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Business News/ News / World/  World Bank’s Doing Business Index: Did India move up 4 spots or 12?
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World Bank’s Doing Business Index: Did India move up 4 spots or 12?

World Bank Country Director for India Onno Ruhl says India has registered a significant shift in trend after several years of decline

A file photo of World Bank Group building in Washington D.C. Photo: BloombergPremium
A file photo of World Bank Group building in Washington D.C. Photo: Bloomberg

New Delhi: Controversy marked the World Bank’s ‘doing business’ rankings on Wednesday after the Bank’s India office, citing methodology, differed with its Washington-headquartered parent over how many notches India had moved up the scale.

The World Bank late on Tuesday (India time) released its ease of doing business report 2016 in Washington that used new methodology to show India has moved up four spots — from 134 last year to 130.

But on Wednesday morning, the Indian arm of the multilateral lending agency chose to highlight India’s performance based on last year’s methodology. And this showed India’s ranking last year was 142, which of course meant India had moved up 12 places.

In its report, the World Bank said that it has revised the rating methodology for both its 2015 and 2016 rankings. Going by this statement, India has shown only a marginal improvement.

However, a press release issued by World Bank India on Wednesday said, “India ranks at 130 out of 189 economies in the world in this year’s report (ranked 142 in Doing business 2015), marking a significant shift in trend after several years of decline in ranking."

The Indian release remained silent on the revised methodology and did not mention India’s revised ranking of 134 for last year.

World Bank Country Director for India Onno Ruhl, asked to explain the anomaly at a press conference, said there is nothing wrong in comparing the ranking of 130 to 142. “But no matter how you look at it, India has registered a significant shift in trend after several years of decline," he said.

Interestingly, World Bank chief economist Kaushik Basu first tweeted on Wednesday that India was among the few economies that saw its ranking improve by more than 10 spots. “Some countries that improved Doing Business rank over 10 places last year," he tweeted, listing them as Bhutan, Kenya, India, Uzbekistan and Cyprus.

About an hour after his first tweet, when questioned about the revised methodology, he tweeted, “If you do back calculation with this year’s method indeed India moves up 4 places since last year."

The Indian government was quick to latch on to the “12 spot increase in rankings."

“I am grateful that the World Bank has recognised that India is now becoming an easier place to do business... I believe that this 12 point movement does not reflect the full pace of reforms that we have done," finance minister Arun Jaitley said.

“A large number of steps which we have already taken are going to be reflected in the rankings next year. These rankings are only up to 1 June and some of those steps, whose impact is not seen on the ground, as yet have not been factored into this. But I am sure in the years our ranking will certainly improve," PTI quoted Jaitley as saying.

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Published: 28 Oct 2015, 04:30 PM IST
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