Finally, the government appears to be taking some concrete on-the-ground action to make it easier to do business in this country. The latest move is to introduce a single e-form in place of at least five such e-forms that had to be filled up separately by entrepreneurs and those wishing to set up a new business. While this is welcome, the expert committee that was appointed last month to examine the issue of replacing multiple prior permissions with an easier mechanism should have specified a timeframe to clear the form and grant permission. In many countries it takes just a day to set up a new business.
After around one year of discussing the 100-odd archaic laws that need changing, one would have expected much more on the ground. Exporters and the construction industry, for example, still have a problem with multiple forms and delays, and exports that are vital for the manufacturing sector are dwindling instead of increasing. There is a need to take a holistic view on whether to dispense with archaic rules or labour reforms that were also announced last week, else the thrust of the reforms wouldn’t be felt. It would then be like a three-legged race. The huge gaps between announcements and implementation of reforms needs to be done away with as many new measures lose efficacy if not accompanied by related reforms. Perhaps Prime Minister Narendra Modi should look into the reasons for these gaps.
The government has, for instance, cleared projects worth billions, but why aren’t they implemented? The reason is that companies are over-leveraged and unable to borrow easily and banks are left with huge NPAs as infrastructure projects are stuck, and so they are reluctant to lend. There was talk of breaking this logjam by setting up a SPV to take over the bad loans of banks, but there has been little movement on this front.
It isn’t enough that Prime Minister Modi is a man in a hurry: as somehow his vision of a vibrant India, and his commitment and urgency haven’t seeped into the work culture of most of the bureaucracy, most chief ministers and his own ministers, particularly those responsible for agriculture and commerce, two vital areas. To overcome this, the PM is now too dependent on officials, but all his cajoling and pep talks to the bureaucracy are yet to yield results. In his meeting last week with bureaucrats, it would have been interesting to have had the report of a monitoring committee on the work done by officials. It would effectively help to bridge the gap between announcements and their implementation.
