‘Strong leadership and feedback loop helped India’s 23-rank jump’3 min read . Updated: 02 Nov 2018, 07:00 AM IST
Ramesh Abhishek, secretary in DIPP, explains how India 'cracked the code' to figure in the tens. The lesson, he says, is to be patient
New Delhi: India’s jump in the ease of doing business ranking in the World Bank survey from 100th position last year to 77th came as a pleasant surprise for many. But, for Ramesh Abhishek, secretary in the department of industrial policy and promotion (DIPP), it was the result of sustained and coordinated action over the last two years. In an interview, Abhishek explained how India “cracked the code" to figure in the tens. The lesson, he says, is to be patient. Edited excerpts::
Whom would you give credit to for this 23-position jump?
The credit goes to the political leadership for having a strong commitment to reforms, and a very hard working, determined group of civil servants from many state and central government departments including municipal corporations. There have been many legislative changes which show the political commitment—goods and services tax (GST), Insolvency and Bankruptcy Code (IBC), amendments to the Companies Act, Arbitration and Conciliation Act and Commercial Court Act which have enabled many of these improvements. We used technology in a big way and innovative concepts like risk managements leading to very few physical inspections, joint inspections, deemed no objection certificate and deemed approval.
The most important is the very strong feedback loop. We do the reforms, communicate with the stakeholders, get feedback from them, again improve our reforms wherever required and again take feedback. Plus, very effective communication with the World Bank. Because sometimes, the communication with the Bank was not as good as it is now. Explaining to them what exactly we are doing and understand from them why it is not enough in some cases and address those gaps. All this combined over a period of time has delivered results. The lesson is that be patient. Results don’t come very easily here. The reforms that we did in 2015, 2016, 2017 are getting reflected now. This is because immediately after reforms, users don’t give the feedback that “everything is working fine now". They genuinely point out loopholes, so we have to fix those problems.
Can you give an example where better communication with the World Bank helped?
Take SPICe (Simplified Proforma for Incorporating Company Electronically). Almost 1,100 applications come everyday. The World Bank asked how are you able to clear it in one day. So we explained to them and showed a video of a centre in Manesar where 75 professionals are working and they are clearing 12-15 cases each everyday. That’s how 1,100 applications are disposed of everyday. That was necessary because you were doing something in two weeks and now you are claiming I am doing it in one day. So we have gone to great lengths to convince them. We showed them how one can “reserve unique name" (RUN) for a new company within four hours, like New Zealand. Somebody paid money through his card online and showed them how within two-and-a-half hours the reserve unique name came. So it has been a massive effort.
How has increased stakeholder consultation helped?
We started stakeholder consultations in November 2016. After the Doing Business report was released in 2016, we came out with a totally different strategy. Earlier, there was no nodal department and it looked as if DIPP has to do everything. DIPP is not doing all reforms, it is sharing reforms, giving them best practices, coordinating, monitoring.
Under our outreach programme, we used to have meetings in Udyog Bhawan with lawyers, chartered accountants, company secretaries, architects, labour professionals. We used to have meetings in Mumbai also. We appointed many agencies who took feedback and gave us, like Indian Institute of Foreign Trade for trading across border, Institute of Chartered Accountants of India for checking out on payment of taxes. The World Bank team also did independent surveys. Feedback was being taken by everybody such as municipal corporations, customs. Based on the feedback, if we found any problem, then the problem was addressed. We used to send thousands of newsletters, emails, newspaper advertisements, social media, WhatsApp groups—so we have used every possible medium for creating awareness about our reforms and take feedback.
What’s the target for next year?
See, nobody can fix target for a year. Because we don’t know how much work will be done, how much of that will be recognized by the stakeholders. Who could have anticipated 30-rank jump last year? We didn’t know about 23-rank jump this year. We are not working for the index. We are working to improve the business environment in this country. Index is only a reflection of that work. If this was our only target, there was no need to do ranking of states on ease of doing business or going to the district level for ease of doing business ranking.