Kerala sprang a surprise in the latest Ease of Doing Business Reforms ranking, released by the Union Ministry of Commerce and Industry on Thursday, by topping the chart. The state, long pilloried for its industry-unfriendly character and recurring labour strikes, has been taking proactive steps in recent times to promote businesses and woo investors. And these efforts seem to be paying off. Of the 10 citizen-centric reform areas and 20 business-centric areas considered for the ranking, Kerala topped in implementing seven citizen-centric reforms and two business-centric reforms.
The two business-centric reforms where it emerged as a top performer are: facilitating utility permits for business and paying taxes. The citizen-centric reforms are: online single window system, certificate issuance by urban local bodies, certificate issuance by revenue department, providing utility permits, public distribution system, transport, and employment exchange.
To put things in perspective, Kerala’s performance in the more important Ease of Doing Business ranking (not to be confused with the latest EODB-reforms rankings) is still below par, though it has been making progress. Kerala stood at the 15th place in 2022, a remarkable jump from the 28th position in 2019. While Kerala’s gains over the past two decades in terms of human development indicators—high life expectancy at birth, low death rate, balanced male-female ratio, high literacy rate, and low poverty incidence—are commendable, its image as a “business-unfriendly” state was coming in the way of attracting investments. Also, the delay in clearances, especially at the local self-government level, often frustrated investors, especially small and medium players. Big investors, however, do not face such delays as they have access to the powers that be—which highlights the disturbing lack of a level playing field.
The ranking shows Kerala is moving in the right direction, slowly plugging the bottlenecks at various levels. Also, it will help the state showcase itself and tell investors it means business. The Communist government has sent out the message that it wants businesses to come so they can create jobs for youngsters who are growing restless due to lack of opportunities. Kerala still has a long way to go in terms of providing a good environment for businesses to thrive, but it must be said that it has begun well. And as they say, well begun is half done. Now, the government should ensure that the momentum is not lost.