Taped to destiny

Decision making on large construction projects is to be decentralised once again. This week the environment ministry is expected to announce new guidelines. Since 2004, upon an absurd intervention by T.R. Baalu, who then headed the ministry, environmental impact assessment for projects worth Rs 50 crore or more have had to cleared by the Centre. Now, state-level authorities 8212; with one government official assisted by two experts 8212; will be entrusted with the job. This should go some way in reducing the kind of red-tapism and delays that earned India the 134th position in the World Bank8217;s recent ranking of 175 economies on 8220;ease of doing business8221;.

8216;Doing Business 20078217; computes average delays and costs in each country in starting and closing businesses, employing workers, obtaining licences, paying taxes, enforcing contracts, etc. By the ranking, India has slipped down to the 155th spot in terms of ease of dealing with licences. On an average it takes a business through 20 procedures and 270 days. In enforcing commercial contracts, India is placed at 173, taking a business through 56 steps and 1420 days. The conclusion to be drawn from this is not that India8217;s business environment is abysmal. It is not. The country8217;s advantages in terms of its democratic stability, human resources and entrepreneurial spirit give it advantages that place it only second to China in every narrative of economic success.

It is, however, an emphatic reminder of how much comparative disadvantage 8212; all of this bureaucratic procedure being in no way inevitable 8212; this country chooses to impose on itself. It shows in the World Bank chart. Where non-state actors are fewer, India has a relatively healthy business environment. For instance, in the ease with which credit is obtained and investors protected. This clearly illustrates the mantra being sung with alarming regularity these days: the 21st century is India8217;s to lose.