Read the given passage carefully and select the best answer to each question out of the four given alternatives.
The improvement in India’s “Doing Business” rankings was quite a surprise, and among the few pleasant ones in recent weeks. What did the government do right? If business has become so much easier, why don’t we see a boom in new businesses and investment? Such questions are critical to help evolve a more focused set of policy priorities for India.
The jump in the ranking, from 100 to 77, is correlated with an improvement in the ratings, a jump of 6.6 per cent over last year. Do such rankings reflect the reality of business in India? The answer, in my understanding, is a partial yes. There has been, no doubt, a significant improvement in the paperwork associated with business in many areas of the government. Permissions and form submissions of various types have become much easier for those who keep good records. This is true both at the states and the Centre, and the improvement is therefore understandable.
However, the jump in the ratings is not aligned with the experiences of people conversant with the business climate. Construction, as a business, is typically not very easy to do and requires a multitude of submissions, permissions and even side payments. While some improvement has occurred across the country, the jumps appear to be non-commensurate with these improvements. It is possible that India is “gaming” the ratings. This is relatively simple to do and would require finding those elements within the ratings that are the easiest to change and focusing on those items, rather than taking on the more difficult ones.
Arguably, there is nothing wrong in this as long as it leads to a real improvement in business conditions and not just a numerical one. But on the other hand, gaming the ratings implies that an international agency is effectively setting the preeminence of the government.
This is, of course, not to say that things are all made-up. Significant improvements are happening, and many of those are through the improved use of information technology. We will find this across many government departments both at the central and state level. And they are steadily improving the ease of business in recent years. Such improvements have an instant impact in terms of costs of transactions. However, their impact on economic growth rates tends to be felt over a longer time period and can sometimes take many years to be reflected in any measurable macroeconomic outcomes. We must, however, recognise that dependence on IT has also perversely made things more difficult for those entrepreneurs who are less digitally able. This will no doubt change with time and familiarity, but it would require the government to constantly keep on working at making its IT-enabled interfaces more user-friendly for the small and micro-business entrepreneur.
But we must recognise that there is much that this ranking does not capture. First, they do not capture the out-of-the process issues related to the daily running of a business, the various investigations conducted by the revenue department, or company law matters, or labour-related issues, or, for that matter, the various demands of the inspectors of quality and processes. Second, the reality of business in India requires the entrepreneur to focus on a whole range of aspects not covered adequately in such ratings. Third, input costs, demand factors and infrastructure issues are another class of factors that ease of doing business does not intend to capture. While that enables it to retain its focus, these are important factors that impact both global and domestic investment.
To sum up, the ease of doing business ratings’ improvements are very welcome and are an affirmation of the changes occurring within both the state and central governments. The objective of improving India’s economic climate, however, requires the government to take on far tougher tasks, some of which are included in the ratings, but many are not. Finally, while we can and should celebrate the improvement, the focus and prioritisation need to remain on issues relevant for India, which may or may not be, captured in the ratings.
The correct answer is option 3, i.e. proportionate.
Commensurate means in proportion to or consistent with something which is a synonym of proportionate.
Meaning of other words:
Glitch means a defect.
Unacceptable means something that cannot be accepted.
Abominable means very unpleasant.