‘The methodology has to be much more robust... There is an issue’

Arvind Mayaram, Secretary at the Department of Economic Affairs in the Indian government’s Finance Ministry, said during a speech here that the methodology adopted by the World Bank’s “Doing Business” report, in which India was ranked 132 out of 185, was “not proper” and that the Indian government had formally written a letter of complaint to the Bank to this effect.

Speaking at the Indian embassy here, Dr. Mayaram said in response to a question on this subject asked by Stephen Cohen, Senior Fellow at the Brookings Institution, “I think that the methodology used by institutions like the World Bank has to be much more robust... There is an issue”.

Commenting on specifics of the Bank’s methodology, the Secretary noted that for each country that it analysed, the Bank considered one parameter and one city in which they measured that parameter.

“For India, would you know what the parameter was? [It was] land acquisition. Do you know which was the city [selected]? [It was] Mumbai,” he said.

Dr. Mayaram went on to argue, “Now obviously I am surprised we were [ranked 132], I thought we would be 180. If you want to go and buy land for doing business in Mumbai city, I am quite certain it is difficult, I concede that.”

Yet, he pointed out, there was a “very large number of U.S. businesses who have been [in India] for more than 100 years and have done exceptionally well, have made lots of money and would like to continue to work there.”

Dr. Mayaram said that he conceded that there used to be a problem of transparency earlier; however, that was much less the case now, and in part that was due to two factors.

First, “the 24X7 news channels that most of the time also manufacture news... have opened up a huge area for the people to see, in terms of investigative journalism. But [the other factor] is on account of the Government of India itself, which is that when they enacted the Right to Information Act, [which] provides you with a weapon, that is very effectively used [for] exposés.”

He also admitted that there was, however, a continuing problem with “difficult procedures and red tape at the implementation level, where officials become difficult in doing things sometimes because they are afraid of taking decisions, because of too many exposés or there may sometimes be other reasons,’’ including “a certain level of corruption that goes on at the lowest level.”

Even there, India had pressed forward with the prosecution of even ministers accused of corruption, and some of them had been arrested and were being tried, he noted. There also, the system had been quite robust in dealing with corruption.

In this context, Dr. Mayaram quipped that while “It is the best that we can do to bring to book people who are corrupt or accused of corruption... certainly it is very difficult for us to resort to the other, more effective, method of hanging them by the closest tree [and] we have perhaps not been able to achieve that kind of efficiency in handling cases of corruption.”

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