Lawyers are a much maligned community; they are perceived to be folks with black money. However, both the law firm I helped set up and me personally have been fully tax compliant for years. As a result, I have endured ridicule from friends and colleagues for being tax compliant – an idiot is what they thought of me. One even smilingly said that we were fools to have the Indian government as the largest stakeholder in our partnership firm. Hence, on 8 November, 2016 when the Rs.1000 and Rs.500 notes were demonetized, I derived sadistic pleasure from the discomfiture of the howlers.
I robustly defended the Prime Minister’s move to strike out at black money and its hoarders. Plenty arguments were made against demonetisation from a logical and an economic perspective, but my reaction was that the decision ought to be tested on the basis of its final outcome — proof of the pudding would always be in its eating. Hence, I had great expectations from the Prime Minister’s end December speech and was saddened by its failure to scream out success. I consoled myself by blaming a subversive bureaucracy. The very funny “mitroon” jokes which floated around in the run up to the speech I thought contributed to an uninspiring speech.
However, not one to give up hope so easily, I banked on the Finance Minister’s budget presentation to take the strike on black money forward. My expectation was that the budget would report on the success of the strike on tax evaders and announce measures to incentivise tax compliance in the form of reducing tax rates or moving up tax slabs. I expected that this would reduce the burden on those tax payers who were compliant. My hopes were dashed when the incentives came in the form of peanuts.
The budget was probably acceptable in a financial prudence context, but it completely missed out on justifying demonetisation or on incentivising tax compliance. Hence, it felt like another slap in the face for the expectant compliant tax payer and the common man that had stood in long queues to access cash. This also focused me on to the various policy announcements of the Prime Minister’s that were ineffective on the ground. With some exception on highways and bits in the railways sector, not much seemed to change elsewhere.
The ease of doing business had not improved on the ground. Changes in law such as the bankruptcy code, real estate law, commercial courts and arbitration law remain largely ineffective. Tax law and its administration continue to be difficult. While progress has been made with the GST, it is yet to become reality. It makes one nervous to think about whether there could be a proverbial slip between the cup and the lip. To compound things, nobody seems to be giving a damn about making the judicial system or the bureaucracy more effective and accountable. As a consequence, there has been very little progress with the Make in India or the Start-up India initiatives.
The Clean India idea suffers the same fate and now remains a slogan. One simply needs to step onto the street in most cities, towns or villages for reality to be both smelt and seen. I simply do not understand the grand standing around the power sector. We are power surplus he says. Difficult to swallow when one faces power cuts regularly. The fate of initiatives like Smart City or Digital India appears to be the same, i.e. reduced to mere slogans with no change on the ground. But none of this stops the bureaucracy and some smug but ineffective ministers use their fine English to spin facts. As if the ability to speak the English language or use fancy jargon was a substitute for real change. Nobody has the decency to accept their failings, Mr. Gadkari probably being an exception to a small extent.
For someone who cast a NOTA vote in the last general election, I continue to believe in the Prime Minister’s ideas. However, am gradually losing confidence with his ability to deliver. Sad, but true. He seems completely handicapped by the lack of an effective delivery team, that appears to have mastered the art of spinning implementation failures into success stories. However, the Prime Minister popularity rankings continue to be high. As I wonder, this it appears is on account of (i) his ability to invoke faith in his intent with the common man, and (ii) the lack of a credible personality in the opposition ranks.
In this increasing sense of gloom, I could not but think of a few low hanging fruits that need plucking. Am one of those that continue to see the Prime Minister as well intentioned, a man with original ideas and with his heart in ushering real change for the people of India. On that premise, a few ideas.
- Make the bureaucracy more effective: One does not have to be a rocket scientist to recognise the ordeal suffered in dealing with the Indian bureaucracy. It has a bunch of bright but demotivated officers, who like inaction, are unwilling to accept real accountability and often corrupt. The consequence is focused self-interest orientation and a lack of empathy for the needs of the citizenry.
To begin, it might help to incorporate citizen feedback into their appraisal system and give it significant weightage. The same applies to the police. One of the modes to gather feedback from the public would be to allow every citizen to provide feedback on his or her experience in dealing with the government. This could be done through a simple but an effective electronic mechanism. For example, see how the Decathlon stores gather feedback on customer satisfaction.
Also, their remuneration system could include a bonus component, say 30% of their overall remuneration. The bonus component could be large and based on feedback, i.e. from citizens and colleagues, senior and junior.
- Judicial reform: No sanctity of contracts is probably the most significant issue for ease of doing business, often greater than bureaucratic red tape. Minor tweaking of procedural laws (example commercial courts etc.) will not get us there. Confidence in the enforceability of contracts in an effective manner continues to be low and needs significant improvement.
To say that the system is overburdened is a miserable excuse with the common man and business continuing to carry the brunt of a slow judicial process. Speed needs to be recognised as an essential aspect in administration of justice. While there are a few traditional ideas around speeding up the process and making it more effective, technological measures like establishing judicial BPOs, use of artificial intelligence and imposing real costs on a losing party need to be explored.
- Ease of living/doing business: Since it was voted in, this government has frantically tried to popularise this initiative, but sadly only through some unimaginative measures. A whole section of the Finance Minister’s recent Budget speech was devoted to the ease of doing business. However, the proposals merely nibble at the fringes of what is a much larger problem.
A thought in the right direction might be in terms of replacing the approvals and licenses regime with a self- certification regime which is backed by a detailed code on compliances. Faulty or false certifications could attract stringent consequences. There could also be a web based advisory facility, FAQs to help citizens and businesses comply with their legal obligations. Furthermore, setting up of citizen facilitation desks, say 5 in each district would be a step in the right direction. Seed funding is an issue for new entrepreneurs, but it’s significantly smaller an obstacle than ease of doing business.
Of the many changes that could bring change, the above three could fundamentally change the India experience and improve ground realities. If implemented quickly and effectively, they could bring real change on the ground. This might not just propel the Prime Minister into another term in government but also get him an important space in our history books.