Congress MP Shashi Tharoor's wonder at the "astonishing tech and entrepreneurial transformation" under a 'communist-led LDF government" was a political jackpot for the LDF government. But no lottery win is an absolute blessing. It comes with its own set of problems.

The CPM now has to contend with the Congress attempts to rubbish the LDF's claims of industrial resurgence. Opposition leader V D Satheesan has particularly targeted two LDF achievements that Tharoor was impressed with: 'Ease of Doing Business' and the 'Year of Enterprises' initiative.

In both these cases, Tharoor seems to have taken industries minister P Rajeev at his word; on the contrary, Tharoor had picked up Kerala's "staggering" startup achievements from a reputed source: Global Startup Ecosystem Report 2024.

2-minute business
The astonishing speed at which industries are sanctioned in Kerala is an idea Tharoor seems to have absorbed from Rajeev. "Just a couple of weeks ago, Kerala’s industries minister P Rajeev announced that one can now open a business in Kerala in 'two minutes'," he said in his piece in the New Indian Express. That he has not independently verified the claim is clear from the next line. "If true and not just hyperbole, this is an astonishing development," he said.

The miraculous jump in Kerala's 'ease of doing business' rank is also an information Tharoor had received from the minister. "As Rajeev pointed out, Kerala has significantly improved its ranking in ease of doing business, moving from 28 (out of 29 states) to a top position," he said in his column. Tharoor then goes on to say that under the LDF government's 'Year of Enterprises' initiative, over 2,90,000 MSMEs have been established in the last three years.

So it was these two claims that the opposition leader sought to bust on Monday, February 17.

Investment-GDP mismatch
Satheesan argued that if nearly 3 lakh MSMEs were indeed set up then there should have been at least 2000 ventures in an assembly constituency. He said even if only Rs 10 lakh was invested it would have meant Rs 30,000 crore investment in three years. But he said such a huge investment was not reflected in Kerala's share in the national GDP, which he said had remained stagnant at 3.8 per cent. It was not reflected in the GST registrations either, he said. He said the new GST registrations in the state during the period were only 30,000.

The industries minister made light of the opposition leader's arguments, saying that he might have forgotten the basics of economics in his haste to debunk the LDF's achievements. "A Rs-10-lakh investment do not straight away get reflected in the GDP. It will take some time," he said.

Rajeev said if Satheesan had really loved Kerala, he should have presented Kerala's share in the country's GDP in a different way. He said Kerala's contribution should be seen in terms of its geographical area.

"Andhra and Telangana together make up 9.2 per cent of India's geographical area. They contribute 9.7 per cent to the country's GDP, which is 1.4 times its size. Karnataka is 4.9 per cent of India. It contributes 8.2 per cent of the GDP, which is five times its area. Tamil Nadu takes up 3.9 per cent of India, and it contributes 8.9 per cent of the GDP, and this is 2.8 times the area. Kerala forms 1.8 per cent of India's landmass and our share in the national GDP is 3.8 per cent, and this is 3.22 times its area," Rajeev said, and added: 'This is how a comparisons should be made."

Nonetheless, the minister was silent about Satheesan's charge that the government's claim of establishing nearly 3 lakh MSMEs was bogus.

Alter ego
As for the 'ease of doing business' ranking, Satheesan said that the rankings were abandoned by the World Bank in 2021 after some foul play was detected in the ranking system. At his press conference in Kochi on Monday, February 17, he refused to be drawn into any further discussion on the issue.

The industries minister but kept up his claim that Kerala had secured the first rank in 'ease of doing business' in the country even after the opposition leader's press conference.

Fact is, both are right. As Satheesan said, the 'ease of doing business' ranking was shelved in 2021 itself. A new ranking system was introduced in its place: Business Reforms Action Plan (BRAP) rankings. It is this ranking that the industries minister was referring to, though he still called it 'ease of doing business'.

Under BRAP, states are graded under four categories: Top Achievers, Achievers, Aspirers, and Emerging Business Ecosystems. In 2020, when the ranking was last published, Kerala was in the 'Aspirers' category, the second-last level. And in 2024, Kerala was not only placed in the 'Top Achievers' category, but it also topped in nine of the 30 reform parameters, the most among all states in the country.

Though Andhra Pradesh and Gujarat had also found a place in the 'Top Achievers' category, they topped in only five and three parameters respectively.

BRAP is just another word for 'ease of doing business' as this ranking system also evaluates the measures put in place by a state to facilitate entrepreneurship.

Kerala’s ease index
Kerala topped in two 'business-centric' and seven 'citizen-centric' reform areas. Kerala came first in the country in two 'business-centric' reforms: obtaining utility permits (business) and paying taxes.

Here are the seven ' citizen-centric' reform areas where Kerala topped. One, online single window system. Two, certificates related to urban local bodies. Three, certificates related to the Department of Revenue. Four, obtaining utility permits. Five, public distribution system. Six, transport. Seven, employment exchange.

Kuzhalnadan’s goof-up
Congress MLA Mathew Kuzhalnadan, who looks for the slightest chance to paw at the Pinarayi government, had found himself in an embarrassing situation last week when he argued in the Assembly that the industries minister was misleading the public about Kerala's 'ease of doing business' rank and that Kerala was actually ranked low in the 'Aspirers' category.

The industries minister then corrected him, saying that he was actually speaking about the 2020 rankings, and in the 2024 rankings, Kerala was the topper.