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Government will make it easier to do business: Pilot

business Updated: Jul 14, 2013 23:28 IST
Mahua Venkatesh

It’s one of the ironies of India's business environment — Indians are among the most entrepreneurial people in the world but India is among the most difficult countries to do business in.

In 2012, India was ranked 132nd in the World Bank's Ease of Doing Business Re­port in a list of 183 countries.

“We will focus on improving the ranking. The perception about India must change and we must be able to tell the world that it is easy to do business here,” said Sachin Pilot, corporate affairs minister.

Red tape and archaic procedures hobble Indian entrepreneurs at every step. On most parameters — like starting a business, getting an electricity connection, paying taxes, resolving a commercial dispute, etc. — India ranks a lowly 100th or below.

Consider this: it is easier to do business in Sri Lanka (overall rank 89th), Pakistan (105th), Nepal (107th) and Bangladesh (122nd) than in India.

Now, even as there is talk of the World Bank discontinuing the report, the government of India is taking steps to ensure that India becomes an easier place to do business in.

The specifics are being worked out. The new company's act is expected to cut through some of the red tape and ease procedures, but a lot still remains to be done.

But first, the mindset of those in power needs to change.

“The difficulties are within our control to resolve but we have never addressed them. Governments control rather than facilitate because even now the general attitude is that business and industry should not be very profitable,” said RC Bhargava, chairman, Maruti Suzuki India.

Cultivating a performance-driven culture in government departments, fixing clear ownership among individuals and departments who are empowered to ensure cooperation and aligning incentives with performance are the need of the hour, said a Ficci study on Empowering India.

“Though we cannot come up with a timeline norm, we are looking at how to reduce the time taken to get approvals (for various issues),” Pilot added.

“A favourable, liberalised and transparent business environment will play a major role in improving domestic business confidence and pave the way for restoring investment cycle, revival of industrial growth and put the economy back on higher growth trajectory,” said Chandrajit Banerji, director general, CII.

(With inputs from Sumant Banerji)