Doing Business In India Now….
Gone are the days when the brightest brains in India had two options only – either to join a coveted job in Civil Services or to go abroad. Brain drain was a serious problem and there was no solution in sight how to tackle the brain drain problem. It was a common topic in debating competitions at school/college level.
Today, the scenario is different, thanks to the reforms initiated by the P V Narasimha Rao government in 1991, the World Bank initiative on ‘Ease of Doing Business’ and the reforms undertaken by the present government under the leadership of Mr. Narendra Modi.
In 1991, India faced severe economic crisis. By the end of 1990, precipitated by the Gulf War, the situation became so serious that the Indian foreign exchange reserves could barely finance three weeks’ worth of imports. The global credit-rating agencies downgraded India from investment grade making it impossible to even get short term loans. The government was in no position to give any commitment to reform the economy. The World Bank and IMF also stopped their assistance, leaving the government with no option other than mortgaging the country’s gold reserves, which India did, to avoid defaulting on payments. This crisis led to the liberalization of the Indian economy. This was also one of the conditions stipulated in the World Bank loan requiring India to open herself up to participation from foreign entities in its industries and do structural reforms.
The next milestone was the World Bank initiative ‘Ease of Doing Business’ where 190 economies are ranked from 1-190 on their ease of doing business. A high ease of doing business ranking means the regulatory environment is conducive to the starting and operation of a private enterprise. This initiative started way back in 2003 but the comparative report got published from the year 2006. Initially, there were 11 parameters but the research study related to the 11th parameter has been temporarily put on hold as there was inconsistency between the business competitiveness related labour requirement stipulated in the stated World Bank initiative and the norms of International Labour Organization (ILO). The 10 indices are :
- Starting a Business
- Dealing with Construction Permits
- Getting Electricity
- Registering Property
- Getting Credit
- Protecting Minority Investors
- Paying Taxes
- Trading across Borders
- Enforcing Contracts
- Resolving Insolvency
The 3rd milestone in India’s journey to economic glory was the coming to power of the present government under the able leadership of Mr. Narendra Modi. When he took over in 2014, India’s rank was 142. The present government aimed for a rank within the top 50. This has not been achieved yet, but there has been substantial improvement in the ranking – now it is 77, that is a jump of 65 ranks ! No mean achievement, considering India’s large economy, her billion plus population and many other factors. The Modi government aggressively followed a slew of reforms – some of which temporarily shook the economy like the demonetization move. Some of the measures are :
- Enactment of Goods and Services Tax
- Emphasis on Skilling India – creating a pool of industry ready manpower of 2 lakhs annually, to be increased to 6.5 lakhs in 3 years
- Mudra Loan facility from the banks
- Auto approval of export incentives under MEIS
- Logistics division created in Commerce Department
- 24×7 self-generation of e-IEC (Importer Exporter Code) by exporters
- 24×7 online contact point for exporters under contact@DGFT service
- Online quality complaints & trade disputes redressal
- Export incentives increased for milk products, non-basmati rice, onions etc.
- New Agricultural Export Policy
- TMA – Transport and Marketing Assistance launched for assistance for international freight
- The upper FOB value limit for goods exports through e-commerce enhanced from Rs 25000 to Rs 5,00,000 for getting support benefits
- 12 champion services sectors identified for providing support of about Rs 5000 crore.
- Fostering a clean India under Swachch Bharat Abhiyan
Unicorns in India like Paytm, OYO, Ola Cabs, Byju’s, Swiggy, Zomato, ReNew Power, Paytm Mall, Billdesk, Delhivery, Musigma, Freshworks, Hike, ShopClues, InMobi, Policy Bazaar, Udaan, Pine Lab, Snapdeal, Quikr, UST Global. A unicorn is a privately held startup business venture valued at 1 billion US Dollars or more. Doing business in India is much more easier and very prestigious. Entrepreneurship is being recognized and rewarded. Small or big, urban or rural, everyone is moving ahead to constructively utilize their talent or give commercial shape to their innovative ideas. Women entrepreneurs are being encouraged to soar ahead. The scenario seems very bright. Brain drain may soon become history. And India’s may soon become ‘Sone ki Chidiya’.