Competing on reforms

One perhaps cannot question the parameters on which the World Bank and its partners rank states leading reforms. While Gujarat was expected to top the list, the surprises are Andhra Pradesh, Jharkhand, Chhattisgarh and Madhya Pradesh among the top five in implementing reforms. Most, interestingly, are not the states that hog the bulk of  investments.

This is, however, a welcome exercise and the government’s objective to get India out of its 142nd rank among 189 economies in the ease of doing business and into the top 50 is extremely laudable. It will also encourage states to compete in implementing reforms and keeps the focus on the need to facilitate the ease of doing business.

India has a long way to go, as the World Bank observes only 32 per cent of the 98-point action plan has been implemented across all states, and less than 20 per cent of reforms needing medium-term action have been undertaken.

One does, however, find a serious lacunae with the eight parameters that determine the ranking. The corruption quotient is sorely missing. This is critical as all these reforms will remain only on paper if rampant corruption in most states is allowed to continue, including in once corruption-free Gujarat. What is perhaps badly needed is a ranking of each state on corruption: one hopes this is done sooner rather than later.

It’s not clear if this ranking will be a continuous exercise, but it should as it will certainly bring in the reforms that young entrepreneurs across India badly need.