Weighing the Ease
Weighing the Ease

Disclaimer: The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of the Government of India, or any other entity of the Indian Government.

Shri Vivek Kaul [1] in his article titled “The Curious Case of #EaseOfDoingBusiness” [2] presents a case deriding India’s recent progress on Ease of Doing Business index where it has jumped 30 ranks to stand at 100th. The author breaks down the progress component-wise and goes on to question just how much this jump means. While the caution he argues for deserves merit, in my humble opinion, some of the criticism of the progress he makes, is a bit too stretched.

For instance, the recent progress is dismissed by the author as one reflecting that in only Mumbai and Delhi. But was the index not covering same cities only in the previous years too? Why is it that earlier when we performed badly, the index mattered and now that we have improved, suddenly it doesn’t?

And isn’t our best city being compared to the other best cities in the world? Isn’t it an apples for apples comparison? The index makers have picked the best cities of each country. Still if we think that the index makers were wrong and the index loses its meaningful value due to this limitation, then perhaps we shouldn’t be discussing this index, including past poor performances, at all! We should simply throw it in the trash-can instead of writing articles criticizing the recent progress!

Next, while dismissing progress on tax front, the article says this year the ill effects of GST were not taken into count. Sure they weren’t but isn’t GST in the medium to long term business ease enhancing one? Any change creates issues in the beginning, but once it stabilizes, won’t GST ease tax compliance burden via its online filing, reduction of the number of taxes and one nation one rate features? That will surely provide a boost only, if anything, to the ease of doing business.

Then the article dismisses progress on electricity front by saying it is limited to Delhi and Mumbai only. To this, we would again like to highlight that:
A) If things have improved in Delhi and Mumbai, this doesn’t mean they haven’t in rest of the country.
B) Earlier also same cities were captured.
C) For rest of the world too, their best cities are captured.

The article then goes on to dismiss the progress on solvency and getting credit fund by citing multiple issues which still remain. That’s true, there are many issues remaining. That is why we are number 100 not 1 on that count. Doesn’t mean this progress is good for nothing!

Finally, it says that on many ‘critical’ factors particularly involving job creation like starting new business, enforcement of contracts exporting etc, progress is poor. It is true. However, all indicators are ‘critical’ only as far as job creation is concerned. Jobs are not created only when new businesses start, but also when existing ones expand. The compliance costs they are able to save on other counts will surely reduce their overall cost of business and help them expand and hire more workers!

In a nutshell, this progress is good. It is a rare and no mean feat. Lot of things remain to be done, but that is why we are 100. Still the progress is good. We need to make it easier for the masses to do business. That is the only way to prosperity.

Citations:

[1] https://newslaundry.com/author/vivek-kaul
[2] https://newslaundry.com/2017/11/01/easeofdoingbusiness-ranking-world-bank-modi-government-delhi-mumbai

7 COMMENTS

  1. Very good and balanced . We need to be very specific , if government does good we need to appreciate if not then criticism is required.

  2. In democracy criticism leads to further enhancement in system but too much criticism waves slew of pessimism. Nice & well thought article, Thanks for such insights. Please keep writing.

  3. Really the balanced article! We, as citizens need to understand, that policies or results of policies or actions of government can’t be judged in binary, it can’t be either a grand success or an absolute failure (e.g. demonitization), and so shouldn’t be our responses … Glorification of the reforms/government actions or an extreme impatient criticism of the same, are binary responses. We should certainly appreciate the progress made in the given context of ranking improvement . A little patience would help us all! As you rightly mentioned, we should give reforms enough time to stabilize rather than jumping to extreme conclusions about their worth and be optimistic meanwhile!

  4. Nicely highlighted the only ‘Delhi , Mumbai’ thing. Same thing has happened with GDP too. When our growth was 7 + they said the method of calculation changed and now when it is down , they say it is the failure of the govt.

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