India has jumped 30 places to 100 in the World Bank’s ease of doing business rankings this year, driven mostly by reforms in access to credit, power supplies and protection of minority investors. This has been welcomed by the Govt and has been called the achievement “historic”. In fact, Prime Minister Narendra Modi, now wants the country to be in the top 50 on the index. India is closing the gap with China which continues to be ranked at 78 for the second year. India was ranked 142 in 2014.
The report also provides the ranking for 17 Indian cities and their rankings for the subcomponents which are- Starting a business, Dealing with construction permits, Registering property, Paying taxes, Trading across borders, Enforcing contracts, Resolving insolvency. Ludhiana secured the top position while Kolkata secured the last overall rank of 17.
The cities have been grouped into 4 Regions- Northern, Western, Eastern and Southern. The Northern region is the best overall region closely followed by the Western cities. The Southern and Eastern region are lagging behind.
Some points of interest that emerge are the relative lower ranks of southern cities like Bangalore and Chennai. For a long time, they were among the top dynamic cities but seem to be falling behind, not just to regional rival Hyderabad at rank 2, but also to a number of emerging cities elsewhere.
The Eastern region has pockets of dynamicity like Bhuvaneshwar and Guwahati, but is being dragged down by the abysmal performance of Kolkata, the premier city of Eastern India. Unless Kolkata can up its game, it will create a serious drag on the Eastern region and retard its potential.
For the next few years, it is necessary to identify the regional laggards and bring them upto speed. Major centres of economy like Chennai, Bengalore and Kolkata have fared poorly in these ranking. Fixing them on priority will go a long way to improve India’s overall rank and spread the growth momentum evenly across India.