Can you ease, when you are so tight?

India has jumped 30 places in the 'Ease of Doing Business' rankings of the World Bank, announced yesterday. A cock-a-hoop Finance Minister boasted, "Evaluation for the ease of doing business rankings is very tough. The ranking does not reflect the reform measures unless the outcome is visible on the ground." He believes that our rank will go up further next year when the Goods and Services Tax, or GST, introduced this year, is taken into account. So, a patiala peg all round? No. We are still at 100, three places below Guatemala, which has an extremely high rate of violent crime, and 33 places below Greece, whose economy is in intensive care. "The World Bank said that while there has been substantial progress, India still lags in areas such as starting a business (156), enforcing contracts (164) and dealing with construction permits (181)." How did it happen? Previously the World Bank surveyed only Mumbai but this time both Mumbai and Delhi were surveyed. Various permits can now be obtained online and India jumped from 170 in 2015 to 26 in 2017 on the parameter of 'Getting Electricity'. We may have gone up in the 'Ease of Doing Business' but we have dropped one place on 'Starting a Business', 16 places on 'Registering Property', and 3 places on 'Getting Electricity Connection'. Of course, getting a meter is not everything. A sudden black out, which is common in most parts of the country, or swings in voltage can severely damage equipment and cause huge losses. "The insights the World Bank compiles are extremely useful, but they are not necessarily representative of what firms experience in real life," wrote Lillehaugen and Vaishnav. Perhaps, the most important metric is "how India rates on the so-called 'Distance to Frontier' (DTF) measures, which capture the ease of doing business compared to the highest score any country has ever received in any given category". This compares how we perform compared to our competitors, and on this metric we have scored 60.76 compared to 56.05 last year. Good. Are we going to challenge for number one soon? Unlikely. One reason is that there are 75 ministers in the central government, each with a retinue of civil servants. Each of them wants to show his power to justify his humongous salary and perks. Salaries and junkets of ministers budget Rs 2.61 billion. The vaunted GST is so complicated that few understand how it works. Vast amounts of money are needed for handouts to win elections, Rs 110 billion has just been showered on Gujarat, which has to be wrung out of the people. Politicians do not understand why only 28.2 million pay income tax when there are millions of houses worth billions. It wants people to inform authorities if they suspect anyone of buying property with black money. Thing is, 89% of households live in their own homes, majority of which have been inherited. If they ease too much they may lose taxes. Horrible thought.