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How To Increase Ease Of Doing Business?
Commerce and industry are at the helm of a tipping point and we should make the most of it by making sure businesses are encouraged.
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A lot of conversation has taken place about ease of doing business in India. We have done well in the recent past in this sphere but a lot more can be done. According to World Bank, New Zealand is ranked the highest in Ease of Doing Business Rankings, followed by Singapore. USA is at 6th position, UK at 8th, Australia at 14th, UAE at 16th, Germany at 22nd, Canada at 23rd, Russia at 28th, China at 31st, Italy at 58th and so on. India is at 63rd position. This is as per May 2019 study.
As of 2020, according to World Bank, India is ranked 136th in ease of starting a business, 27th in dealing with construction permits, 22nd in getting electricity, 154th in registering property, 25th in getting credit, 13th in protecting minority investors, 115th in paying taxes, 68th in trading across borders, 163rd in enforcing contracts and 52nd in resolving insolvency. These are the parameters which comprise the overall ranking mechanism.
Hence, we see, a lot of distance has to be covered to get to a level where we can say we truly are a rising superpower, from being an emerging economy. Simplification and breaking down cumbersome procedures created by institutions, in a nutshell, is what we need to achieve to create a healthier ecosystem for people to easily do business in India. There are many ways of doing that.
First and foremost, if at every nook and corner of the country, and in every level of governance, there is a lingering fear of bureaucratic roadblocks and bribes, people can’t rise. The whole concept is sickening. While things have improved, this needs to change and higher transparency needs to be instilled. People need to be comfortable that they can rise without breaking the law. Of course, there is an underground world that has bred in this muck, but cleaning it up can be fast if there is a strong will to do so. Laymen need to believe that they can get rich the right way, and till it is happening the wrong way, its infringing on the rights of others.
Complex and unnecessary documentation requirements need to be checked too. We need to start depending on digital signatures more, less filings and less control by state. While, that can lead to some amount of control withering away from the government, government in India is not considered a businessman’s best friend. That needs to change by making people believe that making money is a good thing, and they are not enemies of the state, but rather precious assets without which a country has little standing. Commerce and industry are at the helm of a tipping point and we should make the most of it by making sure businesses are encouraged. Rampant law enforcement, who then later settle for a ransom, surveillance and such things are not things favouring businesses and businessmen.
People filing for tender documents or signing government contracts need to go through a long and lengthy process, which need to be simplified and cut short. Number of signatures required need to go down by a lot too. Initialling every page, for example, can be replaced by “I agree” on an email, or of course, a digital signature. We can be as innovative as we like and we should be.
Our court procedures take years to resolve, this is one of the biggest deterrents for people using our legal jurisdiction. For this, computerization and more manpower is a must. Faster jury is key for ease of business.
People can’t be expected to move at snail’s speed and yet do business, it is a major waste of time.
Banking can use higher amount of autonomy, an industry regulated highly by Reserve Bank of India(RBI). We need to be able to send more money, as individuals, and companies through automatic route overseas for business. Banking should also be available for higher number of hours and there are just too many bank holidays, more than I can think of any place in the world. That slows down business. Domestic wiring of money too is slow, it can be faster, for example, the registration of receipients and the time lag between money sent and received.
Foreign companies as well as local ones need better access to land procurement in remote parts for potential manufacturing or assembly units. While, urban procurement is easier, we need to use the internet of things for facilitation of MSME(Micro, Small & Medium Enterprises), both local and foreign, to get hold of land and other facilities like labour, power, water, legal counsel, agencies and other amenities. These are enterprises which don’t get easy access to the government for help. Internet is a powerful tool and this done at the state levels, can be encouraging, not only locals, but also for foreign businesses. Only, if we remove bureaucratic barriers and convert bureaucracy into an asset, can we turn India around and achieve a V shaped recovery.
Our low labour prices are a boon and with the right minimum wage policy, exploitation can be avoided. Having said that, we have to work hard to skill the large population that isn’t educated, so they can work in different sectors. Sometimes, vocational training is enough. Our labourers are our strength, just like our farmers, they should be lauded.
We have to standardize English as a compulsory language as it is the language in which research has been carried out globally as well as it is the most widely spoken language in the world. In today’s day and age, enabling the vast majority that live in the interiors of India, in this language, can connect laymen to the world and give them unthinkable options. For this, literacy level has to rise. Vernacular languages and Hindi are languages that have been spoken for aeons in various parts of the country but the upcoming generation, due to access to mobile data and broadband, is exposed to the rest of the world to high degree, and education in English is increasing. That is a positive and can open doors to infinite progress.
In all, out of all of above, bureaucratic barrier is the biggest barrier as a system with low integrity cannot ever foster growth. Other than that, there is telecom penetration, better ports, road and rail infrastructure and other standard things that the government has already taken note of. Our air, water and land connectivity is improving. All that we need is for the deep pockets to look at India as a land, where equal opportunities exist, as sustainable investing is the norm of the day. We lack foreign funding despite being a projected growth story, but that is changing slowly. Statistical data and in depth information dissemination would be an icing on the cake. Crime rates need to be addressed as well for safety and comfort against frauds and even felonies, as well as for physical safety. We have major land disputes in Kashmir and terror is a big threat and deterrent for India to seem lucrative. We need to package India’s changing reputation well and address these issues.