BANGALORE: The World Bank has stated that its survey report, "India Investment Climate Assessment 2004," has been "misrepresented" and "unfortunate conclusions" arrived at with regard to Karnataka.

The bank's Country Director (India), Michael F. Carter, said: "These points are made very clear in the World Bank's report and, therefore, I can categorically confirm that the report provides no basis for claiming that Karnataka was the most corrupt State in India in 2004." Mr. Carter has said that in a letter dated October 28 to Jayakar Jerome, Secretary to Maharashtra Governor S.M. Krishna.

Mr. Jerome had drawn the bank's attention in a letter on October 20 on the conclusion drawn on the basis of the report that Karnataka was the most corrupt. The World Bank and the Confederation of Indian Industry (CII) jointly conducted the survey covering over 1,800 manufacturing firms across 12 States, including Karnataka, in 2003 and prepared the report. Mr. Carter has said that while it is true that a higher proportion of the firms surveyed in the State during 2003 reported corruption as a major bottleneck for growth than in any other State covered by the survey, such perception-based rankings of constraints and the subsequent ranking of States do not indicate the absolute level of the difference across the States. For example, if a large proportion of firms in Karnataka (than in other States) perceive corruption to be the major bottleneck, that does not necessarily imply that the "absolute level of corruption in Karnataka is higher than in the other States," he has said.

The survey for the report was conducted using a standard, internationally tested methodology that the World Bank has developed to assess a country's investment climate. The methodology allows for two types of investment climate indicators: those that are based on factual questions addressed to firms and those that are based on the perceptions of firms operating in the State, the Country Director has said.

The indicators based on perceptions "is what seems to have provided the opportunity to misrepresent corruption issues in Karnataka. The methodology used for the perception-based indicators was: the firms surveyed in each country or State were asked to rank the obstacles they faced to business growth across the parameters of infrastructure bottlenecks, corruption, regulation, tax and customs administration, high taxes, access to finance, access to land, availability of skilled labour and macroeconomic instability," Mr. Carter has said.

Printer friendly page  
Send this article to Friends by E-Mail