Home / News / India /  India sees opportunity as World Bank audit finds China fraud in Doing Business ranking
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New Delhi: India hopes the massive fraud highlighted in the audit report of Doing Business ranking by the World Bank, which pointed out undue pressure from China to improve its ranking, will help shift manufacturing supply chains to India.

World Bank is discontinuing publication of its much sought after Doing Business ranking immediately after an external audit unearthed undue interference from senior World Bank staff in changing rankings of specific countries, it said on Thursday.

No irregularities have been found in Indian data, a commerce and industry ministry official said.

“India remains the preferred investment destination for the world and a reliable, trustworthy destination, while China is slipping in attractiveness. Fraud by China will prompt multilateral initiatives such as the Supply Chain Resilience Initiative (SCRI) to move manufacturing to India," the official contended.

India, Japan and Australia formally launched SCRI in April to counter China’s supply chain dominance in the Indo-Pacific region.

World Bank’s reports have been mired in controversy in recent years, with former chief economist Paul Romer resigning from his post in January 2018, claiming that the methodological changes in compiling the report led to a downgrade in socialist Chile’s ranking. Romer was planning to review the reports of the past four years and recalculate the rankings.

World Bank hired American law firm WilmerHale, which studied 80,000 documents and used extensive interviews to compile its 2018 and 2020 Doing Business rankings report. During a sensitive capital-raising year of 2017, China could leverage its clout and pressurize World Bank top management into reversing the fall from 78 to 85 of their ranking.

On instructions from then-president Jim Yong Kim and then chief executive officer Kristalina Georgieva, the Doing Business team was instructed to re-evaluate China’s data to keep the rank at 78.

“The entire episode once again exposes the rampant fraud on which Chinese data is built and the integrity of Indian statistics. China has actively defrauded the world’s investors to hide their worsening investment climate," said the commerce and industry ministry official mentioned above.

The World Bank audit did not point out any fraud in India’s ranking. However, Kaushik Basu, who supervised the release of the reports during 2012-16 as the chief economist of World Bank, had said India had benefited from methodological changes, alluding to the “two big controversies" involving India’s rise from 130th place to 100 and Chile losing its ranking between 2016 and 2017.

India’s ranking improved from 142 in 2014 to 63 in 2019, with the Union government under Prime Minister Narendra Modi making concerted efforts to improve its business competitiveness ranking. India was aiming to be among the top 50 countries by 2021.

The opposition did not lose the opportunity to target the government on its excessive focus on improving the Doing Business ranking.

“World Bank’s Ease of Doing Business Index was among the few global indices where India’s rank post-2014 was proclaimed as rising. Now the exercise has been found bogus & discontinued. If they start an Ease of Fudging Data Index, Mr Modi’s so-called ‘New India’ will top the charts!" Congress leader Jairam Ramesh tweeted.

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