Wednesday, September 16, 2015

Gujarat No 1?: Maharashtra, Tamil Nadu question World Bank ranking, say report is based on "old data"

Maharashtra CM Fadnavis
By Our Representative
The recent World Bank-prepared Government of India-sponsored report placing Gujarat as No 1 state in ease of doing business has rankled several states, considered highly industrial, such as Maharashtra and Tamil Nadu. Reacting sharply, while the Maharashtra government has said it would ask the Centre to recommend to World Bank to "reassess" the ranking (No 8), the Tamil Nadu government has said the report's analysis ranking the state No 12 is "purely a perception-based" and not on "factuals and efficiencies".
Taking exception to the report, Maharashtra's industries minister Subhash Desai has said, “The observations are based on old information. The government has taken a number of reforms, including amendments to the Factories Act, reduction in the number of approvals from 76 to 37, doing away with inspector raj and relaxation in River Regulatory Zone Regulations.”
Among the important investments made in the recent past, the state government has said, include Rs 31,000 crore by Foxconn, which is to set up R&D and manufacturing facility; Rs 6,400 crore by General Motors, which is to to expand its Talegaon facility following the decision to close down its Gujarat unit; Rs by 4,500 crore Blackstone-Panchshil IT park in Navi Mumbai; Rs 1,700 crore by Chrysler to manufacture its marquee brand Grand Cherokee in Pune; and so on.
The state government has further said, Maharashtra has attracted investment intentions worth Rs 60,000 crore over the last one year after the BJP came to power in the state.
“After the Bank takes into account the recent initiatives, Maharashtra will be ranked third,” he added. “Some more reforms are in the pipeline, which, once implemented, will see Maharashtra ranked at first position next year.”
Former chief minister Prithviraj Chavan of the Congress party, has supported the Maharashtra government's saying, the state "is the most desirable destination for foreign investment and also for investment in industry, financial services, information technology and entertainment."
Confederation of Indian Industry’s state council chairman Arup Basu has commented, “Although Maharashtra ranked eight among all Indian states, it ranked the highest in ‘Obtaining infrastructure-related utilities’, with clearly defined time lines for electricity, water and sewage connections, and a reformed electricity connection application process and also in ‘enforcing contracts’."
Questioning the report's content, a Tamil Nadu government spokesperson said, it is surprising that "states such as Tamil Nadu, Maharashtra and Punjab which are more industrialised and investor-friendly, are on the bottom."
The official wondered how the report could compare states such as Jharkhand, Chhattisgarh and north-eastern states with states such as Tamil Nadu, "which has higher penetration of industrialisation than the former lot", adding, "It is unfair that states without even proper roads, power, social security and a decent literacy ratio were compared with Tamil Nadu, which is much better placed in all these parameters."
The official further said, "Tamil Nadu was the first state to implement single-window clearance way back in1995-1996. No state has the record of giving clearances in 12-30 days, which Tamil Nadu has, but no mark was given to this, they pointed out."
"The report is not objective. The World Bank did not look at how effective the systems are in single-window clearances; how labour laws are how inspector raj has been reduced in Tamil Nadu. It is very unfortunate," said the official, adding, "The report was based on how business can access services without any hassle through the internet, but not on what the state has achieved in terms of infrastructure."
Pointing out that Tamil Nadu is the second largest contributor to India’s GDP with 8.4% share, the official said, the state has a 17% share in number of factories in India -- higher than any other state -- with 36,869 units. It has a 16% share in India’s industrial workforce with 16,02,447 workers and ranks 3rd in terms of cumulative FDI inflows ($16 billion from 2000 to 2014), 3rd in terms of invested capital of Rs 2,92,260.06 crore and 3rd in terms of value of total industrial output of Rs 6,19,525.33 crore."
One government which is particularly pleased with the report is West Bengal, trying hard to improve its image in the business community. Ranked at 11, higher than Tamil Nadu and Punjab, the report is being interpreted by the West Bengal government as "a reflection of the small-ticket reforms the state has been undertaking in order to attract investment."
“The state had always carried a baggage of the past. The current government in its initial days did little to change it, but now we feel there is an impetus,” an industrialist has been quoted as saying.
Land will not be a problem in West Bengal. West Bengal Industrial Development Corporation (WBIDC) has 4,400 acres of ready land under its possession for industrial development. This is apart from the land for 6 townships in the state. Another 4,000 acres of land will be made available soon," state finance minister Amit Mitra said.

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