State's Doing Biz ranking, a red flag

Those who have been watching Karnataka’s administration from close quarters for some time would not in the least have been surprised that the state has abysmally slipped from the 9th to 13th position in the ‘Ease of Doing Business’ ratings this year. The rankings, done by the Centre’s Department of Industrial Policy and Promotions in collaboration with the World Bank and based on a comparative analysis of specific business reforms measures undertaken by various states and Union territories, have found Karnataka woefully falling short in many respects. When other states are wooing investors aggressively and laying red carpet for them, Karnataka continues to be highly bureaucratic in its approach. Its so-called single window agency for various clearances is nothing but a sham. Even when attractive offers come knocking on its doors, decisions are never taken quickly. In a number of departments, the much-publicised e-applications and e-approvals remain only on paper. The state officials love to see the files on their tables as they move through the labyrinthine corridors of power, and unless someone follows them meticulously, greasing many palms along the way, they have a tendency to hit the roadblock. This is the reality of Karnataka and both Chief Minister Siddaramaiah and Industries Minister R V Deshpande have to squarely take the blame for doing nothing to improve the situation.

Apart from attracting the services sector, primarily the Information Technology companies, which flocked to Bengaluru because of its highly skilled talent pool and salubrious climate, Karnataka has failed to promote the state’s industrialisation due to a policy paralysis. There’s little effort made to decentralise its industrial base and make the tier-II cities attractive destinations for investment. The availability of suitable land is one of the key components, but the lethargy and incompetence of the officials of the Karnataka Industrial Area Development Board (KIADB) – who are entrusted with the job of identifying and facilitating their transfer to potential investors – make the state’s case that much difficult. Two other important requirements, electricity and water, are perennially in short supply and little effort has been made to address them adequately. Add to this the creaky urban infrastructure, ever mounting vehicular congestion and frustrating traffic bottlenecks in Bengaluru city, and it is no wonder that Karnataka is going down the preferred investment destination ladder.

If Andhra Pradesh and Telangana, despite facing the difficulties of adjusting to their bifurcation, have jointly topped the list scoring over 98% in the 340-point business reform action plan, it is a tribute to the statesmanship and hard work of their respective chief ministers, N Chandrababu Naidu and K Chandrashekhar Rao. Competition is always a good sign, and Karnataka should pull itself up to regain some of its past glory.