Political slugfest over WB report

A World Bank report has ranked Andhra Pradesh at the second and Telangana at the 13th positions in terms of ease of doing business. This raises several fundamental questions. Which State is more adversely affected by the bifurcation? Which State has the legacy of backwardness? Such politically emotive questions are bound to come from political leadership of respective States.

Both Telangana and Andhra Pradesh claim to be business and industry-friendly States. Both have put in place fast-track and single window clearance systems. But, only Andhra Pradesh could pass the test of having the best single window clearance system in the country.

This raises a political debate in Telangana as the KCR government has been hard-selling its industrial policy as the best in the world. The conspicuous presence of NDA-ruled states including the likes of Madhya Pradesh, Chhattisgarh at the top of the list also raises the political hackles

The World Bank report entitled Assessment of State Implementation of Business Reforms ranks Andhra Pradesh as the second best State in India next only to Gujarat on ease of doing business. Andhra Pradesh standing way ahead of Telangana further assumes significance.

Andhra Pradesh registered 9.72 per cent rate of growth of gross state domestic product (GSDP) in the last quarter as compared to the national average of 7.1 per cent this data and the World Bank findings raise many an eye brow as the State government and the political leadership in the State have been arguing that the residuary State is economically crippled due to the manner in which the united Andhra Pradesh was bifurcated.

In fact, citing industrial backwardness and economic woes, Andhra Pradesh has been demanding special status and special package from the central government. Telangana which was carved out as a separate state 15 months ago stands at 13th position. The two regions of the united state were given so different rankings, that too after such a limited period post bifurcation.

This raises several fundamental questions. Which State is more adversely affected by the bifurcation? Which State has the legacy of backwardness? Such politically emotive questions are bound to come from political leadership of respective States, who are keen to exploit anything and everything to rouse sentiment that can serve as a political capital.

What will be the impact of this study, which is a partnership venture of World Bank, trade and industry bodies, on the claim and clamour of Andhra Pradesh for the special status and the special package? The study was also partnered by the Government of India, though the Centre wants everyone to believe that it was only a facilitator, if not an onlooker.

The ruling dispensation in Andhra Pradesh while celebrating the World Bank certification should be alive to the possibility of denial of special treatment to the State, showing the same data. The World Bank study categorises Andhra Pradesh as an ‘aspiring leader’ while it called for ‘acceleration’ in the state of Telangana.

Telangana can now argue with the Centre to support it more as the World Bank says acceleration is required in the State, rather than assisting Andhra Pradesh, which is already an aspiring leader as per the World Bank assessment. The report comes at a time when the Chief Minister of Telangana is wooing Chinese investment and the Government of Andhra Pradesh signing a record number of agreements in tourism and hospitality sectors.

Both Telangana and Andhra Pradesh claim to be business and industry friendly States. Both the States have put in place fast-track and single window clearance systems. But, only Andhra Pradesh could pass the test of having the best single window clearance system in the country.

This raises a political debate in Telangana as the government led by K Chandrashekar Rao has been hard-selling its industrial policy as the best in the world. In fact, Chief Minister KCR told the same to Chinese investors during his just concluded tour to our giant neighbour.

The World Bank uses among other things land allotment, environmental clearances as the indicators for the efficacy of the state‘s industrial policy. The government led by Chandrababu Naidu, the man who is often described as a darling of World Bank, is resorting to large-scale land acquisition despite simmering discontent and farmer protests.

The fragile eco system of river bed was ignored while conceiving the state capital Amaravati. The government faces stiff resistance to its land acquisition plans across the state from Amaravati, Machilipatnam in south Coastal Andhra to Bhogapuram in North Coastal Andhra.

Chandrababu Naidu in his earlier stint as the Chief Minister of united Andhra Pradesh initiated World Bank-sponsored reforms that incurred the wrath of the people and ultimately landed him in opposition for a decade. The bifurcation and the emotions surrounding it engineered by deft political management catapulted Chandrababu Naidu once again to power.

Political pundits and party circles alike are keeping their fingers crossed on whether the blessings of World Bank would prove to be a blessing or curse for him this time. During the 90’s, the World Bank described Naidu as a leader who had courage to take even political risk to implement economic reforms.

Perhaps, this image of Andhra Pradesh Chief Minister in the minds of domestic and global investors including the international financial institutions might have also helped the state which he rules to get better ranking. However, the presence of Telugu Desam in the ruling NDA at the Centre is yet another aspect that needs to be analysed while assessing the World Bank report.

The World Bank India Director Onno Ruhl acknowledged the support rendered by the Government of India in preparing this report. His foreword described the central government’s support as “continuous and unwavering.” The report carries the logo of Prime Minister’s pet programme ‘Make in India.’

An Additional Secretary to Government of India was present on the dais when the report was released. Even Commerce Minister Nirmala Sitharaman earlier in the week admitted the fact that the Department of Industrial Policy and Promotion (DIPP) of the Government of India had provided the inputs, based on which the World Bank gave the rankings for different States.

The conspicuous presence of NDA-ruled states including the likes of Madhya Pradesh, Chhattisgarh at the top of the list certainly raises the political hackles. The Government of India official present during the release of the report called it a thoroughly professional work. Such blanket certification to the controversial World Bank report would certainly strengthen the political slugfest over it.

Whatever may be the political hallabaloo over the report that places Andhra Pradesh among the top business-friendly states, such certification should at least help in attracting investment to a State that is trying to come out of bifurcation blues. The State government has drawn up an ambitious action plan to kick-start industrial growth in a state that predominantly agrarian in character.

Meanwhile the World Bank report has already raised many dissenting concerns in Telangana. The State of Telangana ranks among the top four states in information technology and information technology services exports. The mineral rich state has a robust coal production. The state capital has sizable presence of industries like bulk drugs, defence and aero space, heavy electrical etc.

Whatever may be the veracity of the World Bank findings, the report would certainly impact the investment decisions of domestic and foreign investors as the trade and industry bodies like CII and FICCI were also partners in this exercise. The time would tell how this World Bank report would play up in the competitive politics rocking the two States of Andhra Pradesh and Telangana.

By:Prof K Nageshwar