Portal to efficiency?

Last Updated: Thu, Jan 23, 2014 04:25 hrs

The launch of the new e-business portal by the Department of Industrial Policy and Promotion (DIPP) must be welcomed. The Centre is scaling up its ambitious e-governance plans, which started with providing online services to individuals. Citizens have clearly benefited from being allowed to file income taxes (a facility open to businesses as well), passport and driving licence applications, etc, online. The move to e-enable interfaces between government and business could help India Inc in similar ways. The DIPP portal, designed in collaboration with Infosys, offers information on forms and procedures, licences, permits, registrations, approvals, clearances, reporting, filing, payments, compliances and so on. It includes an integrated payment gateway, with payments processed via Central Bank of India.

The experience so far has been that these processes are tedious and time-consuming. In fact India is rated among the worst places in the world when it comes to doing business. The World Bank, through its subsidiary, the International Finance Corporation (IFC), carries out an annual survey where it ranks nations on sundry parameters related to the ease of doing business for small and medium enterprises (SMEs). In the 2014 edition, India secured an overall rank of 134 out of 189 nations. It slipped three places down from a 2013 ranking of 131, which was unimpressive anyhow. On several specific parameters, India is close to being the worst place in the world. Some of those variables directly relate to the inefficiency and opacity of the bureaucratic processes every SME must comply with. For example, India is ranked 179 when it comes to starting a business, 182 when it comes to getting construction permits and 159 in ease of paying taxes. These processes involve dealing with bureaucracy at central, state and local municipality or panchayat levels. Part of the problem lies in huge amounts of mandatory paperwork demanded in triplicate by multiple departments. There is also lack of clarity in regulations and a great deal of discretion is granted to the bureaucrats processing paperwork. There is also plain inefficiency.

The e-portal, therefore, makes a beginning. It should improve the quality of information available and speed up processes for budding entrepreneurs. However, it needs to be followed up with more initiatives. First, local governments must be persuaded to adopt similar initiatives to deal with regulations at the state and municipal level. The Centre is trying to persuade states to take these processes online. Second, the amount of paperwork and documentation required needs to be streamlined and the duplication reduced. There have been multiple "single-window" clearance systems adopted earlier. Many have foundered due to government agencies' unwillingness to co-operate and co-ordinate. It is to be hoped that this will not go down the same route. The proof of the pudding will be in the eating. A dramatic improvement in the IFC Ease of Doing Business Ranking will be the one signal to watch.

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