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Business News/ Opinion / Small steps if big ones are hard

Small steps if big ones are hard

India's airports are a good example of the blocks that come in the way of effecting changes needed for growth

Photo: BloombergPremium
Photo: Bloomberg

At the moment, the Indian legislative machinery is severely gridlocked, so big growth-inducing steps such as implementation of the new goods and services tax (GST) regime, or an amended land acquisition law look to have been, at least temporarily, shelved. Whether this is the fault of the government or the opposition, the fact that our legislature shows no sign of functioning despite a single-party majority government is definitely cause for concern. Nevertheless, hope is not lost. In the words of the Chinese philosopher Lao Tzu, “a journey of a thousand miles begins with a single step."

An instructive example about what can be achieved is offered by considering how we receive business visitors to India. Such visitors are often short on sleep, pressed for time running to important meetings, and have done business in many parts of the world. They are an important constituency to have on side, and first impressions, especially at the airport, count for a lot.

Thankfully, these visitors now experience impressive infrastructure at both Mumbai and Delhi’s flashy new international airports, and the journeys from these airports to the central business districts are also far smoother than they once were. However, any amount of impressive physical infrastructure cannot compensate for the extraordinary inefficiency of the procedures and bureaucracy that confront the time-starved business traveller, wasting a minimum of an hour of his or her time, and a maximum of many more hours on any busy day even before business begins.

To begin with, there is the mandatory immigration queue. This is reasonably well-handled, and comparable to most other countries around the world. In an ideal scenario, processing efficiency could be increased even in this step by deploying additional officers every time there is a backlog leading to unusually high queuing. Singapore is an excellent model in this respect, but India isn’t bad at all here.

In most countries, the bureaucratic process ends with immigration. However, in India, the process begins with immigration.

The next step in India is the system of checking the “stamp" in the passport. Note that at the immigration screening stage, the traveller has not once been notified of the need to make note of the specific page on which the immigration officer has stamped the passport for entry, a critical piece of information for what is to follow. The hapless traveller will then encounter a second queue, caused by a narrow bottleneck at which two officers are stationed roughly 20m away from the immigration booths. They brusquely enquire about the position of the stamp in the passport, which in turn occasions frantic rummaging around in the passport, and the inevitable delay to passengers further back in the queue, especially on busy days.

Once the stamp has been verified, the traveller is routed towards baggage collection. Nimble business travellers carrying only hand luggage may begin to feel relieved at this stage, but this would be a mistake. The next step is mandatory hand baggage screening via X-ray, a process that has few equivalents in other parts of the world, which sensibly recognize that hand baggage has been mandatorily screened pre-flight, and passengers have been in a secure area throughout their trip. The effect of mandatory screening of hand baggage near the exit is yet another queue, occasioning an even longer wait than that for the stamp-checking procedure. Needless to say, the officers conducting this screening look even more convinced of the futility of this exercise than the “stamp checkers", though it is a close contest to figure out who is more bored (leaving aside the travellers, who generally suffer in silence).

The business traveller would at this stage normally have every right to be jubilant about their impending exit. Of course, as in most countries, there is a light-touch customs system of channels in which travellers self-select into green and red channels. Customs screening does involve surveillance and quasi-random checking of a subset of travellers, but this is par for the course. The difference in India is the “slip".

The “slip" is the small piece of paper in which the traveller has made their customs declaration, and which was stamped by the immigration officer. The slip is generally placed on the desk of the police officer stationed at the exit, as he sips tea, chats to one of his colleagues, and avoids eye contact with the traveller. Occasionally, though, if the slip is missing, this could occasion further delays to exit—but by this stage, the smart business traveller has adjusted to the pace of doing business in India with its endless bureaucratic delays.

Sure, it is true that some of these procedures exist in other countries, but India’s complex portfolio of procedures is impressive; possibly the world’s most onerous. The overall impression conveyed during the simple act of exiting the airport is that India is stuck in the early part of the 20th century. Change can be effected here (and in many aspects of life and business in India) by thinking hard about what is the bare minimum set of rules, and eliminating the extraneous. In the main, this can be done without recourse to the rough and tumble of legislative politics.

Tarun Ramadorai is professor of financial economics at Saïd Business School, University of Oxford, and a member of the Oxford-Man Institute of Quantitative Finance.

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Published: 20 Sep 2015, 09:56 PM IST
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