INSIDE KERALA ASSEMBLY

Is Kerala number one in 'ease of doing business'? P Rajeev and UDF MLAs fight it out

Thiruvananthapuram: Ever since Shashi Tharoor raved about Kerala's industrial growth, the Congress has been on an overdrive to disprove the claim. It did not help the Congress that Kerala was placed in the 'Top Achievers' category in the latest Business Reforms Action Plan (BRAP) assessment of states.

Industries Minister P Rajeev found a smart way to market the achievement. He announced that Kerala has emerged number one in the country in 'ease of doing business'. The Congress in Kerala was livid. Their argument was that there was no such ranking. This unsettled debate about Kerala's 'ease of doing business' rank led to some intense verbal sparring during the Discussion and Voting on Demands for Grants in the Budget in Kerala Assembly on March 12.

Congress members, as usual, questioned the 'first rank' claim. The minister reasoned that since 2015, the 'ease of doing business' rankings done in India gave way to the Business Reforms Action Plan (BRAP) assessment. "When we secured 28th rank it was BRAP, and now when we have scored the first rank, too, it is BRAP," he said. 

In 2015, when BRAP began, marks were solely for reforms. "We implemented 22.80% of the reforms. Our rank was 18," Rajeev said. "In 2016-17, we implemented 26.9% of the reforms. Though we did more reforms, the rank came down to 20," he said.

Next time, in 2017-18, the weightage of marks was shifted fully to feedback. From then on, it was not enough to claim that reforms had been implemented, the ranking agency also had to be convinced that the reforms were happening on the ground. "At that time (2017-18), we had implemented 52.56% of the reforms. Our rank was 21. In fact, in 2019, we had implemented 85% of the reforms. Since the ranking was based on feedback, our ranking slipped to 28," he said.

In 2020, Kerala implemented over 90% of the reforms, but instead of getting a rank was slotted in the 'Aspirers' category. The way BRAP results were announced changed.

To describe what happened to BRAP in 2020-21, the minister used the change in SSLC evaluation. "In BRAP, like in the SLLC results, the rank system was done away with and replaced with grades," he said. Ever since, states were bracketed under four categories: Top Achievers, Achievers, Aspirers, and Emerging Business Ecosystems.

In 2024, Kerala, Andhra Pradesh and Gujarat were placed in the 'Top Achievers' category. Kerala topped in nine parameters, AP in five, and Gujarat in three. State that achieved above 95% in any of the total 25 reforms (15 business and 10 citizen-centric) were bracketed in the 'Top Achiever' category.

The minister pressed on with his SSLC analogy. "One student gets A+ in nine subjects. Another gets A+ in five, and a third has A+ in three. So who do you think is first? Of course, the student who scored A+ in nine subjects. That is why we said that Kerala emerged number one in India by going past Andhra and Gujarat," the minister said. He said BRAP was the new ease of doing business.

Congress MLA Mathew Kuzhalnadan, who has repeatedly expressed his suspicion about Kerala's top rank in the Assembly and outside, had a couple of queries. "In BRAP, there are citizen-centric reforms and business-centric reforms. Can you say that citizen-centric reforms influence the state's business environment? Are there states that had scored higher grades than Kerala in business-centric reforms?" 

Kuzhalnadan's logic was that Kerala has long before attained high achievement levels in citizen-centric reform and that business-centric reforms alone would decide a state's investor-friendliness. 

Under BRAP 2024, Kerala had topped in two 'business-centric' reforms: obtaining utility permits (business) and paying taxes. 

But most of its wins, seven, were in citizen-centric' reforms. 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.

Minister Rajeev had a counter for Kuzhalnadan's poser. "When we secured a poor rank of 28 (in 2019) why did you not tell this? Last time when we got 15, why didn't you put forward this argument? So you were happy when we were placed 15, and even further down at 28. Now if you are disturbed when we won the top rank it is only because you are against Kerala," he said. 

Palakkad MLA Rahul Mamkoottathil wanted a clarification. "Union Commerce minister Piyush Goyal came to Kerala and said that there is no 'ease of doing business' ranking. Then he said that if there was such a ranking Kerala would have gone way below," Mankoottathil said. The minister brushed it aside lightly. "You don't have to take it seriously," he said with a smile.

The minister said that last time when Andhra Pradesh topped in most of the categories they had carried page one ads across the country saying that there were the number one in 'ease of doing business' in India. "Then, no one wanted to know the difference between BRAP and 'ease of doing business'. All of you were busy applauding Andhra," he said.

Mamkoottathil was not in a mood to let the minister off the hook. "The question is very specific. What is Kerala's rank in business-centric reforms? Which are the states above Kerala in business-centric reforms," the Palakkad MLA said.

The minister said that the BRAP is a combination of citizen-centric and business-centric reforms. "A student has got A+ in nine subjects. But you cannot pick on her saying that two are for social science and seven are for social studies," he said, and added: "And if seven are for citizen-centric reforms, what is the big deal?" 

The Congress members were not convinced. But the minister had this to say: "When everyone, including AP chief minister Chandrababu Naidu and Amitabh Kant (Secretary of the Department of Industrial Policy and Promotion), says that Kerala is number one, isn't it our duty to jointly claim that spot. Instead, why do we want to go with a research mentality and ferret out minor shortcomings," Rajeev said.