Reforms held hostage by the old-fashioned bureaucracy – OpEd – Eurasia Review
The World Bank decided to stop the Ease of Doing Business (EODB) investigation after the scandal exposed pressure to boost China by changing methodology. This canceled the World Bank’s Ease of Doing Business survey, one of the major investment destination surveys. Former Union Minister Jairam Ramesh lamented that the Modi government is pursuing a “bogus ranking” and the Mackinsey consultancy has expressed the desperation of companies still facing mountain obstacles to obtain permits.
India jumped a record 142 to 63 ranks among 190 countries between 2016 and 2020. In the eyes of the government, India’s overhaul in the EODB has had a positive impact, such as increased foreign investment. Regulations and procedures have been reduced or removed for speedy approvals. Inclusive growth took center stage. The global impression has improved with a makeover of India for a potential investment destination amid the COVID 19 pandemic and the erosion of GVCs (global value chain).
But, has the situation really improved and has it lived up to Modi’s pledge to Japanese investors, “India will roll out the red carpet, not the paperwork”? The increase in foreign investment is not due to the EODB ranking, but to the global situation relating to the COVID 19 pandemic, which has taken advantage of the opportunities for the digital economy.
Eyebrows have been raised on the governance of India and the transformation of reforms in the conduct of business. Angers relied on the failure of COVID 19, resulting in a slew of deaths due to poor logistics for the supply of oxygen concentrators. Excessive delay in releasing EPF funds has made applicants miserable and has led many to death or to the brink of death. Most of the reforms have remained on paper. Manufacturers continued to complain about the actual disbursement of tax packages without greasing the palms of babus. A manufacturer needs more than 6,000 compliances to start a manufacturing unit, which takes more than a year.
The Union Minister of Trade and Industry announced the establishment of a National Single Window (NSW) system, which will create a strong network between Central and State approvals. He chanted: “It’s a liberation from bureaucracy and windows in the window.” He said it will be a one-stop digital platform to get all the required central and national permissions and approvals. However, the concept of a one-stop-shop system is not new. It makes you think of several IT platforms to invest in India.
The importance of the one-stop-shop system is not only to reduce the hassle for investors going from pillars to posts, but also to reduce the approval time. But, NSW does not guarantee the time frame within which approvals will be given. The general view of investors is that approval time is crucial to start manufacturing, as over 6,000 compliances must be met.
Furthermore, the irony is that the Center and State counters for approvals are administered and controlled by officials headed by the Center. Even a simple thing is subject to different levels of approval. Any action, even in an emergency, is not approved until the files have been passed from one table to another. The abandonment of the Mittal steel plant in Jharkhand is one example
Anguished Prime Minister Narendra Modi expressed his anger at IAS officers. He lamented to Lok Sabha: “Babus will do anything. Because they are IAS ”. He asked his parliamentary colleagues if it was wise to hand over “the reins of the nation to the babus”. In recent years, nearly hundreds of IAS, Indian Revenue Service (IRS) and other central service officers have retired either automatically or prematurely.
A survey by the Center for the Study of Developing Societies lamented that the majority of those polled observed that it was difficult to work in government offices without connections or bribes. Most of them expressed their mistrust and dependence on government services and preferred to go to political parties to do their job.
Realizing that the bureaucracy was a major obstacle to reforms and that there had been no substantial progress in the performance of the bureaucracy even after the ministerial training, the Indian government launched the National Civil Service Capacity Building Program. public (NPCSCB), known as Mission Karmayogi in November 2020. The main objective is to move from the “Rule Base” to the “Role Base” of the management of civil servants’ human resources. This will increase the possibility of aligning the division of work of civil servants with the competent person. Today, the highest officials of ministries and departments linked to the economy are rarely positioned independently of their training. An IAS officer can be placed as the chief secretary of a major economic ministry with a background in political science.
The DOPT (Personnel and Training Department) decided to design and develop the FRAC (Roles, Activities and Skills Framework) for the civil servants reporting to the Karmayogi Mission. The main objective is to give a new face to the bureaucracy, unlike Rule Base officials to appease ministers and senior citizens.
In summary, the ease of doing business can be truly proliferated if the bureaucracy acts as the guardian of investor interests. The old bureaucratic philosophy of 1986 should be done away with and bureaucrats should rely on the performance of the role base, rather than the rule base, which is easier to pass the buck to others.