Communicating the reforms instituted
Imagine the typical entrepreneur of a moderately successful firm in the SME (small and medium-sized enterprises) sector in India. She needs to stay informed about innovations in her industry, competitors, and government policies that may affect or benefit her business. When the government launches a new scheme or policy, she hears about it through newspapers, television, and tidbits from conversations with peers. She may also receive news through messaging apps on her smartphone, which has become a very popular means for sharing information. Her knowledge and the timeliness of receiving important news may also depend on where she is located (and therefore what networks she is part of).
On the other side of the story, we have governments—both at the state and Central level—relying on notifications and press releases to communicate their policies to the general public. At the Centre, such information is imparted through the Press Information Bureau (PIB). At the state level, announcements are usually put up on websites of government departments. These may be picked up by industry associations and private entrepreneurs, who pass them on to their members/networks.
Regional news reporters in charge of specific beats scour these websites for the latest notifications and may report the ones they deem important. If there is a substantive announcement, inauguration, or launch, there will be a press conference. As a result, not all government policies materialize into news stories in the mainstream media.
And when they don’t, the message often gets stuck, with firms being oblivious to new changes. This information gap between reforms that state governments institute and firms’ knowledge about them was a key finding in the NITI Aayog-IDFC Institute Enterprise Survey, released on 28 August.
This report examines the ground-level experience of firms to complement government metrics. Since 2014, the government has prioritized bolstering manufacturing. A number of reform efforts have been made to this end: improving ranks in the World Bank’s Ease of Doing Business report is an oft-stated objective, reforms have also spurred under the umbrellas of the “Make In India” and “Digital India” campaigns, and the 98-point action agenda by the Department of Industrial Policy and Promotion, government of India, has encouraged regulatory efficiency by fostering competition among states (via a state ranking of reform implementation based on a set checklist).
Two years later, we see a definite improvement in the business environment. However, the Enterprise Survey finds wide communication gaps; knowledge is low for experts and enterprises in various ‘doing business’ categories.
The use of the single-window system is the most prominent example. Here, 75% of state governments claim to have instituted the process, but across India, only 20% of new firms and 41% of experts had respectively used/were aware of the system. While this is the all India average for new firms, the numbers vary across states. Andhra Pradesh had the highest use of single-window system (41% of new firms and 100% of experts), followed by Rajasthan (33% of new firms and 83% of experts). Surprisingly, for large and developed states like Maharashtra and Tamil Nadu, the uptake of single-window systems among new firms was very low at 9% and 2%, respectively.
Another example has to do with online maps being available on a state government website, providing details about available infrastructure like road, water and electricity. Across 28 states surveyed, 15 have set up online maps, but in only two states did over 50% of firms claim to have found/used them. Overall, only 6% of firms said they had found them. The lowest in the range was Jharkhand, where no firms or experts knew about online maps, and the highest was Haryana, with 69% of all firms, and 89% of experts, knowing about them.
A third example is when firms were asked whether synchronized or joint inspection under all applicable labour acts was conducted. Of the 18 states that have instituted the process, in 14 of them, less than 50% of the firms surveyed stated that joint inspections were conducted. The state at the lowest end of the scale was Punjab (18% of all firms) whereas Kerala was at the upper end (72% of all firms).
These examples are similar to responses to other questions asked in the report, across doing business areas. In most instances, even if state governments have instituted a process, less than 50% of firms surveyed know about/use it.
It is evident that reforms themselves will not be meaningful unless concerted efforts at communication are also made. A few entrepreneurs we spoke to said that their primary sources of information were newspapers (print and online), social media, and television. Thus efforts must be made by states to ramp up outreach, ensuring that new policies are advertised through these mediums (including radio). This will take information to existing as well as potential entrepreneurs and investors, making them more likely to hear about it.
Additionally, state governments could set up an entity like the PIB at the state-level, where information about new reforms is published. Since much of the Indian population is now connected online, more direct mechanisms of reaching people through their smartphones (such as apps or messaging services) could be explored.
After the more challenging task of actually instituting processes, these should be relatively easier to do and are low hanging fruit. The aim here is to help all firms, irrespective of size or location, to take advantage of a better business environment.
Vaidehi Tandel and Kadambari Shah are, respectively, junior fellow and senior analyst at IDFC Institute, a Mumbai-based think/do tank.
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