India scores low on both business friendliness and human dev
Posted: Wed Oct 31, 2012 7:41 amIt’s tough doing business in India, says a World Bank-IFC study, ‘Doing Business 2013’. Of 185 nations covered, we rank an unimpressive 132nd in terms of ease of doing business, trailing behind neighbours Sri Lanka, Bangladesh, jihadi-ridden Pakistan and Maoist-influenced Nepal. Our Brics partners are ahead as well. Moreover, India’s ranking has dipped in several key parameters since last year’s report. For instance, on starting a business, dealing with construction permits and enforcing contracts, we’re now placed a dismal 173rd , 182nd and 184th respectively.
Granted, the picture’s not entirely gloomy. India’s been patted for improvements like simplifying and trimming cost of regulatory processes, and expediting processing of building applications via strict deadlines for preconstruction approvals. However, business still struggles with regulations whether applying to open shop, pay taxes or get power supply! The licencepermit raj may be gone, yet enterprises face tardy clearance processes. These processes, we know, are ridden with red tape and corruption. If anything, we should consider why we trip on both ease of doing business and human development indices. It’ll tell us why – contrary to populist propaganda – India needs more reforms not less.
Developed countries far outrank developing nations in business friendliness. Their citizens not only enjoy far higher living standards but also greater access to health, education and other services. Isn’t there an obvious connection there? In India, over 90% of the workforce ekes out a living in the unorganised sector, with the bulk of informal labour in agriculture. Can an aspirational society afford this? Common sense tells us business and entrepreneurship drive growth that, by creating prosperity, generates revenue for government to plough into the social sector. Clearly, on that count too we need to be a strong business and investment magnet.
We must rationalise procedures regarding clearances and permits, digitising processes wherever possible. We should also boost regulatory transparency, erect a non-arbitrary tax regime and facilitate smooth commercial dispute resolution. Business needs infrastructure be it electricity or communications, making this an area requiring focus and investment. Business also needs inputs like land and labour. Land acquisition rules must be revamped in a way that doesn’t inordinately escalate business costs. We must also junk outmoded labour laws that impede industry’s ability to take economically rational decisions and invest more in employees’ skill development. India’s an inherently entrepreneurial society. Let’s make it our business to remove hurdles in the path of business.
Granted, the picture’s not entirely gloomy. India’s been patted for improvements like simplifying and trimming cost of regulatory processes, and expediting processing of building applications via strict deadlines for preconstruction approvals. However, business still struggles with regulations whether applying to open shop, pay taxes or get power supply! The licencepermit raj may be gone, yet enterprises face tardy clearance processes. These processes, we know, are ridden with red tape and corruption. If anything, we should consider why we trip on both ease of doing business and human development indices. It’ll tell us why – contrary to populist propaganda – India needs more reforms not less.
Developed countries far outrank developing nations in business friendliness. Their citizens not only enjoy far higher living standards but also greater access to health, education and other services. Isn’t there an obvious connection there? In India, over 90% of the workforce ekes out a living in the unorganised sector, with the bulk of informal labour in agriculture. Can an aspirational society afford this? Common sense tells us business and entrepreneurship drive growth that, by creating prosperity, generates revenue for government to plough into the social sector. Clearly, on that count too we need to be a strong business and investment magnet.
We must rationalise procedures regarding clearances and permits, digitising processes wherever possible. We should also boost regulatory transparency, erect a non-arbitrary tax regime and facilitate smooth commercial dispute resolution. Business needs infrastructure be it electricity or communications, making this an area requiring focus and investment. Business also needs inputs like land and labour. Land acquisition rules must be revamped in a way that doesn’t inordinately escalate business costs. We must also junk outmoded labour laws that impede industry’s ability to take economically rational decisions and invest more in employees’ skill development. India’s an inherently entrepreneurial society. Let’s make it our business to remove hurdles in the path of business.