The BJP led NDA government recently proposed the creation of an online system that would help clear business hurdles and projects in a timely manner. The government plans to launch this service by April in 2015.
Many have welcomed this decision, indicating that a transparent and problem free regulatory environment would help promote growth and investment. However, in the midst of all this, the government should not forget that it is not only paperwork that tends to delay things.
There is no denying the fact that businesses suffer greatly due to corrupt politics, especially in a country like India where nearly everything is driven by politics. Political interference is considered as the main reason for India’s poor performance and low rank in international rankings when it comes to gauging the ease of doing business in the country.
The sad truth is that Indian democracy is directly funded by corruption and its proceeds. The many hurdles one needs to face in order to set and run a business in the country allow rents to be collected after their removal. These rents find their way into the pockets of politicians while civil servants act as their supplementary beneficiaries. The ease of doing business in India would improve only if this political funding system bites the dust. This can be achieved only via institutionalized political funding.
According to this method, politicians and their parties need to be funded only via open and transparent means. The funding should be fully audited and accounted for. This is the only effective way to stop the industry from releasing funds to pool corruption. This in turn, would attract more investors to India. It can be noted here that some of the biggest industrial houses in India make no contributions to politics (at least on paper).
The proposal of starting a national portal for business clearances will hopefully allow entrepreneurs apply for as well as track the status of all the licenses and permits online. Further developments would also entrepreneurs to access this information on their mobile phones.
While all this would be considered possible by April next year, it is also considered essential for the government to reduce the number of approvals for business projects. The current numbers stand at 81 and 133 at the state and Central levels respectively. Outdated and complex state regulations in relation to environment, land acquisition and mining rights are making it difficult for business projects to launch effectively.
In addition to this, issues like outdated insolvency and improper enforcement of contracts, etc. need to be fixed if India hopes to improve its score for business easement in international rankings.
Summary
The Indian government has proposed to launch a nationwide online portal to help business projects gain clearances in a timelier manner. However, this move can be beneficial for entrepreneurs only if the government were to take care of the other hurdles that hinder the ease of doing business in India.
