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BW Businessworld

Make It Easy

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Reforms don’t have to be big bang. Change doesn’t mean one loud proclamation. True change is a result of thousand small reforms. But successive governments in India still have not realised the  virtue of small changes.

The government keeps struggling to push through that one big reform. It tries to create a political consensus. It tries to weigh the electoral gains or losses of the change. It manipulates and strategises to pass the law in Parliament. All the while the change being planned is diluted to please or neutralise opponents. And finally when it does manage to implement the change, it collapses into exhilarated exhaustion. Unable to move till the next big move.

The recent ranking of the ease of doing business shows once again that big reforms are less important than lots of small changes that will make the life of an entrepreneur and citizen easier.

The ranking done by the World Bank group assesses countries based on six basic parameters. Dealing with construction permits, registering property, paying taxes, trading across borders, enforcing contracts, resolving insolvency.

India has been ranked 132 out of 185 countries. So the grand emerging economy is at the bottom of the heap in ease of doing business. Its ranking is the worst among BRICS countries as well. Large democracies like Brazil and South Africa are ranked better.

Many Indians tend to look down upon African countries. But this false sense of superiority should be punctured by the fact that about 15 countries from Africa are ranked much higher than India in ease of doing business.

This ranking also embeds parameters that are important for citizens. Issues like registering property, paying taxes and enforcing contracts are as important to citizens as to corporations.

Much of these reforms involve judicial and labour reforms. Life can be much easier if there is speedy justice. If contracts can be enforced the rule of law will be stronger. Many people will allow their property to be released in the market without worrying about losing it to tenants.

All these changes require a constant effort that centre and state governments are loathe to apply. Many of these changes are also governance and capability issues.

The national e-governance programme of the government has been trying to tackle some of these issues by creating efficient technology platforms. But technology alone will not be able to make it easier to do business. Some of the process created by the government only to maintain influence and control will have to be removed.

India can move up this ranking once the government recognizes this as a key target. The Prime Minister’s Office or the Planning Commission should set target for the country and start working on each of the parameters. Many cities are also ranked by their ease of doing business. State governments can also resolve to use these ranking to work on improving the atmosphere.

The biggest benefit for the government will be improved revenues from increased economic activity. Political parties can benefit from the new jobs that such activity will surely create.

It is time now for governments to tackle the many small changes that are needed instead of getting
stuck on one or two big reforms.

(Pranjal Sharma is a senior business writer. He can be contacted at [email protected])