Concerned over the country's low ranking in ease of doing business, Corporate Affairs Minister Sachin Pilot Sunday said urgent steps are needed to make India a "safer, better and quicker" place to invest, but states need to be taken on board to achieve the goal.
New Delhi: Concerned over the country's low ranking in ease of doing business, Corporate Affairs Minister Sachin Pilot Sunday said urgent steps are needed to make India a "safer, better and quicker" place to invest, but states need to be taken on board to achieve the goal.
Advocating a clear and long-term policy framework, Pilot said that regulations should act as enablers for investments and not appear as draconian or impediment for investors.
"What is my primary concern is that India's ranking in the doing business index is so low, it does not befit a country of the size and scale it has," Pilot said in an interview.
"We have set up a committee under former Sebi chairman M Damodaran and the panel is going to submit its recommendations soon in this regard.
"But internally, we have already started discussions at the Ministry to work towards making India a better, safer and quicker place to invest in," said the 35-year old Minister, who took charge of the Ministry of Corporate Affairs about six weeks back in late October.
In the World Bank's 'Ease of Doing Business' index, India is ranked at 132nd place, among a total of 185 countries. The ranking remains the same from the previous year.
India's ranking is even worse at 184th place in terms of "enforcing contracts" and at 182nd position for "dealing with construction permits".
"There is no reason for India's ranking to be so low despite lot of manpower, cheap labour, raw material and stable political environment, our rankings are so low," he said.
Admitting that there are some inherent problems in our system, Pilot said, "We must really make it not only easy to say but also easy to do business".
For this, "we must take state governments on board. There is no way in a federal structure that you can decide for the state government.
"Also, we need to go to village and panchayat levels, as these are the places where factories or plants come up and they have to be taken on board," the Minister said.
According to Pilot, ensuring compliance with regulations is a must to safeguard the interests of common people as well as small investors and adequate powers need to be given to enforcement and regulator agencies such as Serious Fraud Investigation Office (SFIO) and Competition Commission of India (CCI).
"Whether its the SFIO or CCI, we must give more powers to them but they must also not seem to be draconian or impediment for people coming to invest.
"... We are creating these entities to give strength, stability and confidence to people who want to invest. If you create fear psychosis among investors, big or small, then we are doing disservice to the community," the Minister said.
Pilot noted that SFIO and CCI must play the role of a comfort giver and not as entities that are going to spook the investors.
The Minister also called for a "sequential trigger" to fast track the approval process from various departments, including those related to finance and environment.
"What corporates want and what corporates are looking for is clarity of policy. In the policy making landscape, you can have ten, twenty things you want but there should be clarity of law. You must not pick and choose, back and forth, flip-flop... You can have high taxation that is okay but there should be clear cut policy," the Minister said.
He also emphasised on the need to strengthen the manufacturing sector to meet the job creation requirements, of 12-15 million a year.
While India has proved its mettle in the services sector such as IT, Pilot said that manufacturing also requires the attention as "everyone can be an engineer".
"We got to have people on the shop floor, manufacturing, technicians... Manufacturing absorbs lot more labour than services.
"So, that's why, the easier it is for companies to set up businesses, easier it would be for job creation. That is a big item in our agenda at the Ministry of Corporate Affairs," he said.
Pilot said that the current global economic scenario is perfect for making India a much better place to work, as globally there is a recession continuing and Asia, with India and China with its two large countries, is perhaps the only shining point from investments point of view.