Well Done, Modi

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The Narendra Modi-led NDA government deserves a pat on its back for India’s quantum jump from 130th to the 100th rank in the World Bank’s rating of ease of doing business in countries worldwide. The parameters on the basis of which India climbed so many notches higher were mostly subjects of the Union government. While the country’s score in starting a business has improved marginally, the considerably improved ease of getting credits must be attributed to the Pradhan Mantri Mudra Yojana. Further, the furore by traders and the opposition over the goods and services tax notwithstanding, the ease of paying taxes has increased its score from 46.7 in 2016 to 66.1 this year. The international body, it appears, is not impressed by the allegation from some quarters that a tax-freak Modi has unleashed an inspector raj on the people. Enforcing contracts is now easier, thanks to the lenience the regulator has been showing for the past three years to small and medium-scale employers in hiring and firing. We are yet to see the bankruptcy law come into effect with full force, which can be ensured once the ordinary citizen gets his money’s worth at least from the real estate, thanks to the judicial intervention. If we have jumped from 32.8 marks to 40.8 in resolving insolvency, the score is all set to get even better by a year or two. The housing sector is offering loans on buyer-friendly terms for new purchases. Buyers finding it a bit more difficult to get their properties registered than what they did last year can be attributed to some mathematical peculiarity of the procedure the WB adopted for this study. With construction permits being issued more readily, the country will soon witness an infrastructure boom — more so due to the tact and zeal of Nitin Gadkari whose methodology of rehabilitating slum dwellers mostly pre-empts a humanitarian crisis. Trading across the borders is easier, too, though not many nationalists would be happy about the Most Favoured Nation status accorded to Pakistan. Finally, the ranking in electricity staying static takes nothing away from the way Piyush Goyal revolutionised power availability, if not power production; 85.1 is a good score. The jury is out on the share of the credit that should go to Finance Minister Arun Jaitley, whose temperament of a lawyer probably made about three dozen acts of reform look incremental rather than radical. Posterity might judge him better when there is international recession in the future. Caution, as asserted in an older editorial in this portal, has proven to have almost immunised us from the volatility of the other markets of the world.

Among the countries that have topped the chart, Singapore is a favourite example pro-market advocates love to cite, forgetting that dictatorial capitalism either of the legendary Lee Kuan Yew’s model or a colossal Deng Xiaoping’s variety in China cannot be replicated in a diverse, complex and large India. The history of South Korea is altogether different; in return of the military protection from North Korea the United States offered it, the tiny Asian country gave its people and land on a platter as a readymade market to the Americans. Hong Kong wouldn’t have been several levels above the rest of China but for its British legacy, where the British had adopted a free market approach atypically, which is not seen in the United Kingdom. The ‘beauty’ of South Africa owes to, besides the bounty of nature, the dark legacy of apartheid that discriminated against the poor Blacks, keeping them away from institutional facilities. Once the Blacks came to power, they did not drown the institutions in corruption that Indians did in this country. And New Zealand or Denmark is not pulling away foreign direct investment from Asia in any case.

As seen in some scores in the WB study, some data are not entirely explicable. Therefore, while the nation take heart rightly from the survey results, the government must take lessons from a time-tested study that has been steady in its statistics of correlation for more than half a century: the Cato Institute’s Index of Economic Freedom. For over 50 years, the countries that have opened their markets more have had better-off citizens. From this index, the message for the Indian governments is clear. It’s time the States cooperated in the endeavour to turn our people richer.

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