James Willkinson Why India Needs a Good Dose of ‘Ease of Doing Business’

On November 1, 2017, India was exuberant about the fact that it has finally achieved a rise in the World Bank ranking. “India for the first time moved into the top 100 in the World Bank’s Ease of Doing Business global rankings on the back of sustained business reforms over the past several years,” the World Bank’s official website wrote clearly in its PR category.

The World Bank ranking can’t be absolutely right. It has always focused on Mumbai and Delhi, and there is an element of smoke and mirrors about the survey methodology. Doing business is truly difficult in India — regardless of how one goes about measuring it.

Meanwhile, the Centre for Global Development (CDG), a US-based think-tank on global policy, quashed India’s jump in the Ease of Doing Business index as a change in methodology.

India’s Prime Minister and Finance Minister reinforced investor interest in India.

Historic jump in ‘Ease of Doing Business’ rankings is the outcome of the all-round & multi-sectoral reform push of Team India. pic.twitter.com/DhrEcuurgi — Narendra Modi (@narendramodi) October 31, 2017

The difference between the UPA and NDA-“The ease of doing corruption has been replaced by the ease of doing business” — Arun Jaitley (@arunjaitley) November 1, 2017

Rankings have always been a powerful marketing tool for politicians in India. The fact remains that doing business in India has never been easy, be it during the days of UPA or NDA. One can wonder if these indexes captured the macroeconomic and political factors that may influence business decisions, and had ever gone beyond the air conditioned offices. If you perceive ‘Ease of Doing Business’ should be talking about the endless formalities, required to operate in a country like India, you are possibly right.

Amongst the 10 DTF indicators which was used by the World Bank, it was clear that getting credit and paying taxes in the country have improved, while trading across borders, starting a business, etc., haven’t seen much of a change. In fact, registering property had seen negative growth of -4.22% in India.

Sign Up For Our Newsletter Follow US Follow @IntPolicyDigest

Perhaps, the Indian government could take the path of the United States, to provide mediators or lobbyists as an important lever for a productive government. And while nations have recognized the lobbying rally, India has been happy with twisted numbers and false political manifestos around statistics. This is possibly where multinationals had sought consultants like Suhel Seth, Deepak Talwar, Dilip Chabrian, and others in the profession for facilitating MNCs to operate through the maze of bureaucracy.

For “ease of doing business,” it is crucial to build relationships in the right manner to regulate formerly protected industries. Traversing the diverse and complicated corporate landscape is still a daunting task without the right help on board. The political process in India, which is thwarted by micro-interests, requires such consultants.

Lack of knowledge and the tradition of calling such business consultants lowly “brokers,” were the reasons why they were seen as working in grey areas. They were often derided, in spite of being able to bring in a high degree of alignment between those in power and the global MNCs, as we are struggling with the nuances of a process that we choose not to understand.

The effort of the Indian government for a ranking higher in ‘Ease of Doing Business’ continues, but possibly in a direction which is shadowed by assigning the work to a few institutions. The government of India has roped in the National Institute of Construction Management and Research (NICMAR), the Indian Institute of Foreign Trade (IIFT), the Institute of Company Secretaries of India (ICSI) and the Institute of Chartered Accountants of India (ICAI) to take India to the Top 50 positions. While this is good for a ranking index and to influence public perception, doing business is still not as easy as it is made to seem.