Ease of doing business
All over the world, countries are competing fiercely to be recognized as places where it is very easy and simple to do business. And within countries, provinces and states are vying to acquire this coveted tag. The reason is simple — foreign investment goes to destitions where doing business is easy. India’s latest ranking in the World Bank’s ‘Ease of Doing Business’ list is 130 out of 189 countries. This is not a healthy ranking, which is hardly surprising. After all, decades of license-permit raj after Independence tied up Indian business in all sorts of regulatory knots. The country’s latest ranking is in fact an improvement by 12 places over the previous year when it ranked 142. But there has been a perceptible improvement in foreign investment inflows into the country, especially after Prime Minister rendra Modi began to push his ‘Make in India’ campaign. Foreign direct investment (FDI) in the country grew by 27 per cent to 30.93 billion dollars in 2014-15; the manufacturing sector too witnessed a 45 percent growth in FDI to 7 billion dollars. The Indian government now wants the country to be positioned among the top 30 destitions as far as ease of doing business is concerned, and is going all out to convince the World Bank that it is taking meaningful steps towards this objective.
These reform measures include bringing government services phase-wise onto an e-biz platform to make it a single window for getting approvals and making payments, improvement in infrastructure, relaxation in company laws and export-import rules, speeding up environmental clearances, and bringing in a bankruptcy law to facilitate easier exits from loss-making businesses. But the major focus is on what tiol and state governments are doing to cut down the thicket of laws, rules, cumbrous procedures and paperwork — all of which deter entrepreneurial drive. However, the Indian corporate sector has been grudging in its appreciation of all these efforts. While the Central government has put in place building blocks needed for faster growth, it needs to do much more in making goods markets more efficient, introduce a countrywide goods and services tax (GST), bring about labor and fincial sector reforms, and improving transparency at all levels. But above all, the Centre has to take the states aboard when it comes to ease of doing business, corporate bodies feel. So to prod states to get their acts together fast, the Centre has started a policy to make them compete for recognition as favorite destitions for doing business. What is more, states which lag behind in simplifying their procedures for doing business will be ‘med and shamed’.
In September last year, Assam ranked 22nd among Indian states in the ease of doing business index. Gujarat, not surprisingly, was ranked first. But Jharkhand coming third, and states like Chattisgarh and Odhisa figuring among the top 10 should give the powers-be in Dispur plenty of food for thought; after all, these states have been fighting backwardness and Maoist violence for years. The list drawn up by the World Bank and the Centre’s Department of Industrial Policy and Promotion (DIPP) shows that Assam has a lot of catching up to do to attract investors. Therefore, the tabling of the Assam Ease of Doing Business Bill, 2016, in the Assembly on Wednesday last, has not come a day too soon. The proposed law will take the place of the ordince promulgated in February this year, following the launching of a single-window portal through which various government departments can be accessed to file applications for licenses, no-objection certificates, registrations and returns. While moving the bill, State Industry and Commerce minister Chandra Mohan Patowary spoke of the necessity for an investment-friendly environment if the State government is to implement the ambitious tiol e-Governce Project (NeGP). Only if this law is in place can Dispur plan a mission to move up among the states along a 98-point action plan that the Centre has laid down. The states ranking is based on parameters like setting up of business, infrastructure, land allotment, starting construction, getting electricity, registration for taxes, inspections for compliance of norms, labor reforms and environmental clearance procedures. All this will require movement across several fronts with inter-departmental coordition. In a depressed region where Mizoram, Meghalaya, galand and Aruchal are all at the bottom of the ‘Ease of Doing Business’ list, the Assam government has got its task cut out.