World Bank may think Ludhiana is the “easiest” location to do business in the country, but the top slot has only surprised and amused industrialists, businessmen and industry associations.
A cross-section of industry bodies said it is surprising that Ludhiana, a city reeling under severe power cuts, infrastructure breakdown and a credit crunch, with a number of units migrating to other states offering special concessions, has been rated the best city to do business by none other than International Finance Corporation, the lending arm of the World Bank. They feel Ludhiana, which is often called Manchester of India, has been given top ranking mainly because of the ease of paying taxes and ease of closing a business.
PD Sharma, president of Apex Chamber of Commerce, Punjab, told FE, “There are about 10,000 small and medium enterprises in Ludhiana, but only about 3,000 units are performing well. The others have closed down or are on the verge of closure because of credit crunch. In the circumstances, it is surprising that Ludhiana has got top billing.”
SC Ralhan, chairman, Export Promotion Council, Northern India, observed, “Everybody is surprised. Perhaps the report was prepared without taking the micro-economic conditions of the city into account. Ludhiana lacks quality infrastructure, power availability and labour flow. Who can do business without these parameters.”
Vinod Thapar, president, Knitwear Club, said, “Ludhiana accounts for nearly 90% of the country’s hosiery business and about Rs 10,000 crore annual business in value, but erratic power supply is a stumbling block.”
Sanjeev Goyal, an industrialist having spindle units in Ludhiana, said, “Ludhiana’s industrialists and businessmen feel proud of the rating, but were surprised too.” Without elaborating, he said perhaps the report would spur infrastructure building activity with the state government acting as facilitator.
In the first city-specific study of its kind, the IFC has said Ludhiana was the easiest location to do business in India, while Mumbai is the fastest location to start a business. Kolkata is at the bottom of the list.
Avijeet Ghoshal, an entrepreneur having business interests in Chandigarh and Ludhiana, told FE that perhaps bidding goodbye to Tata’s Nano had relegated Kolkata to the bottom. The study was conducted in collaboration with the commerce ministry and Confederation of Indian Industry (CII).
Charanjit Singh Vishvakarma, president, United Cycle Parts and Manufacturers’ Association, said Punjabis are a hardworking lot and the top ranking has much to do with their temperament and zeal for work. He said many units may have migrated to other states to avail special concessions, but if Ludhiana had better infrastructure, nobody would have left the city.