Economic laws of attraction

India has for nearly a year been considered one of the most attractive business destinations, so a welcome difference now is that the latest study by global consultancy firm Ernst & Young shows that 32 per cent of the 500 decision makers in multinational companies say India will remain the world’s most attractive investment destination for the next three years.

India’s manufacturing prowess has also been recognised thanks to the Prime Minister’s hardsell of his “Make in India” and “Start Up India, Stand Up India” initiatives. Under his monitoring, the government has planned incubation centres, tax breaks and simplification of processes.

Innovation and entrepreneurship are the bedrock of China’s economy. That Mr Modi has recognised this need is implicit in his initiatives and in his stressing that innovation must spread to manufacturing and not be confined to information technology. However, while he is racing ahead, the states have to work in tandem since actual permissions at the ground level have to be given by the states.

It is unfortunate that a premier state like Maharashtra lags in the ease-of-doing-business and non-BJP ruled states like Tamil Nadu and Andhra Pradesh race ahead. Corruption, too, is still rampant; unless this is curbed, the ease-of-doing business will always be wanting.

An earlier study, by Boston Consulting Group, revealed that 39 per cent of the top management in the country feel there has been no improvement in EODB, while 20 per cent feel it has improved somewhat. It is hoped that Mr Modi will call the state chief secretaries and take an account of the progress in ease of doing business.