Recommendations

Decentralisation: EEI has to be viewed in the context of understanding the overall economic environment in a district that is available for the economic agents, namely the firms and households to leverage their resources to foster their economic wellbeing, in a sustainable manner. It is important to recognise the district level variance within the state as revealed by the data and ranks, which reflect the different needs of the districts. This calls for a meaningful and targeted decentralisation in the administrative and planning process. Indeed, the Planning Commission of India has taken cognisance of the need for decentralised planning process at the district level and further at the panchayat level in the Eleventh Five Year Plan, and has released a “District Planning Manual” to help this process, which has been elaborated earlier in the report. Specifically, it calls for efforts to identify “…infrastructure status and gaps, the aims and vision of the local people and weighing options of lead sectors…” to foster inclusive growth. EEI could be used as one indicator of these gaps. A decentralised planning and executive process promotes better and faster development. However, it is imperative that best practises are shared among districts, for decentralisation to work effectively.

Leverage on established strengths: Research in countries where measuring economic governance has been practised for over a decade has shown that implementing an actionable programme based on EEI findings, improves overall economic progress of the regions. More importantly, research has also shown that there is a spread of improved governance performance in districts around geographies that show higher ranking in EEI – implying that districts surrounding better performing districts catch up on governance over a period of time.¹

Plan and execute targeted governance programmes: EEI provides valuable information on how districts perform in different areas of economic governance. It is a useful and indicative guide for local officials, the private sector, and other stakeholders to compare the performance of their area to that of other localities and identify the strengths and weaknesses of their economic environment. Therefore, it would be ideal if the stakeholders – primarily the Government of Tamil Nadu and the CII utilise the rankings – both the overall and the sub-indices to actively target specific governance measures at specific geographies.

Concentrate on parameters that show higher weight in order to ensure greater equality across districts: EEI is a construct with a number of sub-indices, within each of the broad groups. Some of the parameters show higher variance and these result in higher weights observed for these parameters in the overall construct. Concentrating on such high variance parameters can help bring uniformity or a geographical level-playing field for the economic agents – namely the firms and the households.

Low score in EEI may be indicative of rapid development or other pressures on government services: Pressures on economic governance are not uniform across districts. Obviously, a district which attracts lot of investments or has a higher population density has an excess demand for various regulatory and public utility services provided by the government and this is reflected in EEI ranks. It could be that the government machinery needs to be larger at these locations for better governance and development, and also to sustain the growth process. An active involvement of the respective district authorities in the planning process would help improve the score of such districts.

Strengthen local entrepreneurship: Beyond the large cities, across the districts and in smaller towns, it is the local entrepreneurship that supports and sustains the economic activities and provides employment for the populace. The households’ ability to leverage their resources and pursue economic opportunities is bound by the economic environment that they face in the district. EEI could be used as a tool to identify constraints in the economic environment and also the relative strengths that act as the driving factors for the district, thus enabling targeted interventions to promote, sustain and strengthen entrepreneurship, economic growth and overall development.