The Government should ask itself: Why are Indians investing billions of dollars abroad but not in the home countryIJ The answer is simple: The costs of starting a new business in India are prohibitive
On October 2014, Prime Minister Narendra Modi unveiled key labour reforms to end the ‘inspector raj’ and ensure Make in India’s success. He said, “Ease of business is the first and foremost requirement if ‘Make in India’ has to be made successful.” Any time is always right to do the right thing. But in India, the Union Government and State Governments often work at cross-purposes. The way in which the bureaucracy has been allowed to expand, is beyond our comprehension. In some cases, jobs have been created even where there is not enough work, and in other cases, jobs that became redundant years ago have not been abolished.
In February this year, the Principal Secretary, Tourism and Culture, Maharashtra, admitted, “To set up a hotel, one needs 146 permissions. These are decadent rules, one needs a thick skin to get through all these permissions.” He added that the Maharashtra Government would cut down the permissions for setting up of hotels, from 146 to just 20, to boost the tourism industry.
On the other hand, on July 10, the Chief Secretary of Delhi said, “Many buildings in the capital are ill-equipped to handle earthquake... I think we need to bring in structural engineers and they must also verify and sign building plans along with the architect at the time of getting permission from the municipal corporations.”
It is obvious that most of the bureaucrats go by file records, without paying a visit to the site to see the ground reality. According to a Right To Information response, a total of 1,489 illegal constructions were detected in Mumbai from 2008 to 2013. “As many as 23,587 cases of illegal constructions and encroachments were reported by Delhi Police to various civic agencies, which includes the New Delhi Municipal Council and three Municipal Corporations, till November 2013”, said the then Minister of State for Home Affairs on December 17, 2013. In the same statement, he added, “In 2012, Delhi Police had intimated 29,203 cases of illegal constructions and encroachments to respective civic agencies. In 2010 and 2011, a total of 20,152 and 30,035 cases were reported respectively.”
It’s amazing how, instead of cutting down the layers of bureaucrats — a majority of whom do not even move a file without a push of money — most political leaders and even Ministers just sign on the dotted line because a proposal has been initiated by a politician. It’s not that the bureaucrats are unaware of the illegal construction and many more unlawful activities. It’s just that they think that the only solution is to add on more bureaucrats — to doom the country. More paper work means more people who have to be approached for bribes and favours.
India is among the bottom-most of the World Bank’s Doing Business report which measures business regulations in 11 areas across 189 economies, including starting a business, dealing with construction permits, getting electricity, registering property etc. Ranked at 142, India’s score has dropped in eight areas: Starting a business; dealing with construction permits; getting electricity; registering property; getting credit; paying taxes; trading across borders; resolving insolvency. India’s position in ‘enforcing contracts’ has not changed. Only India’s ‘protecting minority investors’ record has shown a significant rise — from the 21st position last year to the seventh position this year.
With the exception of Bangladesh (173 rank), India’s ranking is lower than most of its neighbours, including Sri lanka (99), Nepal (108), the Maldives (116), Bhutan (125) and Pakistan (128). India’s ranking is also the lowest among the Brics grouping — Brazil is at 120, Russia at 62, China at 90, and South Africa at 43.
A survey on fraud and corruption by Ernst & Young, published in the media in May this year showed that around 80 per cent believe that corruption was still widespread, with 52 per cent saying, offering gifts to win businesses is “justifiable to help a business survive”. Another 27 per cent also justified cash payments. Amusingly, 35 per cent of respondents also believed that “conformity to their organisation’s anti-bribery and anti-corruption policies will harm their competitiveness in the market”. Further, 57 per cent said increased regulation “is augmenting challenges for the growth or success of their business.”
It may appear comical that the Government has not commissioned any study or appraisal on corruption in India. All the laws that exist are for post-corruption activities. Even for prosecuting a senior officer of the level of the Joint Secretary and above, the permission of the Union Government is required. India is perhaps the only country where, even for catching the corrupt, one needs Government sanction. For media and non-Government organisations, one does not even know the gravity of the problem. It is not the dishonest or the crooked who is in the dock, but the agency taking action against such targets. The Government has set up the Central Vigilance Commission to advise whether there is a weak or a strong case, against the ‘robber’ or ‘burglar’ — or whatever else you may choose to call the corrupt.
It is often said that the bureaucracy does not take decisions, lest it be accused of corruption. Politicians swallow such pretexts and let the deceitful carry on. No annual report, of either any State Government or the Union Government, reveals the number of corrupt or dishonest public servants who have been removed or dismissed from service. There is no law or Government order laying down that, for corruption or possession of disproportionate assets, punishment will be dismissal from service and prosecution. The latest amendment to the Prevention of Corruption Act, 1988, effectively ensures that no bureaucrat, including those not in service, is ever convicted. The powers-that-be have been taken for a ride again.
The Government should ask itself: Why are Indians investing billions of dollars abroad but not in their home countryIJ The answer is simple: The costs of starting a new business in India are prohibitive. Voltaire rightly said, “God save me from my friends. I can protect myself from my enemies”. Replace ‘friends’ with ‘politicians’, and one will see how Voltaire is still right.