In a new development, the government is mulling over ranking ministries on their ease of doing business after extensive consultations with industry leaders, startups and trade bodies. This seems to be an extension of Finance Minister Nirmala Sitharaman’s announcement on September 5, 2020, of the 4th edition of Business Reform Action Plan (BRAP) ranking of states. This Plan was started in 2015 and its net was widened in 2020. The Business Reform Action Plan 2018-19 includes 180 reform points covering 12 business regulatory areas, such as access to information, single window system, labour, environment, etc. The idea was for states to attract investments, foster healthy competition and increase ease of doing business.
Now with the ranking system for ministries, it seems that the government is fostering healthy competition among them to push for a growth-based agenda wherein they will be responsible and accountable for their contribution to the ease of doing business in India and promoting foreign businesses to invest in India.
This serves the larger purpose as outlined in the Annual Financial Investment presented on February 1, 2022, by the finance minister, wherein the government has set up an ambitious yet a difficult objective of providing 60 lakh jobs in the next five years. This inter-ministerial ranking might just prove to be an important and innovative parameter to attract foreign investment. Market loves innovation and this innovation at the level of ministries may prove to be a turning point for the government which has been facing flak for not being able to create jobs.
These rankings, a senior government official reportedly said, are being prepared in extensive consultation with senior industrialists, industry bodies, trade and policy groups as well as representatives of startups and are likely to be announced shortly.
The time taken for approvals, single-window project clearances being facilitated by a ministry, the number of permits required to set up a new unit, the total percentage of budgetary allocation spent, physical files created, complaints raised and cleared per month, industry interactions organised, use of renewable energy sources on their facilities and ease of access to department websites are rumoured to be some of the salient features of this ambitious plan of the government.
All these parameters are expected to be applicable to central ministries as well as public sector enterprises. The government already has in place various inter-ministerial rankings for overall performance in direct benefit transfer, performance in end-to-end digitisation and use of Aadhaar and mobiles, performance in portal and reporting compliance and in reporting of estimated savings. The performance of the ministries for these areas is calculated on a maximum score of 100 and is based on a well devised methodology. A similar score and methodology may be used by the government to measure the inter-ministerial performance regarding ease of doing business. As per sources, the idea behind this action is that the government wants to minimise generation of physical files to reduce corruption and encourage ministries to adopt digitalisation in everyday work.
The government’s intent is to evaluate the ministries on the basis of two different sets of parameters, the same being “important” and “desirable”. The latter includes indicators, such as ease of access to the website, development of applications for faster processing of work, etc. Public sector enterprises are already being ranked in this manner by the government and while Rail Vikas Nigam Limited, Shipping Corporation, National Backward Classes Finance and Development Corporation were the highest scorers, the Mahanagar Telephone Nigam Ltd., National Research Development Corporation and Ferro Scrap Nigam Ltd. fared the worst.
This initiative by the government is going to be a part of the Ease of Doing Business 2.0. The finance minister while presenting the Budget said that this new phase of doing business will be guided by the active involvement of states, digitisation of manual processes and interventions, integration of the central and the state-level systems through IT bridges, single-point access for all citizen-centric services, and standardisation and removal of overlapping compliances.
Crowd-sourcing of suggestions and ground-level assessment of the impact with the active involvement of citizens and businesses will be encouraged, she said. She also stated that it is the “endeavour of the government to improve productive efficiency of capital and human resources” and that it will follow the idea of “trust-based governance”.
As a result of the government’s strong commitment towards “minimum government and maximum governance”, over 25,000 compliances were reduced and 1,486 Union laws were repealed in recent years, she said. Sitharaman also announced that with the advent of Amrit Kaal, the next phase of Ease of Doing Business (EODB 2.0) and Ease of Living will be launched.
Speaking to India Legal, the National Co-Coordinator of the Legal Cell of the Indian Youth Congress and incharge for West Bengal, Ambuj Dixit, said: “We too hoped that this will be the Budget that helps the common man. But the government is more focused on businesses and helping its friends and growing its funding. We are not saying that businesses are not important, and Ease of Doing Business is the hallmark of any country’s progress in this era of globalisation. However, there is no guaranteeing that this Ease of Business 2.0 will deliver what Ease of Doing Business 1.0 could not. There is no guarantee that it will generate jobs. We do hope it does as the people are facing the worst time in their lives and this government has time and again failed to deliver.”
While the idea in theory seems to be great and combined with the Budget speech, it seems it can do marvels if implemented correctly, the actual effect will have to be seen after the ministries are ranked. Further, the ranking of ministries alone won’t be sufficient to attraction foreign investment. More will have to be done, legislated and implemented.
—By Abhilash Kumar Singh and India Legal Bureau