{"id":3738,"date":"2017-11-03T12:00:10","date_gmt":"2017-11-03T02:00:10","guid":{"rendered":"https:\/\/testblogs.griffith.edu.au\/asiainsights\/?p=3738"},"modified":"2023-08-08T10:36:42","modified_gmt":"2023-08-08T00:36:42","slug":"why-india-should-be-wary-about-celebrating-its-ranking-in-the-latest-doing-business-report","status":"publish","type":"post","link":"https:\/\/testblogs.griffith.edu.au\/asiainsights\/why-india-should-be-wary-about-celebrating-its-ranking-in-the-latest-doing-business-report\/","title":{"rendered":"Why India should be wary about celebrating its ranking in the latest &#8216;Doing Business&#8217; report"},"content":{"rendered":"<p><a href=\"https:\/\/testblogs.griffith.edu.au\/asiainsights\/tag\/yan-islam\">YAN ISLAM<\/a> |<\/p>\n<p>The much-noted flagship publication of the World Bank <em>Doing Business<\/em> (DB) was <a href=\"http:\/\/www.doingbusiness.org\/\">publicly unveiled recently<\/a>. This became cause for celebration for Indian Prime Minister Modi. Why? Well, after languishing for some time, India jumped 30 places to reach a rank of 100 (the lower the rank the better in terms of the ease of doing business). It was given the accolade of the 10 \u2018top improvers\u2019 for implementing more than 50 regulatory reforms over the past year which \u2018make it easier to do business\u2019. The Indian Prime Minister <a href=\"http:\/\/indianexpress.com\/article\/india\/pm-modi-ease-of-doing-business-ranking-world-bank-gst-demonetisation-india-economic-growth-4916080\/\">tweeted<\/a> that it was a \u2018historic jump\u2019. This is quite different from last year when the Indian government was <a href=\"http:\/\/www.thehindubusinessline.com\/economy\/ease-of-doing-biz-nirmala-disappointed-at-indias-low-rank\/article9271009.ece\">disappointed<\/a> that the World Bank did not adequately capture the reform measures that were underway. Prime Minister Modi\u2019s ambition is to catapult India to the top 50 nations in the DB ranking scheme.<\/p>\n<p>As is well known, the DB Report 2018 is the 15<sup>th<\/sup> in a series of annual reports that seek to measure regulations that enhance \u2018business activity and those that constrain it\u2019. The theme of this year\u2019s report is \u2018Reforming to create jobs\u2019. Its authors claim that there is a significant association between improvements in DB rankings and growth, employment and poverty reduction. I am not going to quibble over this empirical proposition, but I am sympathetic to <a href=\"https:\/\/www.aeaweb.org\/articles?id=10.1257\/jep.29.3.121\">the views of those scholars<\/a> who maintain that by focusing on formal rules and regulations that characterize the <em>de jure<\/em> investment climate, the DB reports fail to reflect the actual experience of firms, especially in developing countries. The <em>de facto<\/em> determinants of the investment climate are, in fact, captured quite well by another World Bank undertaking \u2013 the enterprise surveys \u2013 that seems to lack the celebrity status attached to the DB reports.<\/p>\n<p>I worry about readers in India who are keen to act as cheerleaders of the good news emanating from the DB reports. As a <a href=\"http:\/\/indianexpress.com\/article\/opinion\/ease-of-doing-business-in-an-uneasy-india-hides-not-reveals-4916706\/\">thoughtful analyst<\/a> has pointed out, one should take time to understand what exactly is being measured. He points out that \u2018in India\u2019s case, the business environment in only Delhi and Mumbai are used to compile the national ranking\u2019.<\/p>\n<p>Even if one uncritically accepts the findings of this year\u2019s DB report, one should exercise caution in accepting the quantitative significance of the impact of pro-business reforms on basic social indicators, such as poverty. For example, poverty in India today is <a href=\"https:\/\/www.adb.org\/countries\/india\/poverty\">22.0 per cent based on a national poverty line<\/a>. If India is able to improve its DB rank by 10 percentage points within the tenure of the current Indian government, poverty would decline by only two percentage points. In other words, poverty, following a major overhaul of business regulations, would stand at 20.0 per cent! At least, that seems to be the underwhelming implication of the global estimates provided in this year\u2019s DB report.<\/p>\n<p>The DB report is itself rather frank about the narrow nature of its remit. As it says, \u2018the focus is deliberately narrow\u2026\u2019\u00a0 It concedes, for example, that it does not \u2018\u2026address the extent to which inadequate roads, rail, ports, and communications may add to a firm\u2019s costs and undermine competitiveness\u2019. It notes that it leaves out factors such as macroeconomic conditions, the quality of the financial system, quality of the work force, the incidence of bribery and corruption, market size and lack of security in analysing the investment climate. Thus, it is possible for a country to be a good performer in the DB ranking game despite lacklustre macroeconomic conditions, sub-standard infrastructure, a poorly educated workforce, significant incidence of bribery and corruption and low standards of law and order. Is this how India wishes to seek global recognition as it aspires to become the top 50 most competitive economy in the world?<\/p>\n<p>This article was written by Griffith Asia Institute Adjunct Professor \u00a0Iyanatul (Yan) Islam.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>YAN ISLAM | The much-noted flagship publication of the World Bank Doing Business (DB) was publicly unveiled recently. This became cause for celebration for Indian Prime Minister Modi. Why? Well, after languishing for some time, India jumped 30 places to reach a rank of 100 (the lower the rank the better in terms of the<a href=\"https:\/\/testblogs.griffith.edu.au\/asiainsights\/why-india-should-be-wary-about-celebrating-its-ranking-in-the-latest-doing-business-report\/\">Continue reading <span class=\"sr-only\">&#8220;Why India should be wary about celebrating its ranking in the latest &#8216;Doing Business&#8217; report&#8221;<\/span><\/a><\/p>\n","protected":false},"author":14,"featured_media":3739,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"footnotes":""},"categories":[233,246],"tags":[626,625,1320],"class_list":["post-3738","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-feature-series","category-india-and-south-asia","tag-doing-business-2018","tag-narendra-modi","tag-yan-islam"],"acf":[],"modified_by":"Jill Moriarty","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Why India should be wary about celebrating its ranking in the latest &#039;Doing Business&#039; report | Griffith Asia Insights<\/title>\n<meta name=\"description\" content=\"YAN ISLAM | The much-noted flagship publication of the World Bank Doing Business (DB) was publicly unveiled recently. 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