India takes cudgels against World Bank-IFC study

New Delhi, Dec 15 (UNI) The Indian government today took up cudgels against the World Bank-International Finance Corporation(IFC) study which has ranked the country 134th among 175 countries on various parameters of business environment, saying that the findings are at variance with the widely accepted view that India is a major emerging economy in the world.

"The government disagrees with the ranking reflected in the 'Doing Business 2007: How to Reform'," Finance Minister P Chidambaram informed the Lok Sabha in reply to a spate of supplementaries relating to the Report.

''The Government rejects this report'', the Finance Minister said adding that such studies rarely affect the inflow of FDI to the country.

Referring to the time taken to start a business in India, the Minister said that according a global study, ''while obtaining all relevant clearances takes 16.6 days for a project in the OECD countries, this exercise entails around 32.5 days in countries of Asian region and nearly 35 days in India.'' However, Mr Chidambaram said, attempts were being made by the government to reduce the time-period for clearances in the near future, with clearence requiring 30 to 35 days or even less.

Mr Chidambaram dismissed as mythical demands for a 'single window' clearance for industrial projects.

''The single-window clearance is a myth we are trying to propogate. Clearance for projects has to be taken from several authorities, like local municipal authorities, environmental, power and other related bodies,'' he said.

He stressed that the time span for each clearence needs to be reduced and project clearance made hassle-free.

Mr Chidambaram said the Reports findings are based on a selective methdology which excludes many parameters that are relevant to business-- it is based on a survey with limited coverage, namely, some industries in one city; it does not take into account the policy initiatives of the Government; and does not involve consultations with major stake holders like government and industry associations.

The Finance Minister said some of these limitations of methdology have been acknowledged in the Report itself.

Mr Chidambaram said India's views have been conveyed to the Management of the World Bank and IFC through the country's Executive Directors.

The Finance Minister was vehement that that the poor ranking by the two sister organisations has not had any adverse impact on the economy of the country. To support his point, Mr Chidambaram said the GDP growth rate for FY 2005-06 was 8.4 per cent and for the first half of the current FY it was 9.1 per cent.

''Improvement of various parameters of business environment is an ongoing process and the government is addressing it continuously through various policy initiatives,'' Mr Chidambaram said.

The IFC is the private sector lending arm of the World Bank.

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