India Sees Opportunity As World Bank Audit Finds China Fraud In Doing Business Ranking

India hopes the massive fraud highlighted in the audit report of Doing Business ranking by the World Bank, which points undue pressure from China, would improve its ranking and help shift manufacturing supply chains to India.

On Thursday, the World Bank in a statement said it is discontinuing publishing its much sought-after Doing Business ranking after an external audit unearthed undue interference from its senior staff in changing rankings of specific countries.

A commerce and industry ministry official said no irregularities have been found in Indian data. “India remains the preferred investment destination for the world and a reliable, trustworthy destination, while China is slipping in attractiveness. Fraud by China will boost multilateral initiatives like supply chain resilience initiative to move manufacturing to India,” the official hoped.

In a move to counter China’s dominance of supply chain in the Indo-Pacific region, India, Japan and Australia in April formally launched the Supply Chain Resilience Initiative (SCRI).

World Bank’s reports have been mired in controversy in recent years with a former chief economist Paul Romer resigning from his post in January 2018, claiming that the methodological changes in compiling the report led to a downgrade in socialist Chile’s ranking. Romer was planning to review the reports of the past four years and recalculate the rankings.

The World Bank had hired American law firm WilmerHale which studied 80,000 documents and used extensive interviews to compile its report on 2018 and 2020 Doing Business rankings. During a sensitive capital raising year of 2017, China was able to leverage its clout and pressurise World Bank top management into reversing their ranking fall, which would have otherwise fallen from 78 to 85. On instructions from then-president Jim Yong Kim and then CEO Kristalina Georgieva, the Doing Business team was instructed to reevaluate China’s data to keep the rank at 78.

In a move to counter China’s dominance of supply chain in the Indo-Pacific region, India, Japan and Australia in April formally launched the Supply Chain Resilience Initiative (SCRI).

World Bank’s reports have been mired in controversy in recent years with a former chief economist Paul Romer resigning from his post in January 2018, claiming that the methodological changes in compiling the report led to a downgrade in socialist Chile’s ranking. Romer was planning to review the reports of the past four years and recalculate the rankings.

The World Bank had hired American law firm WilmerHale which studied 80,000 documents and used extensive interviews to compile its report on 2018 and 2020 Doing Business rankings. During a sensitive capital raising year of 2017, China was able to leverage its clout and pressurise World Bank top management into reversing their ranking fall, which would have otherwise fallen from 78 to 85. On instructions from then-president Jim Yong Kim and then CEO Kristalina Georgieva, the Doing Business team was instructed to reevaluate China’s data to keep the rank at 78.

India’s ranking improved from 142 in 2014 to 63 in 2019, with the Union government under Prime Minister Narendra Modi making concerted efforts to improve its business competitiveness ranking. India was aiming to be among the top 50 countries by 2021.

The opposition did not lose the opportunity to target the Centre on its excessive focus on improving the DB ranking. “World Bank’s Ease of Doing Business Index was among the few global indices where India’s rank post 2014 was proclaimed as rising. Now the exercise has been found bogus & discontinued. If they start an Ease of Fudging Data Index, Mr.Modi’s so-called ‘New India’ will top the charts!,” Congress leader Jairam Ramesh tweeted.

livemint.com

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