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World Bank wants you to believe: Delhi, Mumbai doing so well in border trade!

By Rajiv Shah
Today, after I took my morning stroll as part of my daily routine, my search for online news led me a tweet by friend and colleague, whom I have for long considered an honest and sincere journalist, Abhishek Kapoor, currently executive editor, Republic TV. Formerly with Indian Express and Times Now, he loudly, perhaps proudly, proclaimed that India has jumped 14 points in the Ease of Doing Business (EDB) in a World Bank ranking.
Ease of doing business, for some strange reason, has always attracted me. The first time I came across this was in 2004, when a report by Bibek Debroy, a long-time pro-Modi “economist”, and Laveesh Bhandari, came up with a report comparing Indian states in ease of doing business. The report became quite famous, because it was published post-2004 Congress-led UPA victory by the Rajiv Gandhi Foundation, of which Debroy was then a part.
While Gujarat under chief minister Narendra Modi made a big show out of the report, Debroy was, I presume, was forced to resign from Rajiv Gandhi Foundation, chaired as it was by the powerful Gandhi family, This naturally pushed him towards Modi. Gujarat government sources, to whom I had quick access, told me, there was “nothing new” in the report, as Gujarat was always at the top position in providing business – whether it was 1980s or 1990s – even during the turbulent days when Congress was unstable.
Things were then not so easy to access such reports, as there was no possibility of getting them online. I located a senior Ahmedabad-based consultant, known for his objective, honest view of the world, who had its hard copy. I drove down to Ahmedabad from Gandhinagar, where I was stationed as the Times of India man.
After reading through its references, what astounded me was, the figures were all from the year before Modi had come to power: October 2001. So, why was the Congress so upset, and why was Modi so upbeat about it? I wondered. I did a story, which was carried on the front page, much to the chagrin of the then political establishment.
After downloading the World Bank’s EDB report from its site, I decided to read through it, especially closely looking at all that it had to say about India. The report expectedly praises India for making major policy changes, which, it said, placed India among top 10 economies “showing the most notable improvement in performance on the Doing Business indicators in 2017/18” – the other nine being Afghanistan, Djibouti, China, Azerbaijan, Togo, Kenya, Côte d’Ivoire, Turkey and Rwanda.”
It also noted, “The two economies with the largest populations, China and India, demonstrated impressive reform agendas. Both governments took a carefully designed approach to reform, aiming to improve the business regulatory environment over the course of several years.”
Further praising India, the report says, “India also invested in port equipment, strengthened management and improved electronic document flow.” The next reference to India underlines, “By implementing the Single Window Clearance System in Delhi and the Online Building Permit Approval System in Mumbai during the second half of 2017, India also continued to streamline and centralize its construction permitting process.”
Interesting! It talked about only Delhi and Mumbai. What about India? I wondered. I was right: As I further read through, I found that report only talks about Delhi and Mumbai, and on page 131 it specifically says out of 100,  it provides weight of 47 to Mumbai and of 53 to Delhi to reach an overall score of 67.23.
At one point, it says, Brazil, Russia, India and China made “reforms, simplifying the process of trading across borders”, underlining, “India decreased border and documentary compliance time for both exports and imports.” How? I wondered. What about their implementation? It says nothing. 
The report only talks about Delhi and Mumbai. Out of 100,  it provides weight of 47 to Mumbai and of 53 to Delhi to reach an overall score of 67.23
India has its borders with Pakistan, China, Bangladesh, Myanmar and Nepal. Isn’t border trade on a virtual standstill? Orm are World Bank economists hoping for an improvement with Pakistan, with whom India has the longest borders? 
Coming to other great reforms, the report claims, the registration process of Goods and Services Tax (GST) has become faster in “both Delhi and Mumbai”. Mumbai has “abolished the practice of site inspections for registering companies”; and in both the cities, “construction permits” have been “streamlined”, have been made “faster and less expensive”.
Further, in Delhi “getting electricity” has become “easier” through a “reduction in the time for the utility to carry out the external connection works”; getting credit by amending the “insolvency law” has become easier “both Delhi and Mumbai”; and“paying taxes” has become “easier” by “replacing many indirect taxes with a single indirect tax, the GST”, both in “Delhi and Mumbai”. 
And, in Mumbai, night work is a “most restricted area according to Doing Business data, has been done away with in Mumbai, even as increasing “overtime hours and eliminated work restrictions on the weekly rest day, while introducing a compensatory day off and a 100% wage premium for work on that day.”
I contacted a senior official, whom I have known ever since my Gandhinagar days. Involved with business in various ways, I asked for his reaction on World Bank showing India in such great light. “It’s all lobbying there out there in World Bank. They appoint only bureaucrats, and the one from India is a Gujarat cadre IAS official S Aparna”, he said.
The report has left me wondering: The World Bank, naturally, is not expected to be consider India’s poor ranking in world hunger ranking – poorer than all of its neighbours, including Pakistan and Bangladesh – which analysing any of these “doing business” ranking.
But has ease of doing business nothing to do with the current slowdown, about which the International Monetary Fund and the World Bank have been warning in the recent past? As a senior journalist, who has been handling business for quite some time, tells me, “There is no ease of doing business for the small and medium business, which continue to reel under a GST which favours the big business.”

Comments

Paul Streumer said…

Very right. It struck me, too, that the base from which the World Bank derives this ranking is so small (Mumbai and Delhi only), that it renders the Indian section of the report practically useless.
Uma said…
It is good to know that the person responsible for glowing praise of Indian business models is from Gujarat, because that explains the reason for the accolades. On the other hand, it makes it difficult to believe any report by the World Bank because there might be similar vested interests behind ALL their reports.

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