CAN THE PM- INDIA INC MEET IMPROVE INDIA'S RANKING?

By Ruma Dubey

The PM is holding a high-power meet today, literally high power. He wants to know what ails the crashing stock market, what happens due to Chinese meltdown, if US Fed hikes rate and basically all that which ails India Inc.

Virtually the who’s who of Indian corporate world is there – if you have made it in this list, you have made it in life or at least in this Govt's list! The meeting is at the PM’s residence and in attendance are 6 ministers – FM Jaitley, Railway Minister Suresh PRabhu, Nitin Gadkari, Nirmala Sitharaman of Commerce and industry, Dharmesh Pradhan of Petroleum and natural gas and Piyush Goyal of power, coal and renewable energy.

And the head honchos of India Inc who are attending – of course Gautam Adani and Mukesh Ambani for sure! There is also Bharti Mittal, ITC Deveshwar, Sun Pharma’s Dilip Sanghvi, IL&FS Parthasarathy, TVS groups Gopal Srinivasan, Kumar Mangalam Birla, Tata’s Cyrus Mistry and Azim Premji of Wipro.

There is also the RBI Governor Rajan, Niti Aayog vice chairman Arvind Panagariya and chief economic advisor Arvind Subramanian. In bankers, there is obviously, SBI head Ms. Bhattacharya, ICICI Bank's Chanda Kochar, IDFC's Rajiv Lall and Chandra Sekhar Gosh of Bandhan Bank. There are also a few market experts, economists while PSU representation is done by only two – BHEL and GAIL chiefs.

All of them, some of the brightest brains of India are going to think, brain storm and work out how India could make the most and sail through smoothly through this global turmoil. With Parliament sessions being washed out, this is the next best thing PM could probably do though ultimately, everything will come and stand still at the Parliament door.

Yet it is a very good exercise to know what is really happening on the ground, the issues faced and how they can be resolved. Maybe the best and easiest way to resolve issues would be to have a look at two indices – one is World Bank’s “Ease of Doing Business 2015” Index and the other is World Economic Forums (WEF) “The Inclusive Growth and Development Report 2015”.

Coining a catchy slogan like “Make in India” is fine but can one really make it in India? The recent report by WEF is shocking – it has ranked India amongst one of the worst places in the world for small business owners to start businesses. It has considered factors like ease of starting and running a business, attitudes toward entrepreneurial failure, tax policies, number of new business registrations and patent applications. Here, India is ranked lower than countries such as Mongolia, Tunisia and Pakistan.

The WEF report said that when it came to finances and real economy investment, India did well but what really held back the start-ups were the red tapes, administrative burdens, corruption and underdeveloped infrastructure.

The Ease of Doing Business Index 2015 ranks India at 142 out of 189 countries covered. It is down two notches, from 140th rank in 2014. Top of the list, as always is Singapore, followed by New Zealand, Hong Kong, Denmark, Korea, Norway, USA, UK, Finland and Australia.

So what are the points considered to arrive at this ranking? It is mainly reforms making it easier to do business and under this there are 10 categories:

1: Starting a business

2: Dealing with construction permits

3: Getting electricity

4: Registering Property

5: Getting Credit

6: Protecting investors

7: Paying taxes

8: Trading across borders

9: Enforcing contracts

10: Resolving insolvency

Only on Protecting Minority Investors has our ranking gone up, rest all we have slipped badly. The worst is dealing with construction permits – it takes 27 procedures in Mumbai and 162 days; little wonder we rank 184th out of 189! Getting Electricity requires 67 days, Registration of Property takes 47 days. Worse is Enforcing Contracts where our ranking is 186.

One can sit and wonder the need to have this index. But in today’s time where Govt is banking its entire economy on FDI, this index and India’s ranking on this index holds immense significance. This index is like a mirror, showing the Govt its own face, where improvement is needed and where a complete makeover is required.

Such an Index is required to make India introspect. And one more message which comes out loud and clear – rate cuts alone cannot boost growth.

For more details, one can read through the entire report for more insight: http://www.doingbusiness.org/data/exploreeconomies/india/#starting-a-business