The most important takeaway from a World Bank supported estimate of the ease of doing business in 32 of India’s states and union territories is that state governments are interested in economic reforms. Union minister Prakash Javadekar is also on the right track when he argues that making it easier to do business will bring more poor people out of poverty. This goes against the grain, refreshingly, of the usual rhetoric proffered by most political parties – whose essence is captured in Rahul Gandhi’s charge of ‘suit boot ki sarkar’ – that facilitating business is tantamount to expropriating the poor and putting them out on a limb.
China’s stratospheric rates of growth were underwritten by competition among its provinces. That’s sadly lacking in India as states ask for ‘packages’ instead. But when it comes to nuts and bolts of economic systems, there is consensus as well as desire to improve among states. Consequently, in December they agreed on a 98-point action plan to enhance transparency and improve efficiency of government regulatory functions. In addition, they are willing to be measured on progress of implementation. That’s the right step forward.