This is dialogue between Po and master Shifu regarding Ease of doing business ranking.
Po: Recently, World Bank has issued Ease of Doing index where India’s ranking is improved by 14 points from 77 in 2017-18 to 63 in 2018-19. We can say India is doing great on Economic front.
Shifu: May be. But for that we need to understand the methodology behind how this ranking is calculated.
Po: What is the methodology behind it?
Shifu: There are basically 10 parameters related to starting and running a business. Following are the parameters and ranking:
Po: We can see that our ranking is improved in most of the parameter except in Getting credit and Protecting Minority interest. But tell me one thing how the score is calculated.
Shifu: Countries are compared on these parameters with the Country performing best on these parameters and accordingly score is given. More nearer to the best performing country better will be the score.
Po: Okie. But tell me how they can give one score to one parameter. What I want to say , for instance, it may take 10 days to get electricity in metro city but may take 100 days to get electricity in some non-metro city. So how much score will be given to parameter “Getting Electricity”
Shifu: You hit the bull’s eye here, by asking this question. That’s why I told you to come to any conclusion you need to understand the methodology behind.. These score are measured only for two cities in India and that are Delhi and Mumbai. And they take their average. However, discussion on including Kolkata and Bengaluru is going on.
Po: Okie!! So Ease of doing Business in not exact picture of state of economic affairs of a Country. But we can say it provide an indicative picture.
Shifu: That is question of debate. Although most of the big businesses are registered in Mumbai and Delhi but their operation is spread across the country. Mumbai and Delhi are better than other part of country in term of governance, So , we can conclude here…..
Po: … that Ease of Doing Business ranking provide rosier picture of course of affairs than reality. But never-the-less we can say that we are improving.
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