Fall in rankings: Karnataka may register protest to salvage investment image

Karnataka dropped to 17th position in the Ease of Doing Business ranking published by the Department for Promotion of Industry and Internal Trade from the eighth place earlier. The state came ninth in the first Export Preparedness Index (EPI) repo...

Agencies
B. S. Yediyurappa, Chief Minister of Karnataka
Bengaluru: Stung by the precipitous fall in twin rankings the Centre announced in quick succession early this month, Karnataka is mulling to dispute its places in the indices in view of the damage it could cause to the state’s brand equity in the eyes of investors.

Karnataka dropped to 17th position in the Ease of Doing Business ranking published by the Department for Promotion of Industry and Internal Trade from the eighth place earlier. The state came ninth in the first Export Preparedness Index (EPI) report - 2020, published by the Centre’s policy think tank Niti Aayog.

The Centre announces EoDB rankings based on 180 reform points covering 12 business regulatory areas such as access to information, single-window system and labour environment. EPI examines export preparedness and performance of Indian states based on the policy, business ecosystem, export ecosystem and export performance. “We are looking at both the rankings in detail and will take a call,” large and medium scale minister Jagadish Shettar told ET. Officials, however, confirmed that the state is indeed planning to file objections over the ranking methodology.


The state government is expected to be nuanced in its assertions and claims for a better ranking as Karnataka is also ruled by the BJP, and the ministers would not want to ruffle feathers of the Central leadership. As for the fall in EoDB ranking, the state’s officials suspect the political instability that enveloped Karnataka last year after 17 MLAs walked out of the JD(S)-Congress coalition regime just when the ranking survey was underway could have led to the latest loss of face. The data shows that Karnataka attracted the second highest foreign direct investment (FDI) equity inflows from October 2019 to March 2020. The state secured FDI investments worth 31,676 crore during the period, next only to Maharashtra ( 52,073 crore).

Industries department officials claim Karnataka is ranked No 1 in attracting investment proposals since 2016 and has received investments of about $ 37 billion in the past two decades constituting 9% of FDI inflows pan India. An official wondered how the state could have attracted such investments if things were not good for investors. Export data too show Karnataka topped the services exports and is in the fifth position in merchandise exports.

The NITI Aayog’s EPI ranking which places Karnataka in the ninth place has come as a shocker specially since the state has taken steps to promote exports on the lines of the Central government’s initiatives, officials say. The government, according to sources, may request NITI Aayog to revisit the EPI and make the ranking realistic.
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This is not the first time Karnataka is displeased with the Centre’s assessment methods. In February, chief secretary TM Vijay Bhaskar wrote to Niti Aayog pointing out 14 discrepancies in the Sustainable Development Goals India Index Report 2019, that had resulted in the state registering a low score.
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