New Delhi [India], April 14 (ANI): India should work towards evolving a political consensus to improve the nation's ranking in "ease of doing business" to unleash the growth and employment potential and to derive full benefit of the demographic dividend, according to Indo-American Chamber of Commerce (IACC).
"In a federal set up like India, where there are three lists - areas to be addressed by Centre, states and both Centre and states - a harmonious and seamless policy framework is inevitable to push the reform process and make India an important destination for investment both from within and abroad. There are perception drivers, which embolden the investors to channelize their business activities. World Bank's Ease of Doing indices are one among them, which we should focus to move in value chain," says Mr. N V Srinivasan, National President, IACC.
Admittedly, India has improved its ranking in the Ease of Doing Business 2017 report of the World Bank in four of the ten indicators - trading across borders, getting electricity, enforcing contracts and paying Taxes. But the overall position, which remained at 130 among 189 countries, is a matter of great concern. " The urgency in improving the rankings has been stressed by the prime minister when he told the chief secretaries and all secretaries of the Government of India to study the World Bank report and analyze the potential areas that need fine tuning on an urgent basis," Mr. Srinivasan said. Importantly, the low income countries move faster in the ranking pecking order than the developed economies.
The IACC observed that industry and every other segment of the society should introspect on the ease of doing business and come out with a roadmap to make India move up the growth chain. Areas that India should fast track in improvement of the ranking are credit delivery systems, protecting investors, resolving insolvency, entrepreneurship etc. Proposed introduction of Goods and Services Tax (GST) is an area that can be a game changer in the Indian situation. There are similar areas in the fiscal structure, such as Income Tax, corporate tax etc, where it is perceived by the foreign investors that Indian rates are still high. In addition to these, the foreign investors feel there are bureaucratic delays and economic uncertainties that loom large in the Indian context, which hold them back from investing in the country.
Each department both in the center and states should introspect on what more should be done and hold regular parleys with stakeholders to assess the challenges on the ground, prospects and to crystallize methods to act on the suggestions. A case in point is the recent consultative paper brought out by Telecom Regulatory Authority of India (TRAI) mainly to address the ease of doing business in India in the telecom sector. TRAI has identified in consultation with the stakeholders, a number of areas that include issues relating to consumer protection, quality of services, financial health of the players, issues relating to broadcasting sector etc. as major hindrances. A number of steps are being taken to address those issues, such as revisiting tariff orders, promoting internet and broad band penetration, promoting access to 2.5 lakh common service centers across the country to seek redressal of the civic problems etc.
Calling for emulating the example across the country and departments at the micro levels down to the local self-governments, IACC suggested that every layer of the society be involved in the process. For instance, industry should not only imbibe what are fair business practices but also implement them in letter and spirit. The cost and time over-runs are another factor, which adversely affect the development tempo. Some of these are on account of the cumbersome land acquisition, weak financial delivery systems, increasing number of sickness and bankruptcies etc.
The IACC observed that the Government of India has done well in ranking the states based on the parameter of Ease of Doing Business. Andhra Pradesh and Telengana are the new joint top ranked states followed by states like Gujarat, Chattisgarh and Madhya Pradesh. The report prepared by Department of Industrial Policy and Promotion (DIPP) and World Bank tracks the level of implementation of norms by states and how they favorably impact doing business. While there are forward states, which are doing commendable works, the laggards like North Eastern states and Jammu should be encouraged to move in the value chain.
The IACC opined that many of the US corporations are keenly interested in tracking the rankings of the Indian states. For instance, there is a huge interests shown by the US corporations in Telengana and Andhra Prades by investing both in the manufacturing and services sectors. A number of US corporations have invested in Hyderabad in sectors varying from aerospace to R&D. In Andhra Pradesh, the newly set up Medical Devices Park has evinced keen interest of the foreign investors.
One of the focal points for spreading ease of doing business is targeting at small and medium enterprises and startups, which though contribute smartly to nation's development and in creating employment, are also witnessing widespread sickness. " We are closely looking at some of the big ticket programs to enhance the bonding of the SMEs between India and the US not only to enhance the competiveness but also help Indian industry to assimilate the best business practices," Mr Srinivasan observed.
The IACC has urged that the vast network of chambers of commerce and commodity associations in India, numbering over 500 or so, which is a unique feature of India, should be leveraged to spread awareness of ease of doing business, because of their reach and direct links with both the industry and the government.
The governments both at the center and the states should use this network to map industry challenges and in sensitizing industry the need for adhering to quality and standards, which will ultimately benefit the business entities, IACC felt. (ANI)