World Bank to rank States on ease of doing business

Eager to shake-off allegations of favouritism towards BJP-ruled States, the Centre has distanced itself completely from the process of ranking States on the ‘ease of doing business’ index this year and instead given the task to the World Bank.

“Instead of roping in the World Bank only as technical facilitator, as was done last year, the Department of Industrial Policy & Promotion (DIPP), this year, has engaged it to carry out the entire process of assessment, right from data collection to evaluation and ranking,” a government official told BusinessLine .

The Centre has signed a three-year agreement with the World Bank assigning it to carry out the ranking process of States based on the already identified parameters as part of the annual report titled ‘Assessment of State Implementation of Business Reforms’.

“The DIPP will give just secretarial inputs such as help in fixing meetings between State government officials and the World Bank and in organising workshops,” the official said. The ease of business ranking is important for States as it serves as an indicator to investors, both foreign and domestic, on the best States to make their investments in.

Last year, the DIPP’s ranking of States, carried out jointly with KPMG and the assistance from World Bank, received flak from a number of Opposition parties and poorly ranked States for alleged favouritism.

The main reason for the criticism was that Prime Minister Narendra Modi’s home state Gujarat topped the list and all top five positions were occupied by either BJP-ruled States or its allies.

“By assigning the entire exercise to the World Bank, we have left no scope for criticism. Also, ranking of States on ease of doing business is a job best done by the World Bank, which has a lot of experience in this line,” the official added.

This year, the States are being assessed on the basis of 340 parameters, against 100 last year.

The key parameters, though, remain the same and include factors such as online single-window system, land availability, property registration timeline, permits and environment clearances, online tax returns filing and a speedy dispute resolution mechanism.

States have time till June 30 to submit their responses to the questionnaires given to them. “We hope that the final report will be out by August,” the official said.

The DIPP initiated the exercise of ranking States last year as part of its efforts to improve the country’s ranking in the World Bank’s ease of doing business report where it rates 189 countries.

India’s efforts paid off as its ranking improved 12 notches to 130 compared to 140 the previous year. It hopes to better its performance this year, the official said.

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