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ease of business: What’s behind India’s 1-year 30-step jump in business ease list

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NEW DELHI: India’s fastest single-year jump in the World Bank’s Ease of Doing Business ranking has been a meticulously planned exercise. It began with the World Bank agreeing with the government that the survey (that underlies the ranking) should be conducted in two cities (Mumbai and Delhi) unlike the pre-2016 methodology of ranking reflecting the perception of business in Mumbai alone. But that was only the start.

A bigger battle awaited the department of industrial policy and promotion (DIPP), which has been driving the process of easing business regulation in India. Three years ago, when PM Narendra Modi made a pitch for India to move into the league of Top 50 countries in the World Bank’s ranking in three years, Amitabh Kant, who was then DIPP secretary, got down to work out a checklist. He found that changes were possible within the legal framework on most issues.

His successor Ramesh Abhishek took the process forward, often working with municipal bodies and utilities in Mumbai and Delhi. It took a while for him and Kant to get the Mumbai and Delhi power distributors to move to an online system for applying for connection and collecting payments.

When it did happen, India’s rank on the parameter of ‘Getting Electricity’ shot up from 170 in 2015 to 26 in 2017. Delhi Jal Board was persuaded to lower the fee, something that the World Bank has not acknowledged as yet.

Getting various approvals from local bodies were not easy too, but an online system of deemed approvals if an agency doesn’t respond in the stipulated time has eased the process. The National Monuments Authority was prodded into colour coding of areas where its approval was needed. This made it easier to get clearances that had to come within a specified period.

At the Centre, several departments — from commerce to customs and corporate affairs —were nudged into reworking processes to reduce the number of forms that are required and significantly cut down the time needed for clearance. For instance, an entrepreneur can now select a name and register a firm within a few hours — something that took up to three weeks earlier. Approvals now come with PAN and TAN.

Initially, switching to an online system didn’t always work. “We found that some departments were still insisting on printouts. We discontinued that,” says Abhishek.

In many cases, the online tools did not work due to lack of sufficient bandwidth or inadequate hardware. Most of these issues have been resolved. Wiser from 2016 experience when India’s rank barely moved (131 to 130), and under instructions from PM, ministries were asked to implement changes well ahead of the deadline. If the deadline for the World Bank team’s assessment was December, the process needed to be completed earlier so that companies being surveyed by the Bank had the time to assess the change and build that into their feedback.

A lot of work was done to communicate changes. All reforms undertaken in a department were mentioned clearly in one place and a special drive was undertaken to remove all old information. Workshops were organised to explain the changes to specific industries. Perhaps the biggest and hardest change has been in the mindset.

“Agencies like MCD now have WhatsApp groups to address user concerns. The mindset is changing and that is a very important achievement,” Abhishek said.

Updated: November 1, 2017 — 4:29 am

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