The Daily Fix

The Daily Fix: Modi’s efforts to improve India’s ease of doing business rankings are paying off

Everything you need to know for the day (and a little more).

The Big Story: Easier

Soon after Prime Minister Narendra Modi took charge, his government made it clear that it wanted to move up the World Bank’s Ease of Doing Business index. The list examines the relative business regulation regimes of various countries and ranks them according to how simple it is to conduct commerce. This list is based on metrics such as how many licences are needed when starting a new company and how hard it is to shut one down. The report is based on quantitative data gathered in each of the countries it surveys, although because of the scale of the effort, the details tend to come from just the larger cities in each nation.

On Tuesday, when the most recent World Bank report was released, it was evident that Modi’s effort to move up on the list has paid off. India registered its largest jump on the index, moving from 130 up to 100 in just a year. But the great leap is vindication for the government, which has pushed through a number of changes in the hopes of altering India’s image of being a difficult market for foreign investors to enter.

On a number of metrics, India has seen a significant rise. The new insolvency law, for example, has helped India move up more than 30 places on that section of the list. On paying taxes, India has moved up from 172 on the list to 119, without the impact of the Goods and Services Tax changes being factored in. India remains one of the best in the world in protecting minority investors, moving up from 13 on the list to 4. Getting credit seems to have become easier, with the list saying India has gone from 44 to 29.

There are still some areas where India’s performance leaves much to be desired. In terms of starting a business, India is still one of the most difficult places in the world to do so, coming in at 156 on the list, one worse than the previous year. The index also saw India dropping on its property registration metric, down to 154 from 138 last year. On trading across borders as well as getting an electricity connection, India regressed.

Modi’s government is frequently accused of focusing on PR and managing headlines rather than improving the situation on the ground. But in matters like this, India’s image is about as important as the underlying factors. Since the list is built on what is supposed to be quantitative data, many believe that it is a reliable signifier of what it is supposed to be measuring.

Even if the findings are limited to doing business in Mumbai and Delhi, that is a huge positive, considering those cities are home to a signficiant portion of India’s economic activity. Even more promising is the fact that since GST was only implemented midway through this year, it hasn’t been factored in. This could push India even further up the list next year.

It is crucial for the government to capitalise on this momentum. The insolvency law, for example, is now being tested in real-life situations and the government must watch closely to ensure that it is serving the purpose for which it was framed. Self-goals like demonetisation and the chaotic manner in which GST was rolled out do not inspire confidence about the government’s ability to manage the economy – even if the signals to the outside world suggest India has become a better place to do business in. But overall the big jump in India’s ranking suggests this is one of those rare instances where the government’s promises to improve things are actually bearing fruit. This should set the stage for even more business environment reforms.

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Punditry

  1. “At present the rise of intolerance is alarming,” writes Soli J Sorabjee in the Indian Express. “Even a moderate expression of a different point of view is viewed with resentment and hostility and there are vociferous demands for bans.”
  2. Newly appointed interlocutor for dialogue on Kashmir Dineshwar Sharma speaks to Vijaita Singh of The Hindu on the Centre’s intention behind the talks and how Pakistan features in the larger conversation.
  3. “The recent issue of recapitalisation bonds by the government is a step in the right direction,” write C Venkat Nageswar and Soumya Kanti Ghosh in Mint. “Recapitalisation is a tried and tested tactic and has been successfully replicated in many countries, including India, in the past.”

Giggle

Don’t miss

Nayantara Narayanan brings you four charts that explain how climate change is hurting India.

“The most obvious direct impact of climate change on health is the exposure to rising temperatures, especially heat waves. The report estimates that 125 million more people were exposed to heat waves between 2000 and 2016 than in previous years. A record 175 million people around the world were exposed to heat waves in 2015 alone.

India has been disproportionately affected by heat waves, the report finds. Between 2000 and 2016, 125 million in India have been exposed to potentially fatal heat waves.

People over 65 are among the most vulnerable to heat and millions more people over 65 are being exposed to heat waves every year. Between 2000 and 2016, 31 million more people in India above the age of 65 have been exposed to heat waves than between 1986 and 2008.

The heat waves became considerably worse in 2014 when the average number of people over 65 exposed to heatwaves was 150 million more than in 1986-2008.”

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“My body instantly craves chai and samosa”

German expats talk about adapting to India, and the surprising similarities between the two cultures.

The cultural similarities between Germany and India are well known, especially with regards to the language. Linguists believe that Sanskrit and German share the same Indo-Germanic heritage of languages. A quick comparison indeed holds up theory - ratha in Sanskrit (chariot) is rad in German, aksha (axle) in Sanskrit is achse in German and so on. Germans have long held a fascination for Indology and Sanskrit. While Max Müller is still admired for his translation of ancient Indian scriptures, other German intellectuals such as Goethe, Herder and Schlegel were deeply influenced by Kalidasa. His poetry is said to have informed Goethe’s plays, and inspired Schlegel to eventually introduce formal Indology in Germany. Beyond the arts and academia, Indian influences even found their way into German fast food! Indians would recognise the famous German curry powder as a modification of the Indian masala mix. It’s most popular application is the currywurst - fried sausage covered in curried ketchup.

It is no wonder then that German travellers in India find a quite a lot in common between the two cultures, even today. Some, especially those who’ve settled here, even confess to Indian culture growing on them with time. Isabelle, like most travellers, first came to India to explore the country’s rich heritage. She returned the following year as an exchange student, and a couple of years later found herself working for an Indian consultancy firm. When asked what prompted her to stay on, Isabelle said, “I love the market dynamics here, working here is so much fun. Anywhere else would seem boring compared to India.” Having cofounded a company, she eventually realised her entrepreneurial dream here and now resides in Goa with her husband.

Isabelle says there are several aspects of life in India that remind her of home. “How we interact with our everyday life is similar in both Germany and India. Separate house slippers to wear at home, the celebration of food and festivals, the importance of friendship…” She feels Germany and India share the same spirit especially in terms of festivities. “We love food and we love celebrating food. There is an entire countdown to Christmas. Every day there is some dinner or get-together,” much like how Indians excitedly countdown to Navratri or Diwali. Franziska, who was born in India to German parents, adds that both the countries exhibit the same kind of passion for their favourite sport. “In India, they support cricket like anything while in Germany it would be football.”

Having lived in India for almost a decade, Isabelle has also noticed some broad similarities in the way children are brought up in the two countries. “We have a saying in South Germany ‘Schaffe Schaffe Hausle baue’ that loosely translates to ‘work, work, work and build a house’. I found that parents here have a similar outlook…to teach their children to work hard. They feel that they’ve fulfilled their duty only once the children have moved out or gotten married. Also, my mother never let me leave the house without a big breakfast. It’s the same here.” The importance given to the care of the family is one similarity that came up again and again in conversations with all German expats.

While most people wouldn’t draw parallels between German and Indian discipline (or lack thereof), Germans married to Indians have found a way to bridge the gap. Take for example, Ilka, who thinks that the famed differences of discipline between the two cultures actually works to her marital advantage. She sees the difference as Germans being highly planning-oriented; while Indians are more flexible in their approach. Ilka and her husband balance each other out in several ways. She says, like most Germans, she too tends to get stressed when her plans don’t work out, but her husband calms her down.

Consequently, Ilka feels India is “so full of life. The social life here is more happening; people smile at you, bond over food and are much more relaxed.” Isabelle, too, can attest to Indians’ friendliness. When asked about an Indian characteristic that makes her feel most at home, she quickly answers “humour.” “Whether it’s a taxi driver or someone I’m meeting professionally, I’ve learnt that it’s easy to lighten the mood here by just cracking a few jokes. Indians love to laugh,” she adds.

Indeed, these Germans-who-never-left as just diehard Indophiles are more Indian than you’d guess at first, having even developed some classic Indian skills with time. Ilka assures us that her husband can’t bargain as well as she does, and that she can even drape a saree on her own.

Isabelle, meanwhile, feels some amount of Indianness has seeped into her because “whenever its raining, my body instantly craves chai and samosa”.

Like the long-settled German expats in India, the German airline, Lufthansa, too has incorporated some quintessential aspects of Indian culture in its service. Recognising the centuries-old cultural affinity between the two countries, Lufthansa now provides a rich experience of Indian hospitality to all flyers on board its flights to and from India. You can expect a greeting of Namaste by an all-Indian crew, Indian food, and popular Indian in-flight entertainment options. And as the video shows, India’s culture and hospitality have been internalized by Lufthansa to the extent that they are More Indian Than You Think. To experience Lufthansa’s hospitality on your next trip abroad, click here.

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This article was produced by the Scroll marketing team on behalf of Lufthansa as part of their More Indian Than You Think initiative and not by the Scroll editorial team.