ISSN 2330-717X

Puzzling World Bank EODB Survey Raised Eyebrows On India’s Ranking: Reforms Held Hostage By Old Fashioned Bureaucracy – OpEd

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The World Bank has decided to stop the Ease of Doing Business (EODB) survey after the scandal revealed about  the pressure to boost China by changing the methodology. It nullified the World Bank Ease of Doing Business survey, one of the important surveys for investment destination. Former Union Minister Jairam Ramesh lamented Modi government chasing “ bogus ranking” and consulting firm Mackinsey vented despair of companies still facing mountain obstacles in obtaining permits.       

India made a record jump from 142 to 63 ranks among 190 countries between 2016 to 2020. In the eyes of the Government, India’s revamping in EODB led to a positive impact, such as a rise in foreign investment. Regulations and procedures were reduced or scrapped for speedy approvals.  Inclusive growth hogged the limelight. Global impression improved with a relook to India for a  potential  investment destination amidst COVID 19 pandemic and erosion of GVC (global value chain).  

But, did really the situation improve and meet Modi’s commitment to the Japanese investors, “India will roll out red carpet, not red tape”?. Rise in foreign investment is not due to EODB rank up, but the global situation pertaining to COVID 19 pandemic, which leveraged scope for digital economy.    

Eyebrows were raised over India’s governance and transformation of the reforms in doing business. Angers fuelled up on failure of COVID 19, leading to heap of death due to lackluster logistics for the supply of oxygen concentrators.  Inordinate delay in releasing EPF funds made the claimants hapless and led many to death or near to death’s door. Most of the reforms remained on paper. Manufacturers continued to grumble over the fiscal packages’ actual disbursement without greasing  the palm of babus. A manufacturer requires more than  6,000 compliances to start a manufacturing unit, which requires more than a year. 

Union Commerce and Industry Minister announced the setting up of a National Single Window (NSW) system, which will bring a strong web between Centre and State approvals. He chanted, “This is a freedom from bureaucracy and windows within window”. He said that it will be one-stop digital platform to obtain all requisite Central and State clearances and approvals. Nevertheless, concept of Single Window system is not new. It is the reminiscent of several IT platforms for investing in India.

Significance of Single Window system is not only to curb hassles for investors running from pillars to posts, but also to reduce time period for approvals. But, NSW does not ensure time period within which the approvals will be given. The general viewpoints of the investors are that  time period for approval is crucial to start a manufacturing, given the fact that more than 6,000 compliances are required to be met. 

Further, the irony is both Centre and State windows for approvals are administered and controlled by Central led civil servants. Even a simple thing is subject to various levels of approvals. Any action, even in emergency, is approved only after the files move from one table to another. The dropping of Mittal’s steel plant in Jharkhand is a case in point 

Anguished Prime Minister Narendra Modi vented ire against the IAS officers. He lamented in Lok Sabha, “Babus will do everything. Because they are IAS”. He asked his fellow Parliamentarians, whether it was judicious to handover “reins of the nation to the babus”. In last few years, virtually hundreds of IAS, Indian Revenue Service (IRS) and other Central service officers were compulsorily or prematurely retired.  

A survey by the Centre for the Study of Developing Societies deplored that majority of the respondents observed  it was difficult to get work done at government offices without connections or bribes. Most of them expressed their distrust and  dependence on government offices and preferred going to political parties for getting their work done . 

Realizing bureaucracy a major obstacle  to the reforms and  there were not substantive progress in the performance of bureaucracy even after departmental training,, Government of India launched National Programme for Civil Service Capacity Building  ( NPCSCB), known as Mission Karmayogi in November 2020. The main objective is to shift from “Rule Base “ to “Role Base” HR Management of civil servants. This will increase the scope for  aligning work allocation of civil servants to the competent person. Today, the highest bureaucrats in economic related ministries and departments are seldom positioned irrespective of their educational  backgrounds. An IAS officer can be positioned  as Chief Secretary of an important economic ministry with the background of political science graduation.      

DOPT (Department of Personal and Training) has decided  to design and develop FRAC (Framework of Roles, Activities and Competence) for civil servants under the Mission Karmayogi. The main aim is to  give a new face of bureaucracy, unlike Rule Base functionary to appease Ministers and seniors.  

In summing up, ease of doing business can be truly proliferated if bureaucracy acts as a guardian for investors’ interests. Old ethos of 1986 bureaucracy should be weeded out and bureaucrats should owe to role base performance, instead of rule base, which is easier to pass the buck to others.   

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Subrata Majumder

Subrata Majumder is an adviser to Japan External Trade Organization (JETRO), New Delhi, and the author of “Exporting to Japan,” as well as various articles in Indian media, including Business Line, Echo of India, Indian Press Agency, and foreign media, such as Asia Times online and Eurasia Review .

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