World Bank-CII Investment Survey Soon

Bangalore, May 22: | Updated: May 23 2003, 05:30am hrs
World Bank and Confederation of Indian Industry (CII), which are currently involved in the second survey on Investment Climate In Indian States, proposes to release it in September-October this year. This would be the second survey after its first survey which was released in January 2002.

Mr David Dollar, WBs manager of macro economics and growth development research group told FE on Thursday, that the survey would mainly cover issues relating to the continuing Inspector Raj, power reliability, logistics and linkages with the international market. Nearly 1,500 firms from textile and garments, pharmaceuticals, auto components and electronics were being covered in the ongoing survey. Mr Dollar was speaking on the sidelines of the Annual Banking Conference on Development Economics (ABCDE).

The survey will mainly compare the situation, which was prevailing during the January 2002 joint survey of WB-CII and now.

What are the real changes and have states really gone in for improving the investment climate, he said. According to Mr Dollar, the ongoing survey also includes whether various state governments have created constructive regulations or has there been too much of regulation.

There has been a lot of dynamism in India and various measures have been taken by states to improve the investment climate. The survey tries to take into account these factors too, he opined.

Mr Dollar said that the importance of governance and institutional capacity was a critical element of the investment climate. The WB-CIIs first survey had found that companies in Uttar Pradesh had to contend with visits from bureaucrats twice as often as firms in Maharashtra. Tackling governance would require building up local community organisation and accountability mechanisms.

It would require pushing more aggressively to implement the 73rd and 74th constitutional amendments - devolving power to local governments, while working to strengthen community self-groups. According to the same survey, there has been an immense importance to public infrastructure and market access - power, water sanitation, roads and transport. Probably the single greatest factor preventing farmers in Bihar or Orissa from achieving comparable productivity standards as Punjab or Harayana in agriculture and agri-industry processing was the investment in rural infrastructure.

Rural power, road connectivity and water control rate were critical to introducing new technologies and for getting goods to market. u vv