Recently, the Modi Government launched the ambitious ‘Make
in India program’, where investors from the world over were requested to
include India in their manufacturing plans and to invest extensively here. The
aim is to convert India into a manufacturing hub for the world, very similar to
China, as we offered the largest bunch of young, trained and motivated
workforce's in the world. Intricately planned and amazingly thought through, details
of Sectors that are desirable, the ‘Smart Cities’ that are being developed into
such hubs and also the ‘Industrial Corridors’ that would work in unison have
all been identified, but has any focus been put on one aspect – The Ease of
doing business in India?
It is quite embarrassing that as a nation, we seem to unfailingly
go after all our big FDI investors with a hunting crop! Tax notices have been
served in the past on Vodafone, Nokia and BMW. Is this perhaps because our
rules are so opaque, and our bureaucrats love to keep things shrouded in mystery
and adhocism so that, suddenly, one fine day, they have the opportunity to use
their Discretionary Powers to suddenly re-interpret the rules? Why is it not
possible to publish a clear document recording all the Rules, Legal and Financial
compliance's at the time of granting of the License? Will it not avoid this silly
season of litigation and arbitration with Governments pulling in their ‘Sovereign’
punches – as Finland was forced to do some months ago?
Now, sadly, Nokia has announced that it will shut its
Chennai facility on the 1st of November, as it couldn't be
transferred to the purchaser, Microsoft on account of pending Tax Claims by both
the State and Central Governments. This move has put some 6,600 people out of
work (directly) and adversely affected some 10,000 others indirectly. What will
happen to Vodafone and BMW, next? With this kind of business climate and
officialdom, the Make in India campaign is doomed to failure, unless the
License-Permit Raj run by the bureaucracy is eliminated.
Just a couple of days after
posting this article, I learn with dismay that the World Bank has demoted India
a further 8 places to be 142 out of 189 (please see Economic Times link), for the period June 2013 to May 2014,
which is the last year of the UPA Government. Thus, it is amply clear that all
efforts of the UPA Government, if anything, did nothing to improve the business
climate in India, leaving this unenviable task to the NDA Government that is
now in power. The World Bank was thankfully quite candid in mentioning that
this dismal performance cannot be a reflection on the performance of the new
political dispensation which had been in power for a few days at the time of
this evaluation.
I do hope that this will be a wakeup
call to the NDA Government and they will configure all their policies in such a
manner that India reaches to within the top 25 countries in year one, and
higher as the years go by. For any foreign investor, who has 141 options better
placed than India, it is not conceivable that he will overlook all 141
options and pick India to invest in. We have got to change the way we do
business.
Update as on 24th November 2014.
Since I wrote this article, I am thrilled to note that the Government of India in a surprising exhibition of alacrity, adopted the World Bank Report Ease of doing Business as a guidance tool, and has promised that they will configure the policies in such a manner as to be in full consonance with the requirements of Ease of doing Business and has even promised that they will try their best to ensure that India figures within the top 50 in a years' time.
Needless to say, this a sea change for an Indian Government and the openness, the speed of response and the appropriateness of the response is most heartening.
The Make in India team have also since become quite active on Facebook and Twitter (@makeinindia) and have been collaring many followers, who, one would imagine, would encourage, motivate and guide the policy with their comments, including me.
More recently, a report titled Country Brands Index came out, something that I was personally not aware of, wherein they analyse a country's strengths in various criteria - economic, environmental and social and rate a country on how it is perceived by the rest of the world. Hence, a country that is high in the perception index, enjoys a high degree of reliability perception and hence people would be less hesitant to buy a product manufactured there. Thus, countries themselves become brands!
I was amazed that just when India embarks on a Make in India program, a report, upon aligning with which, would ensure the success of the Make in India program, came to my notice, and I have introduced the same to the Make in India team. I do hope they will recognize the benefits and work toward a high CBI rating in 2015 and make us all proud.
If India rates within 25 on the #EaseofdoingBusiness and within Top 20 on the #CBI2015, there will be nothing that can stop the flow of investment to us.
Update as on 24th November 2014.
Since I wrote this article, I am thrilled to note that the Government of India in a surprising exhibition of alacrity, adopted the World Bank Report Ease of doing Business as a guidance tool, and has promised that they will configure the policies in such a manner as to be in full consonance with the requirements of Ease of doing Business and has even promised that they will try their best to ensure that India figures within the top 50 in a years' time.
Needless to say, this a sea change for an Indian Government and the openness, the speed of response and the appropriateness of the response is most heartening.
The Make in India team have also since become quite active on Facebook and Twitter (@makeinindia) and have been collaring many followers, who, one would imagine, would encourage, motivate and guide the policy with their comments, including me.
More recently, a report titled Country Brands Index came out, something that I was personally not aware of, wherein they analyse a country's strengths in various criteria - economic, environmental and social and rate a country on how it is perceived by the rest of the world. Hence, a country that is high in the perception index, enjoys a high degree of reliability perception and hence people would be less hesitant to buy a product manufactured there. Thus, countries themselves become brands!
I was amazed that just when India embarks on a Make in India program, a report, upon aligning with which, would ensure the success of the Make in India program, came to my notice, and I have introduced the same to the Make in India team. I do hope they will recognize the benefits and work toward a high CBI rating in 2015 and make us all proud.
If India rates within 25 on the #EaseofdoingBusiness and within Top 20 on the #CBI2015, there will be nothing that can stop the flow of investment to us.
