The World Bank has upped India's ranking in the Ease of Doing Business by twelve positions. Last month, the World Economic Forum had similarly upgraded India. Even though the push up numerically is modest, it marks the reversal of an adverse trend. Considering the number of steps taken in the last seventeen months, India's position should have moved significantly higher. I understand that all steps have not been factored in since the World Bank criteria has a cut-off date and it also waits for announcements to translate into action before they can be factored. Quicker decision making, faster policy changes, eliminating corruption at the top and smoother clearances have played a significant role. The FIPB clearances and the environmental approvals are being routinely granted. Investors no longer queue up before the Mantralayas in Delhi lobbying for policy changes or approvals.
An equally encouraging factor is that the States have also altered their work culture. Investment is the starting point of all economic activity. An investment-friendly State will be a natural destination. This realization has dawned upon the States. Competitive federalism can be seen. The Gujarat model of Global Investors' Meet has been replicated in Tamil Nadu, Madhya Pradesh, West Bengal and in Punjab. Rajasthan, this month, would be wooing global investors. Telangana and Andhra Pradesh have been reaching out to investors globally. Three States with a significant tribal population--Chhattisgarh, Jharkhand and Odisha, figure in the top six States in the World Bank Ease of Doing Business rankings. The work culture is changing in most States.
Last week, the Central Government issued two important ordinances. The Arbitration Law has been changed to make arbitrations cheaper, faster and free from judicial intervention. To adjudicate quickly upon investment related matters, a commercial division is being constituted in all High Courts. This would improve the enforceability of contracts where India's ranking is relatively poor. The obsolete Specific Relief Act, which provides for damages as the normal remedy rather than enforcement, needs to be re-looked. Having opened most sectors for foreign direct investment, time has come to examine whether some of the conditionalities on which FDI investment is permitted, have become anachronic.
We need to cut down on the number of permissions required so that the time lag between the decision to invest and the actual investment can be shortened significantly. States must realise that local laws which enable availability of land, environmental permissions and sanction of building plans need a relook. Once an industrial zone or new township has been cleared for environmental sanctions, should individual structures require a separate environmental approval? Many countries have switched to an architect's certificate as a substitute for building plans being sanctioned. When you compulsorily need a completion certificate for a building, the permission required for start of construction should be replaced by a regulatory mechanism. These additional changes will further improve India's ranking for ease of doing business.
The ease of opening business must also be accompanied by an ease in exiting. For this, the framework of the Bankruptcy Law is being readied. Dispute resolutions with regard to public projects requires a quicker settlement mechanism. The same is being worked out.
Much has been done to ensure that award of natural resources and public contracts are completely transparent. To empower public servants to take simpler and bolder decision, many corrections are required in some obsolete provisions of Prevention of Corruption Act. The same have already been introduced in Parliament. At a time when the world growth is moving slowly, India aspires to grow faster. To add a percentage or two in our present growth rate, the ease of doing business coupled with a simpler direct and indirect taxation system, a higher investment in infrastructure and irrigation will play a significant role. A low oil and commodity regime is helping us in this direction.
While the Government led by Prime Minister Shri Narendra Modi is trying to accelerate India's growth, there are many who have never intellectually accepted the idea of the BJP being in power. This obviously includes the Congress, many left thinkers and activists. Over decades they have practiced ideological intolerance towards the BJP. Since 2002, the Prime Minister himself has been the worst victim of ideological intolerance. Their strategy is two-fold. Firstly, obstruct Parliament and do not permit reforms which will bring credit to Modi Government. Secondly, create, by structured and organized propaganda, an environment that there is a social strife in India. They wish to project India as an intolerant society. The truth is otherwise. Perpetrators of this propaganda never allowed alternative viewpoints to grow in either universities, academic institutions or cultural bodies that they have controlled. Their intolerance extends to not accepting an alternative ideological pole. Dadri was a stray incident. It was both unfortunate and condemnable. The guilty will be taken to task. Notwithstanding such aberrations, India remains a highly tolerant and liberal society. Our cultural values have imbibed co-existence. India has repeatedly rejected intolerance. It does not respond to provocations. It is, therefore, incumbent upon every well-wisher of India and the present Government to make sure that no action or statement of his provides a tool in the hands of those who want to obstruct India's growth story. The obstructers have a simple plan--if they can't fight politically, they fight with hostile propaganda.
This article appeared as a post on Arun Jaitley's Facebook page.