?
Yes and No. No. Because the Bank’s rank is only based on a survey of business and industry in two Indian cities – Delhi and Mumbai. The Bank claims but many may well doubt how authentic and exhaustive the exercise is. The Bank itself has comprehensive footage of words to justify its thoroughness. There are no surprises in what the Bank is looking for and the government can work on policy and procedural improvement in these two cities to win over the Bank.
The second answer is Yes. Because while India can easily scale the Bank Index year on year, the fact remains that the country actually needs to be a place where there is ease of doing business. And that task is difficult but by no means impossible. If we are going to be one of the top economies of the globe and have equitable economic and social development across the country, governments – both at the Centre and in the States – need to work on policy and implementation to ease the present herculean mess of doing business in all parts of the country. And in that sense the 10 areas identified by the World Bank is a good place to start. India today has the manpower, skill and commitment to fast-forward economic growth. What the country has always been waiting for are the right policy makers and administrative action.
Perhaps then we will all be doing High-Fives for the right reasons.
(Mainak De tweets @mainakde)