India supports review panel views on 'Doing Business' report

India, ranked at 132nd position among 185 countries in overall ease of doing business in the report, has expressed "deep concerns" about it.

New Delhi: India's stance that World Bank's report on ease of doing business was "not useful" and "not right" has been vindicated with an independent review panel recommending removal of ranking system for countries, among other suggestions, in the study.

India, ranked at 132nd position among 185 countries in overall ease of doing business in the report, has expressed "deep concerns" about it.

The World Bank-appointed independent panel of experts, headed by South African Planning Minister Trevor Manuel, in its review report came out with various recommendations, including scrapping the ranking system for countries with regard to ease of doing business.

"India has deep concerns about the report. India has officially protested, through its executive director in the World Bank, about the report," Planning Commission Member Arun Maira, who was also part of the review panel said.

"India' stance was that the report was not useful (for the country) and not right... The conclusions of the review panel vindicates position taken by India," he said.

As per the 'Doing Business' report, a high ranking on the ease of doing business index means the regulatory environment is more conducive to the starting and operation of a local firm.

According to Maira, the panel looked into the overall utility of the 'Doing Business' report in helping with the development of countries. It reviewed the methodology and alignment (of the report) with the World Bank, among others.

"We had discussions with executive directors (of the World Bank) representing various countries and regions, international business community and NGOs (for their views on labour issues, among others)," he added.

In its report released last week, the panel said the Bank should continue to publish the report but without the overall aggregate rankings (the Ease of Doing Business index).

Besides, the panel raised various concerns about the report such as that the potential to be misinterpreted, relying on narrow information source.

Citing India's example, the committee said the government has focused on the small and medium-sized enterprises sector to stimulate industrial growth and employment.

Several grassroots studies have revealed that SMEs struggle with the availability and cost of credit.

"However, the Doing Business report ranks India 23rd on the Getting Credit indicator (but 132nd in the world overall). This provides an obscure picture of the real constraints faced by small and medium-sized enterprises in India.

"If the Indian government were to be guided by Doing Business rankings, it would focus on constraints that pull down the country's overall ranking and not on the availability of credit. The report is therefore not an accurate instrument for broader policy considerations," the panel noted.