India’s business climate ranking may be impacted with the World Bank ordering a review of its flagship 'Doing Business' reports of last five years during which India’s ranking shot up by 67 positions to the 63rd spot.
On Thursday, the World Bank, in a statement, said it has paused publication of the Doing Business report due in October and is undertaking a review of data changes in the last five reports after it discovered a number of irregularities. “We will act based on the findings and will retrospectively correct the data of countries that were most affected by the irregularities," the Bank said.
The World Bank’s most cited report has been mired in controversies in recent years with the former chief economist of the Bank Paul Romer resigning from his post in January 2018 after claiming that methodological changes in compiling the report led to a downgrade in socialist Chile’s ranking. Romer was planning to carry out a review of the reports of past four years and recalculate the rankings.
Alluding to the “two big controversies" concerning India’s rise from 130th place to 100th place between 2016 and 2017 and Chile’s fall in the ranking during the same period, Kaushik Basu, who supervised release of the report from 2012-16 as the chief economist of the Bank had said India benefitted from methodological changes.
“For example, when India moved from 142nd to 130th place between 2014 and 2015, the DB (Doing Business) team and I computed that only four of the 12 positions that India had climbed reflected changes India had made, with the remainder attributable to changes in the DB methodology," Basu wrote in an article published on Project Syndicate in February, 2018.
India’s ranking under the Narendra Modi government improved from 142 in 2014 to 63 in 2019 with the government making concerted efforts to improve its business competitiveness ranking. Niti Aayog chief executive officer Amitabh Kant recently said India targets to be among the top 50 countries by next year.
However, Basu defended the reports published under him while admitting that there certainly are ways to influence the rankings without cooking up data: “Although there were aspects of the DB rankings that I did not like, I do not find the recent charges of data rigging to be credible. Having personally supervised much of the process, which involves a very large team compiling economic data from around the world, I can vouch for the multiple layers of checks and balances that are in place," he wrote.
The opposition did not lose the opportunity to target the government on its 'excessive' focus on improving the Doing Business ranking. Congress leader Jairam Ramesh tweeted: “Mr. Modi was busy drumbeating India's improvement in World Bank indices. Now the Bank has paused further publication of these rankings due to irregularities in data & methodology. So much energy of this Govt was wasted chasing a bogus ranking, while our MSMEs continued to languish."
A government official, speaking under condition of anonymity, said the government will wait for the World Bank to complete its internal review process before reacting to it. “Our data filings have been transparent and are based on genuine reforms on the ground. We don’t have a problem with a review," he added.
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