February 22, 2024
‘Promoting business activities by curbing unnecessary hurdles not only attracts essential domestic and foreign investments but also serves as crucial catalysts for economic growth. Investors are inclined towards regions with transparent, predictable, proportional, and business-friendly regulatory frameworks’, said Pradeep S. Mehta, Secretary General, CUTS International.
Mehta was speaking at a groundbreaking webinar titled “Beyond EODB: Enabling Ease of Running a Business by Bridging Trust Deficit.” The webinar aimed to foster a comprehensive dialogue subsequent to the release of a CUTS Discussion Paper on “Bridging Trust Deficit: Enabling Ease of Running a Business in India.”
Kicking off the event, Amol Kulkarni, Director (Research) at CUTS, provided an insightful overview of the discussion paper and its key insights. He shed light on the prevalent trust deficit in the discretionary interactions between government entities and businesses, emphasising the reluctance of officials to streamline processes.
Furthermore, he underscored the crucial role of the government as a regulator in contrast to its role as a counterparty, particularly in government-owned enterprises.
Moderating the discussion, Mehta highlighted the procedural burdens and the lack of accountability and deterrence that adds to the plight of businesses, including citizens. He stressed on the fact that in view of limited resources, SMEs find it more onerous.
During the panel discussion, Danish Hashim, Chief, Ease of Doing Business, CII, advocated for a centralised Grievance Redressal System to ensure accountability and streamline processes.
He agreed that action against corruption is needed and the government is already doing much by leveraging technology.
Angira Singhvi Lodha, Partner at Khaitan & Khaitan, addressed legal concerns, advocating for an Ombudsman system akin to that in the banking sector. She rightly touched upon the unease of litigation in India which can drag on for years. In advanced countries like the UK, there is a compulsory mediation process and a case management process to be followed.
Bhuvana Anand, Co-founder of Prosperiti, stressed the need for a shift in attitudes towards reforms, particularly concerning MSMEs.
While applying MSMEs reforms in states the phrase unfortunately holds that, “Big is bad and the small fly by night”.
This binary is believed true and hence reforms are hard to make. The government’s perception that if reforms are implemented and something goes wrong, it leads to risk aversion responses and hence no progress on this front. She insisted that the government knows all and can address all, only the correct direction is needed.
Rishi Agrawal, Co-founder & CEO of Teamlease Regtech, underscored the disproportionate compliance burden borne by MSMEs and the urgent need for modernising regulations as most of them pertain to the 20th century or pre-colonial times.
Teamlease Research, headed by Agarwal, is very actively pursuing reforms of laws which have disproportionate criminal provisions, other than keeping track of a large number of compliances in various sectors and advocating for simplification.
Leading small industries SME’s chamber head Anil Bhardwaj, Secretary General of FISME, emphasised the necessity of targeted reforms related to starting and conducting businesses. The informal sector comprising of micro enterprises are the worst off due to the nature of their business. They have to pay regular bribes to remain in a spot and in business.
Agreeing with Hashim, he stated that in terms of exiting a business using Insolvency laws, it is easier for large corporates to exit but most SMEs are either partnerships or proprietorships which are not able to use the insolvency laws.
Jacob Crasta, representing Laghu Udyog Bharti, another large small business chamber, emphasised the importance of fair treatment for entrepreneurs and highlighted the interim budget’s highlight on the inclusion of “Udyamis” in India’s growth narrative. He advocated for stringent punishment for guilty officials.
The webinar served as a platform to stimulate discussions on the imperative of implementing the next phase of reforms focused on easing business operations post the Ease of Doing Business reforms.
For further details, contact to:
Amol Kulkarni, Director (Research),amk@cuts.org,
Mehak Sharma, Senior Research Associate, mes@cuts.org