WorldBank EoDB2019 The World Bank releases its Ease of Doing Business
ranking before the start of a calendar year. The rankings are based on a
complex scoring process based on reforms carried out during the previous year
and its implementation.
The bank cannot roam around every city of a country. For India for
example, the rankings are based on performance scores of Delhi and Mumbai. In
Bangladesh it is Dhaka and Chittagong and, in China Beijing and Shanghai.
The reason I am mentioning this is, implementation of any reform vastly
differ in a Union of States like India than unitary countries like China or
Bangladesh.
For example, as per Indian Constitution, States have a sizable role to
play in land issues and electricity, both of which finally reflect on the
complexity or simplicity of starting a business, which is a important
denominator in EoDB ranking. Often pace of implementation varies depending on local
work culture.
To cut the long story short, improvement in EoDB ranking is no guarantee
that a businessman will face less trouble seamlessly across the country. Yet,
it surely indicates a trend. Especially when reforms like GST takes place,
which overrides the constitutional complexity to create an uniform taxation
structure across the country. The removal of inter-state check posts and
increasing use of digital platforms by tax authorities are significant game
changers, and duly appreciated by the World Bank.
The latest study which was conducted between June 2017 and May 2018,
ranked India at 77th - 23 steps up from 100th spot in EODB2018. India is now
the first country from South Asia to come this close to the top 50 - a barrier
that is broken by China in EODB2019 list by taking a leap from 78 to 46. It
might give fodder to some Indian analysts may be tempted to belittle our
achievements, but that would be unjustified.
China has initiated reforms a decade ahead of us. Unlike India they didn’t
have to carry the holy cross of electoral democracy (that often works against national
interests) and the Chinese leadership was consistent in maintaining the tempo
of reforms. However, it is the very Chinese growth that has been the inspiration
of India’s economic liberalisation and is now acting as a competitive pressure
to improve.
And, we are improving and at a robust pace for last four years. In
EODB2015 (which was based on performances in 2013-14) India’s ranking dropped
from 134 to 142. And, since then we progressed 65 steps! This is no mean
achievement. Incidentally India is not alone. In South Asia, Thailand is making
fast progresses. Even the sub-Saharan Africa is coming up.
Coming back to India, after coming to power in 2014 Prime Minister Narendra
Modi wanted India to make it to the top 50 in EoDB ranking (from the then 142).
The way ahead was easy. Target each and every area which is measured in this
ranking system. A detailed comparison of India’s score-sheets in EoDB2018 and
EoDB2019 will prove this consistency. For example in both the years India
earned high scores for lowering procedural barriers in cross-border trade. Since international trade is a Central subject,
the pace of implementation was faster.
Going by the 2019 list, we covered two-third way. But I presume, we are
half way through the mark because the relative competitive pressure increases as
you approach the top. The job is therefore half done. But the government
deserves credit for coming so fast, so far.
