I read with interest the thought provoking article by Manish Sabharwal (‘Ludo vs Snakes & Ladders’ IE, November 29) on the ease of doing business. I agree that the progress in ease of doing business has been remarkable with India climbing several places in the rankings to reach the 77th position. I am also in total agreement that reforms are required to make this improvement sustainable. However, it is on the aspect of civil service reform that I have a different take to offer. The article focuses entirely on reform at the level of higher civil service, namely the IAS. It talks of lateral entry, pyramid type structure, retirement if not promoted and so on. As a senior civil servant actively involved in implementing ease of doing business, I can vouch for the fact that the senior civil service is committed to these reforms, and has been taking the lead.
It is true that the focus on ease of doing business and the huge subsequent improvement is because of the vision and inspiration of our prime minister. But it is equally true that the higher bureaucracy has piloted these reforms and is deeply committed to them. It was the Secretary, Department of Industrial Policy and Promotion (DIPP), who started a system of ranking states, leading to intense competition amongst them. Further, DIPP did a detailed analysis and gave a list of as many as 340 parameters of reform. At the state level, we worked as a team to issue government orders, take policy decisions and monitor implementation. As chief secretary I found that most principal secretaries of departments were extremely enthusiastic about carrying out reforms despite opposition from their departmental officers. The higher civil service is definitely geared to sustain these reforms.
Now, the Government of India has rightly decided to move ahead and rank states according to the perception they offer about their business environment — ease of doing business is ultimately about perception, and the hurdles that an investor faces at the stage of implementation determines his perception about the business environment of a place. To determine the perception of the shareholders we, in the UP government, got a study conducted by IIM Lucknow, Jaipuria Institute of Management and Lucknow Management Association. The study revealed that despite an enabling policy environment there were certain weak areas. Industry felt that on parameters like getting a No Objection Certificate from the pollution control board, registration of plots, tax issues and transparency in dealings, the actual environment continues to be difficult.
It was found that the idea of a “single window” does not operate as one in reality. Despite having a common application form and online clearances in a time-bound manner, there remained a tendency to raise unnecessary issues and force the entrepreneur to visit the concerned government office. Moreover, even after getting electricity load sanctioned on line, the junior engineer would make the entrepreneur run from pillar to post to actually get the connection. The investor may receive an NOC from the pollution control board, but faces constant harassment from frequent visits by pollution control officers to his plant.
It is the same story with labour inspectors or factory inspectors. Ease of doing business is determined not only by the ease of entry and exit, but the regulatory environment faced by the investor once he sets up his industry. The perception of the existing industry is vital to ensure the sustainability of reforms. For example, we had made the registration of industries online, automatic and immediate. To my consternation, I found that the reform was opposed by all general managers of district industries centres since they felt their power and authority had been encroached upon. These are the kind of officers whose mindset needs to be changed if reforms are to become reality. These officers do not belong to the higher civil service. They are generalists as well as specialists at the middle or lower level of government departments.
The mindset change can be brought about by repeated and rigorous training, linking the performance of officers with their positive contribution to reforms, and, also enforcing rules which minimise interference in business activity by predatory officers. It is not the higher civil service which is creating obstacles but officialdom at the cutting edge. We must diagnose the problem correctly to prescribe the right medicine.