Kerala worried over ‘ease-of-business’ rank after Kitex row

Kerala Chief Minister Pinarayi Vijayan
Kerala Chief Minister Pinarayi Vijayan

Thiruvananthapuram: The Kerala Government’s enthusiastic efforts to improve its poor rank in the ‘ease-of-doing-business’ index prepared by a Central government agency may come a cropper following the ongoing Kitex controversy. Incidentally, the row has erupted while the agency - Department for Promotion of Industry and Internal Trade - is engaged in the task of preparing its latest rank-list. Kerala’s aim is to improve its rank from the present 28 to one among the top ten.

The ranks are decided based on the programmes implemented by the state government as well as feedback from industrialists. In the previous years, Kerala’s feedback score had been very low. The feedback score is decided by the Centre after seeking the response from industrialists operating in the state. The industrialists from whom opinion is sought are selected by the Centre from a list submitted by the state. This year, Kerala has given a list of 14,725 entrepreneurs.

Keen to improve its rank this time, Kerala has been holding weekly meetings chaired by the Chief Secretary to assess the progress of the implementation of the industry-friendly programmes. Heads of 18 departments attend this weekly meeting, while the Minister himself would be present on alternate weeks.

High hopes

Before the Kitex issue erupted, Kerala was optimistic about improving its ranking as the state had completed a majority of the business-friendly programmes planned by it. Moreover, recognizing these efforts, the Union Finance Ministry had allowed Kerala to avail an additional loan of Rs 2,261 crore last year. In fact, Kerala was only the eighth state in the country to earn this benefit.

This year, Kerala has already implemented 238 of the 301 modifications suggested by the Centre. While 47 suggestions are not applicable to the state, action on 16 – involving the Revenue and Legal Departments - is yet to be taken.

Investors’ concern

At the same time, industrialists and investors point out that even though the Kerala Government often announces various projects, many of them are not implemented. For instance, the Kitex row erupted while the government had taken no action even after one year on a promise to set up a centralized system to carry out checks in industrial units.

‘Unscientific ranking’

Meanwhile, Kerala has often raised the issue of unscientific methods in the ranking process. However, the Centre is yet to respond to these charges. According to Kerala, the land is scarce in the state and the same guidelines should not be applied to compare it with other regions where availability of land is not a problem. Kerala has also said that the criterion for the ranking is not revealed before the process is carried out.

According to the Business Reform Action Plan of 2019, each state and union territory in India had to complete 187 tasks, of which Kerala achieved 157, with a success rate of 85 per cent. Curiously, while Kerala was ranked a mere 28, Lakshadweep, which did not implement even a single task under the ease-of-doing-business category, received Rank 15 and Odisha, with a completion rate of 96 per cent, earned Rank 29.

Kerala’s ranks in the previous years

2015 – 18

2016 – 20

2017 – 21

2019 – 28

2021 – Awaited

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