Ease of Doing Business in India: Myths Vs Reality

1. Ease of Doing Business in India: Myths vs. Reality India has always been a land of opportunities and initiatives. People of India have also entrepreneurs this since times memorial. Although, the nation remained under the rule of Mughals and then the British for ages but these happened to have contributed in making it a land of prospects. In the earlier days, business was restricted to only a handful of people as most of the production and supply of goods was under the dominion of the ruler’s viz. the Mughals and then the British. However, by the time India became free in 1947, there was a wave of in-house production of goods and provision of services. This wave continued further and magnified itself in the form of big industries and businesses that we call the big-wigs of our private sector. During the colonial period, it was not at all easy to do business as there was total control over production as well as the processes. Later, post-colonial period saw a big change and with it started the era of you can also make in India. Doing business earlier was far more difficult than today as there were end number of factors which desisted the businesses from doing business freely. Furthermore, starting a business enterprise has been a journey and it is still in the phase of evolution. But it is for sure that it was never a myth as India has always been a favourite destination having seas of opportunities. The Past - Bureaucratic Delays – Corruption, Red Tapism, License Raj Old business houses still remember how difficult things back then when there was License Raj in India were. For everything one needed a license and it was, believe it or not, very difficult to get it. From application for a business to finally getting a no objection certificate from a variety of departments, the licenses were really scary and not less than nightmare for any business. Besides the license requirement, doing business in India meant that it had to deal with corruption, red tapism and unnecessary bureaucratic delays. Right from the start of process of application for a business to finally getting a license for it, there were end number of personnel as well as procedures

2. that the businessmen need to follow. Not only this, there was no set accountability, time-frame and in a large number of cases a set procedure for getting the license. The Present - Drastic Change in the Recent Past Things have changed drastically in the past and most of the positive changes have been introduced in the recent past. Procedures have been cut-short, accountability has been set and a definitive time- frame has been set for issuance of license for any business in India. Haven for Foreign Investors – Large FDIs With the opening of channels for foreign direct investment in various new sectors and increasing the FDI cap on the existing ones, foreign companies have been showing keen interest in investing in businesses in India. A lot of joint ventures and FDIs were observed in various sectors resulting in a strong FDI base for India. Economists understand how important are forex reserves for a country and fortunately, India is at a better footing due to inflow of foreign capital. Impetus to Small Business in India In the recent past, there has been special emphasis on small industries in India. For them, the procedures have been curtailed drastically, processes have been eased and a time frame has been set for approval or disapproval. With this, along with economic impetus by the state and central governments, India has been a wonderland for small businesses. A large number of small enterprises catering to never-heard-before goods and services have evolved and have captured a market which was traditionally dominated by large industries and businesses. People too prefer to have the ‘nukkad wali repair shop’ take care of their car rather than some big-wig multinational company charging hefty amount when the car shop does the same thing in much less. Besides, the nukkad shop is easily accessible and can be held accountable easily. The Startup in India Wave With the formation of a conducive environment for start of business and making ease of doing business simpler, there came a wave which is called the start-up wave. Innumerable start-ups in India with less capital but having a unique idea and business proposition popped up in the country and some of them did really well that they became big-wigs overnight. Present Scenario – Corona Scare However, things have changed too drastically in the most recent past. In the light of Corona pandemic, things have slowed down pretty hard and this has hit every sector. The whole world economy has apparently came to a standstill as countries locked down themselves, stopped domestic, foreign travels, put a halt to exports, imports and what not to contain the spread of the deadly coronavirus. The situation has turned so bad that businesses have closed down, those which could survive for the time being have no hope of revival in the recent future and could also shut down ultimately. Thus, things are really in a state of flux and all eyes are on the cure of this disease, which apparently has no seemingly plausible cure other than vaccine. The Atmanirbhar Bharat Abhiyan Initiative In comparison to other nations, which are in a huge crisis due to the pandemic, India has come out with a solution to put a halt to the COVID-19-induced slowdown to nation’s economy. Prime Minister Narendra Modi has introduced the Atmanirbhar Bharat Abhiyan or Self-reliant nation. Under this scheme, large economic investments will be made in making India self-dependent in terms of goods and services. All government tenders to the tune of 200 crore or less will essentially have domestic

3. bidders only. Meanwhile, the government has also announced an additional 20 per cent loan for small businesses which will have government guarantee. Thus, we can see that starting business in India has evolved from easy to easier and the easiest in the recent past. However, the Corona crisis has impacted several business opportunities in the country but economists reportedly suggest that things will certainly improve once there is a vaccine or cure or the disease.