World Bank ranking of states not based on facts: Tamil Nadu

Tamil Nadu says it's intriguing only BJP-ruled states top the list, while industrialised states are given a go-by.

Reacting sharply to the World Bank report on the ease of doing business listing Tamil Nadu, one of the most industrialised states in India, at the 12th position, senior state government officials termed the report "purely a perception-based analysis, and not based on factuals and efficiencies".

While agreeing that there are some areas where Tamil Nadu needs to improve, the officials said the report, released on Monday, did not take into consideration many key parameters.

The officials also questioned how Bharatiya Janata Party (BJP)-ruled states top the list, while states such as Tamil Nadu, Maharashtra and Punjab which are more industrialised and investor-friendly, are on the bottom.

The report has not been received well by the state government, which held its first Global Investors Meet last week and signed memoranda of understanding worth Rs 2.46 lakh crore.

The officials asked how the report can compare states such as Jharkhand, Chhattisgarh and north-eastern states with states such as Tamil Nadu, which has higher penetration of industrialisation than the former lot.

They said it's unfair that states without even proper roads, power, social security and a decent literacy ratio were compared with Tamil Nadu, which is much better placed in all these parameters. 

Tamil Nadu was the first state to implement single-window clearance way back in1995-1996. No state has the record of giving clearances in 12-30 days, which Tamil Nadu has, but no mark was given to this, they pointed out.

"The report is not objective. They (World Bank) did not look at how effective the systems are in single-window clearances; how labour laws are how inspector raj has been reduced (in Tamil Nadu). It is very unfortunate," said a senior state government official.

Another official said the report was based on how business can access services without any hassle through the internet, but not on what the state has achieved in terms of infrastructure.

As far as Tamil Nadu is concerned, one the major issues is related to value-added tax (VAT). In the survey, there were 44 questions, of which the answer was 'yes' for 28.

For issues such as e-payment and e-signature, the state's commercial department has proposed some amendments. Once these amendments are passed by the legislature, the entire VAT administration will be online.

Notably, the score on online implementation in pollution clearances was better for the state as Tamil Nadu Pollution Control Board had implemented online consents.

The officials agreed that the state's labour department is not tech-savvy, but it has started online inspection. 

"I don't think any serious investors will be fooled by all these things. Maharashtra and Tamil Nadu are the largest states in terms of growth of industry and output," said an official, who did not wish to be named. He, however, agreed that the neighbouring state of Andhra Pradesh is a tech-savvy and efficient with government departments taking to information technology early on. 

TAMIL NADU’S CLAIMS TO FAME

• Tamil Nadu 2nd largest contributor to India’s GDP with 8.4% share; state’s GSDP in 2013-14 was Rs 4,80,618 crore
• 11 % of India’s industrial output is from Tamil Nadu
• State has a 17% share in number of factories in India - higher than any other state - with 36,869 units
• It has a 16% share in India’s industrial workforce with 16,02,447 workers
• Ranks 3rd in terms of cumulative FDI inflows ($16 billion from 2000 to 2014)
• State ranked 3rd in terms of invested capital of Rs 2,92,260.06 crore  and 3rd in terms of value of total industrial output of Rs 6,19,525.33 crore
• It houses 0.85 million MSMEs with an Investment of $8 billion