<div><em>Sutanu Guru analyzes how chief ministers matter more than <strong>Narendra Modi</strong></em></div><div> </div><div>The World Bank today released the eagerly awaited state wise rankings for ease of doing business for Indian states. This was done in tandem with the Department of Industrial Policy & Promotion. What is not surprising is that Gujarat tops the list and is now officially designated as the state with the best score card for ease of doing business. But what is surprising is the ranking and score card of other “industrialized” states that have traditionally been leaders in attracting large scale investments-both domestic as well as global. For example, Tamil Nadu is not even in the top 10 while Haryana is not even in the top 12. Maharashtra and Karnataka barely makes it to the top 10 with a ranking of 8 & 9 respectively. </div><div> </div><div>In sharp contrast, the eviscerated state of Andhra Pradesh that lost large swathes of territory and the capital city Hyderabad to the newly formed state of Telengana is number two in the rankings. Quite frankly, after the division, Andhra Pradesh faces a long haul. The third rank is even more astonishing. It has been bagged by the largely tribal state of Jharkhand that was carved out of the state of Bihar 15 years ago in 2000. Immediately after Jharkhand comes Chhatisgarh, a state that was carved out of Madhya Pradesh in 2000. Madhya Pradesh follows younger sibling Chattisgarh in the rankings.</div><div> </div><div>Tomes will be written by pundits on the rankings. Modi fans on social media have already started celebrating the number one rank for Gujarat. Modi critics have already started labeling this as a futile exercise, in line with the alleged practice of the Modi regime of believing more in slogans and symbols than actual work on the ground. But before we get into that, a brief background on how this was done by DIPP with the help of the World Bank. In early June, DIPP released a framework to assess and rank states in terms of ease of doing business on 98 parameters. Its aim was to assess various factors enabling the ease of doing business in each state, and to compare the states.</div><div> </div><div>The DIPP listed eight areas in which states would be ranked: setting up a business, allotment of land and obtaining construction permit, complying with environmental procedures, complying with labor regulations, obtaining infrastructure-related utilities, registering and complying with tax procedures, carrying out inspections and enforcing contracts.</div><div> </div><div>For many armchair intellectuals, the presence of “Bimaru” states like Jharkhand, Chattisgarh and Madhya Pradesh in the top five with another “Bimaru” state Rajasthan following closely at number 6 seems to defy common sense, logic and reality. How can these states race ahead of traditional powerhouses like Maharashtra, Tamil Nadu, Karnataka and Haryana? Pathological Modi baiters will even find new conspiracies in this ranking. An overwhelming majority of the states in the top 10 are ruled by BJP or allies. Odisha, Karnataka and UP are the only exceptions. But this ranking is not about politics. It is about federalism and it is about the growing importance of chief ministers in both Indian politics and economics. </div><div> </div><div>Look at the rankings again. The chief minister of Andhra Pradesh, N. Chandrababu Naidu is the original Mr Reforms and pro-business policies. Naidu had become the poster boy of business and investor friendly policies much before Narendra Modi became the chief minister of Gujarat. He is continuing his legacy having come back to power after 10 long years. In Andhra, he has now succeeded in doing what Modi has failed at the national level. Instead of acquiring land outright and paying compensation to land owners, Naidu has made them equity holders with a guaranteed future income stream. The plan is a big success. Ranks 4, 5 and 6 are Chattisgarh, Madhya Pradesh and Rajasthan. In the first two, Dr Raman Singh and Shivraj Chauhan have won three consecutive elections. In Rajasthan, Vasundhara Rake Scindia lost her post in 2008 before storming back to power in the 2013 assembly elections.</div><div> </div><div>All three are pushing an aggressive reforms agenda and seem determined to transform the discourse in their states. All three are charismatic I their own ways, and are not overly dependent on Modi to deliver election victories. Some of the changes being pursued by trio on issues related to licenses, local taxes, land acquisition and labor reforms will definitely have long term consequences. And this is not about BJP alone. N. Chandrababu Naidu of Andhra too doesn’t depend on Modi to win elections or deliver on reforms. Ranked number 7 is Odisha whose chief minister Naveen Patnaik of the BJD has won four successive assembly elections. He too is not dependent on Modi’ just as Ahkilesh Yadav of Uttar Pradesh and J. Jayalalitha of Tamil Nadu are not.<br> </div><div>Perhaps the best outcome of this ranking will be visible over a period of time. Leaders have realized that if there is delivery on the ground, anti-incumbency becomes a non-issue. And hopefully, chief ministers of all states will take this up as a challenge. Quite frankly, no amount of rhetoric and fancy slogans of Prime Minister Modi will make a direct impact on ease of doing business if chief ministers do not play a proactive role. In fact, Modi is hoping that chief ministers will take up this challenge.</div><div> </div><div>For the rest of us, this will be one fascinating long distance race to watch! </div><div> </div>
