Can you tell us something about the Make in India campaign?
It is not a campaign, it is an initiative of the government. The intention is to make India a manufacturing destination. Manufacturing will be able to create jobs. India’s key challenge is that it must grow at a rapid rate of 9-10% over a three-decade period. For that to happen, it’s necessary that manufacturing must become a key driver of growth. Therefore, the government has identified 25 sectors on which we are focusing. We have brought in a number of structural reforms. We opened up India’s economy. We made India an easier and better place to do business in. We have opened up FDI (foreign direct investment) in a very rigorous manner and we have seen the results. That’s why when there is a slowdown across the world, India continues its growth, growing at around 7.4% per annum. This is largely a consequence of the many reforms that have been carried out. Structural reforms are underway and you will see the results in the next two to three years down the line. These reforms will put India on a high trajectory growth rate for a long time.
You spoke about structural reforms. There is a lot of controversy around the fact that in India there are a lot of rules and regulations that are like a spoke in the wheel for both multinationals as well as domestic entrepreneurs. How do you plan to tackle these?
Well, India is a very complex, complicated and difficult place to do business in. Over the last 68 years, we made India a very difficult place to do business in. As the Prime Minister said, the challenge is to make India one of the easiest and simplest places to do business in. We need to scrap a lot of rules, regulations, procedures, paper work, not only at the centre, but also in the states. So ease of doing business has been the key objective of this government. India has improved its position in the ease of doing business. Structural reforms like bankruptcy code and national company law tribunal have been put in place, or are in the process of being put in place. All these will enable easier exit, they will enable easier arbitration, they will enable easier settlement of commercial disputes.
Therefore, while the central government has taken a lot of action, it is very important that states, where the action is, make it easy to do business.
Last year we held a competition of around 100 points. All states competed. This is for the first time in India that states were ranked. There was huge interest and enthusiasm. This year, we are making the states compete for around 340 points and 340 reforms that they have to carry out.
All states are working extremely hard on that and I hope to see a lot of improvement in the performance of all states. They are vying with each other to come out on top. The cut-off date for this is in May and we will evaluate in June-July and in August we will come out with the findings.
Do you think because of these initiatives, there will be more collaboration between states and the centre?
The role of the state is extremely important. The central government can only create benchmarks. It must act as a catalyst. It must work in the spirit of cooperative federalism and ensure that states also improve. We will see the results this year. There is a huge amount of competition in the field and we will see the results coming in. Last year itself, I was very surprised that the mineral-rich states of Jharkhand and Chhattisgarh had actually done extremely well. They have done a lot of improvement around land, around labour and they benefited from it.
As a bureaucrat, what are the challenges you personally face in tackling some of these issues?
Over the years the government has been working in silos. Each department works as an individual department, whereas in government, when decision-making is to be done, you need to look at it in an integrated manner across departments. Therefore, convergence and integration is very important. This is happening for the first time. This is for the first time that we are realizing that India is over-legislated and we need to remove paperwork and procedures.
The process of dismantling the government in areas where it is not required is happening for the first time. It’s a challenge to convince the bureaucracy. The change at the top level has happened. The Prime Minister has personally interacted with bureaucrats on several occasions. So the change in the top level has happened. But the challenge is to spread that change down the line till the lowest level.
It is also about a change in mindset more than just rules and regulations. How does that happen?
I think in India, change happens at the top. The top man is clear and he has convinced the bureaucracy, and I think the top layer of bureaucracy is convinced now. Because the Prime Minister himself is convinced about the nature of change. The Prime Minister is personally driving some of these things. He is driving the ease of doing business, Start-up India, Make in India. So the change is happening very fast. Probably, you will see the bureaucracy as the big agent of change in the coming months.
The other thing I want to talk about is Start-up India. Tell us how it is evolving?
The Start-up India initiative has demonstrated that there is a huge interest, huge enthusiasm and all Indians want to become job creators rather than job seekers.
They are looking to change India and we need to provide greater and greater impetus for that. So the key thing there is to make compliances very easy. The key thing is that there should be easier exit because in start-ups failures are necessary, they are a must. You must fail to succeed and therefore, exit must be made very easy. Thirdly, we must allow lot of incubators to grow in India. These are some of the issues that we were confronted with. The Prime Minister had announced an action plan, which actually envisages all these things—easy compliance, easy exit, incubation, funds, providing impetus through tax measures—all these are being envisaged in a very integrated and cohesive manner for the start-up action plan. Starting from 1 April, they should give a huge impetus to the start-up movement in India.