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How not to do business

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  • There is a tradition of cross-country economic freedom ratings. China doesn’t do that well on those. However, a valid point has been made about China to the effect that in such a large and heterogeneous country, aggregate scores are misleading and southern coastal provinces (when disaggregated data are available) perform better than many developed countries in economic freedom ratings.

    In heterogeneity, India is no different. An Indian Chamber of Commerce (ICC) found that it takes 105 days to register property in West Bengal, compared to 2 days in Karnataka and 1 in Gujarat and there are similar results for other business transactions. It is tempting to pass the buck to state governments and argue that if red carpet in Delhi is replaced with red tape in Kolkata, states are responsible. Thanks to the Seventh Schedule, that’s partly true, but not entirely. Several procedures originate in Delhi and even when they don’t, the Centre can incentivise reforms. What needs highlighting is that not all procedural reforms require legislative changes. Hence, the red herring of blaming the Left and coalition governments won’t work. A lot can be accomplished through executive action. Not too many people know that the National Commission for Enterprises in the Unorganised Sector (NCEUS) was triggered by Madhu Kishwar’s work. That’s how its establishment got into the common minimum programme. The NCEUS agenda of skill formation and social security apart, what happened to the agenda of administrative law reform? Where did the national policy on street vendors, to take one example, disappear?

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