Ease of biz' jump: A positive sign at last!

India’s leapfrogging 30 places in just a year to be ranked 100th of 190 countries in the ease of doing business index is an achievement Prime Minister Narendra Modi can rightfully be proud of. It’s his development vision that fuelled India’s efforts to cut red tape and feudal mindsets that shackled India till 1990s. India was 142nd when Mr Modi took over as PM. The World Bank’s ranking isn’t an infallible, sacrosanct benchmark, but it gives an idea where India needs to pull up its bootstraps going forward. The bureaucracy’s mindset still needs to synchronise with Mr Modi’s no-nonsense thinking, shaped by the community and state he comes from. The reforms too must move faster. Mr Modi understands the fire in the bellies of India’s entrepreneurs, who were suppressed under the earlier licence raj system.

The number of startups that have sprung up illustrates this. Their number is second only to that in the United States. It’s not that aspects of the licence raj system have disappeared completely today, but it’s less debilitating than earlier. Corruption and delays have been reduced, and the authorities have put decisions and tenders on the Internet for greater transparency. The government should be firm about this. Local bodies responsible for giving permissions for electricity, land, etc are yet to be disciplined. This will happen only if the timeline for permissions, etc are put online. This will enable applicants to see where the permissions are held up, and which ministry/authority is responsible. The usual practice in state headquarters and local bodies is to delay decisions till their palms were greased. This wasone of the biggest complaints by foreign investors. It is indeed an exciting time for entrepreneurs, foreign and domestic, and citizens who can now hope for hassle-free dealings with the authorties.

Much of the success of Mr Modi’s intentions of inviting foreign investment and his Make in India, Stand Up India programmes depend on the ease of doing business. Young entrepreneurs are reluctant to enter business, and many have fled to Singapore and other business-friendly locations as setting up a new enterprise in India is harder. This doesn’t mean foreign investors and investment didn’t come. India is after all the world’s largest consumer market. But now that flow may be even better as the World Bank’s ranking will burnish India’s image as an investment destination. In business-friendly countries it takes just a day to start a business, while in India it could take up to a year, depending on its size and nature. Mr Modi tried to change this from the day he took over, and he has succeeded. The next goal is to be ranked among the top 50, and this will be a Herculean task, but not unachievable under Mr Modi’s personal watch.