Maharashtra has slipped two places to 10 this year in the national Business Action Reform Plan (BARP) index ranking from eight in 2015. Andhra Pradesh and Telangana have been declared joint toppers.
The BARP is a ranking mechanism created by the Union Ministry of Commerce and Industry in collaboration with the World Bank to encourage the ease of doing business in India following a national ‘Make In India’ workshop on December 29, 2014. Later, a 340-point Business Reform Action Plan was prepared for all States and Union territories in October 2015.
58 regulatory processes
The BARP assessment report is based on the effective implementation of Department of Industrial Policy and Promotion (DIPP)’s 340-point business agenda. The agenda is based on the recommendation for reforms in 58 regulatory processes, policies and practices spread across 10 sectors. These include timing of construction permits, power connections, and speed of issuing tax certifications, among other parameters.
The 2016 rankings are out, with Andhra Pradesh and Telangana leading with a score of 98.78 per cent. Maharashtra is at 10 with a score of 92.86 per cent, behind Uttarakhand (96.13 per cent) and Rajasthan (96.43 per cent). Gujarat is at No 3, followed by Chhattisgarh, Madhya Pradesh, Haryana, and Jharkhand.
However, officials in Maharashtra clarified that these rankings are an ongoing process, and that the World Bank and BARP did not consider the full cycle of many processes this year, leading to a drop in the rankings.
“For example, the full cycle in construction permits, from start of application to completion, is more than a year. But this cycle has not been considered by the assessment,” said Apurva Chandra, principal secretary, Industries, Maharashtra.
“Rankings are mere grades. We have, in fact, moved up from last year being in the ‘aspiring leader’ category to the ‘leader’ category this year. We have also mentored a state (Goa) this year. Some of our questions were not considered by the BARP, but I don’t want to get into it.”
Unfair criteria?
Maharashtra did not submit responses to 24 of the 340 questions for the final assessment. Andhra Pradesh, the leader, was able to work on 336. As many as 32 states and Union territories submitted evidence of implementation of 7,124 reforms, officials said.
“One of their criteria was the construction of warehouses, while there has been no warehouse construction in Mumbai for several years. If they had taken a ‘mall’ as a criterion, we would have fared better,” Mr. Chandra told The Hindu .
The data for this assessment was collected from state governments on the BARP portal, among the first of its kind globally. These submissions were reviewed by a World Bank team and validated by DIPP’s team to study whether they met the BARP objectives. A total of 6,069 reforms were approved as “implemented” or “not applicable” on the portal, officials said.
Contradictory claims
This is not the first time Maharashtra officials have contested the criteria used in the ease of doing business rankings by World Bank. Mumbai Municipal Commissioner Ajoy Mehta had raised questions on the way World Bank has assessed Maharashtra’s ease of doing business ranking, and blamed the Centre and the state agencies for a slip in the ranking.
As reported by The Hindu earlier, a World Bank report last week debunked the state’s claims of getting rid of arcane rules and red tape. For instance, it contradicted the BMC’s claim that getting approvals costs a builder Rs. 5,64,753 after reduction in red tape, saying the cost is Rs 12,78,937.
Mr. Mehta, in his letter this week to the Chief Secretary, blamed the Centre and the State for Maharashtra’s slip in the ranking. He claimed that the Revenue Department took a long time in giving no-objection certificates, leading to a fall in the ranking in the ‘Construction Permits’ parameter.
He told The Hindu the parameters used by the World Bank are flawed. “Firstly, they have used warehousing as an assessment agenda while in Mumbai no warehouses have been constructed in the past few years,” he said.
“They have showed obtaining a property card takes 17 days. This is a far-fetched assumption. Other permits and construction costs, too, have been calculated in dollars. All of these have led to a needless drop in our rankings,” Mr. Mehta added.
