Tuesday, November 03, 2015

Rising 12 points in the Ease of Doing Business is like Air-India claiming improvement in OTP

India rising 12 places from 142 to 130 in the World bank's Ease of Doing Business Index,  sounds almost like Air-India revising its OTP ('On-time Performance') statistics by 12 points (may be from 70 - 80%). Makes little difference to a business traveler waiting at the airport with no signs of a flight already delayed by over 4 hours and the airline staff equally clueless. It also doesn't help when a co-passenger (obviously used to the vagaries of the national carrier) recalls how it used to be even worse till some years back - when flights would be routinely cancelled without notice and the airline put passengers up at 5 Star hotels at its cost. Some may actually long to go back to those days of free layovers.

Businessmen live in the present. Their points of reference would be current benchmark with other countries. Those who were dealing with India years ago may either gone or dead. When Gujarat scored high on ease of doing business it was in comparison to other Indian states. Modi had achieved this by creating a business friendly environment riding on the enterprising Gujarati spirit - but above all by creating a responsive and efficient bureaucracy.

No matter how many how many Dream-liners Air India buys - the dream of turning around the airline won't fructify till the attitude and work-culture of the staff change. The command structures are different at the state level - where the writ of the Chief Minister runs. Delhi has its own laws of the jungle which can't be managed out of a CCR (Central Control Room) in South Block. Introducing bio-metric attendance systems or curtailing Golf sessions of senior bureaucrats - don't automatically make for an efficient administration (as an aside, in many other Asian countries - it is in fact par for the course - to discuss business over Golf with Ministers and Bureaucrats).

Many foreign business honchos will say - how difficult it is to obtain audience with senior secretaries. Very often they don't get past the PAs or at best the Joint Secretaries. There is a story - perhaps, apocryphal, about the visiting CEO of a large MNC who with great difficulty managed to get an appointment with a senior minister. It seems the Minister - a cricket enthusiast - was busy watching an ODI match on the TV in his office - throughout the meeting - commenting on the game and educating the foreigners (obviously not British) on the nuances of cricket. Finally, said good-bye to them after 10 minutes with a polite "I shall look into it" assurance that really meant nothing.

In contrast, Indian businessmen find access much easier - given their old relationships and the tacit acknowledgement of "The current environment may change and we would need each other again"). This makes many MNCs to look for local partners who will help 'facilitate' entry and many even miss the old 'liaison' experts who helped open doors.

Contrary to popular perception - as revelations of several scams across the world would show - not all investors are lily white. They are willing to do "business" with the powers-that-be of whichever country keeping their own hands clean. But, what they seek is transparent policy and regulatory clarity, fewer window and doors to negotiate and time-bound decisions (like airline OTP, as it were). Above all they require access to people who are in a position to "deliver". On the last, they are quite agnostic about who to deal with - as long as the individual's word counts. That could be the Crown Prince in one country, the ruling Party President's assistant in another. Rest - by and large - they are willing and capable of managing or working-around given their vast experience across the world.

Once that is done - the states, starved for investment, will lap it up - and the best among them, who are able to get their act together, will be the winners. But, in a final analysis - it is the hydra headed monster of Indian bureaucracy which the British left behind and the Congress fed and 'fatted' - that Narendra Modi and his Ministers will have to tame if he is serious about "Make In India".

Article first published in +ABP NEWS Click here to read