Government of India has been continuously trying to change the investment and manufacturing landscape in India for domestic as well as international investors. ‘Make In India’, “Ease of Doing Business in India”, ‘Startup India’ have become the buzzwords these days.
Well, the government is not short of intent. The government actually wants (and needs) to welcome foreign as well as private Indian investment, create a cohesive and investor-friendly atmosphere, encourage small and mid -sized entrepreneurs, develop and protect world class technology and so on.
However, success of these endeavours depends on a lot of factors in and out of government control. I am listing some of those :
A predictable and stable tax regime. Tax terrorism in India has cost India billions of dollars worth foreign investment and resultant loss of employment opportunities. Am not sure if a tax system can ever be ‘friendly’ – however, it should not be unpredictable, unstable and hostile.
Reduction in compliances. There are too many compliances even for small and mid-sized units, which either discourages entrepreneurs or forces them to bribe corrupt officials to be out of the organized sector. Compliances should be commensurate with the size of the venture. “Minimum governance, maximum ease of business’ should be the mantra here.
Get rid of red tape. The typical mindset of Indian authorities is obstructionist, not facilitatory. Delays, refusals, favours and bribes demotivate entrepreneurs.
Corruption free India. Corruption is the biggest stumbling block and a blot on India's reputation. Biggest of MNCs are stuck with cases of having had to bribe in India to seek even routine, just and legitimate approvals. This is just not done for India and Indians.
Remove / Reduce discretion. Putting automatic e-approvals in place (subject to fulfilling standard criteria and submitting requisite documents) is likely to reduce discretion and arbitrariness from the system.
Land acquisition overhauling. This is one of major factors hampering industrial growth. The government should aim for a broader consensus and effect reforms making it easy to acquire land for industrial projects.
Easy Exit system. Currently, it takes no less than 2-3 years to close any industrial unit, even a dormant company. If a project is not working and is not likely to work in the promoter’s estimation, it should be allowed to close. Inflexible labour laws make it a nightmare for any entrepreneur to propose closing down a venture.
Need for Speed. One shouldn’t have to wait till eternity to get any permission, licence, approval or a simple certificate. The Government should fix a timeframe for each and every process and any delay should be a justifiable exception and not the rule. Any officers sitting on the files or applications unnecessarily should be held accountable.
India isn’t short of people or talent or intent to excel. Let’s make India work.
About the author :
Bhumesh Verma is a Corporate Lawyer with over 2 decades of experience in advising domestic and international clients, with a place in "The A-List - India's Top 100 Lawyers" by India Business Law Journal. He keeps writing frequently on FDI, M&A and other corporate matters. He can be reached at firstname.lastname@example.org.