By Bitan Bhadra
Since the times of Nehru, India has been plagued by socialist policies and regulations. During the period 1950-1980, Indian leaders pursued a Soviet-style economy, the state occupying heights of the economy. The Indian economy grew 3.5% a year which came to be termed as the Hindu rate of growth. Then in 1991 India faced a huge liquidity crisis which forced reformations and looking at the economy differently.
The reforms of 1991 brought India a golden summer. The Indian economy was opened up and shackles were let go. Businesses, entrepreneurs and foreign investors were welcomed. The stringent inward-looking psyche was thrown away and we looked outward. Indians can now operate in India with ease. We soon embraced multinational companies and foreign investors would recognize our vast market, huge consumerism and potential. Hindu growth rate was pushed back and we leaped into a new era. Growth rates rose, and within two decades we are among the contenders to the worlds greatest economic giants. The world projects us a game changer, superpower. Most corporate giants are housed in our nation. New entrepreneurs are budding by the day and things are in tune to the desire and interest of the nation.
Then one fine morning a World Bank release ranked India a lowly 134 in the ease of doing business index, but said that India implemented the most number of business regulatory reforms in 2012-13. Even Sri Lanka fared well than India bagging 85th position, best in south Asia. That is when one wonders of the contradictions. But this too is explainable! India truly continues to be a bad place for a start-up. We truly had started the reforms and opened up. But somewhere we became too confident. We didnt finish what we started. We sort of messed up the end-game. Our business regulation systems and policies today continue to be a relic of the socialist era. When an ambitious entrepreneur for example today tries to open a start-up of his own, he has to go through the rigorous processes of licensing and permits. Needless to say that many licenses needed to be purchased are often not related even to the business he is embarking in. Then there are government departments and bureaucrats. Most nations ranked on top of the World Bank release have one very common feature. Their permits are a one-stop shop. Unlike which in India, businessmen need to move through the network of government building to building, official to official. This not only lengthens the procedure, but also consumes time. This enormous system of system of red tape is again what gives rise to corruption. Bureaucrats at different levels can willingly slow down or speed up the process bargaining money for their services. This carries on at all levels and corruption is echoed throughout. Time and tide waits for none. So is the case with business and trade. Big scale investors and businesses-men will not let petty systems bring them down. MNCs and Indian corporate giants eye this huge Indian consumer driven market and push money into politicians and bureaucrats pockets and get going. But the brunt is bore by new comers into the arena, low end businesses. These low end businesses are what actually run the corporate giants and fuel the economy of a nation. Beneath a few corporate-giants, driving them are millions of small and low end businesses. Until our policy makers dont realize how to protect them, India can rise but never be strong enough as it desires. Cutting down network of red tape will make things simpler. Permits need to be granted easily, and investors should not have to sacrifice money to corruption. This veil of uncertainty when an investor walks into a government building should be done away with. Only then will our reforms be complete and the wheel of prosperity be set in motion. India has achieved a lot but that should not make us confident or proud, we still have a long way to go.
Bitan Bhadra is a mechanical engineering student from KIIT University. His areas of interest include politics, international affairs, social systems and economics. He is optimistic of India and its future. He has previously written in many platforms on various issues. He is also an avid traveler, trekker and chess player.