Whalesbook
The Implementation Gap
Government initiatives in India aim to create a better business environment, but a new report from the Associated Chambers of Commerce and Industry of India (Assocham) shows businesses still struggle with major challenges. The main problem is a significant gap between reforms planned at the national level and how they are put into practice. The Assocham report, titled "Ease of Doing Business in India: The Path to Viksit Bharat," acknowledges progress but emphasizes that reforms take a long time to make a real difference for companies.
Bureaucratic Roadblocks and Digital Weaknesses
Outdated approval processes and ongoing demands from local officials are major obstacles, hindering the goals of "ease of doing business" reforms. Single-window systems, meant to simplify approvals, often only track progress rather than acting as true one-stop shops. Companies frequently report needing to interact with many government departments, and the full list of required approvals remains unclear. The report also highlights weak digital infrastructure. Technology systems meant to support reforms are sometimes not updated, leaving government bodies unable to effectively process new rules. These digital gaps, combined with ingrained informal practices and a lack of accountability, mean old administrative habits continue despite new policies.
Regulatory Burden and Suggestions
The Assocham report also voices concerns about the total regulatory load. While some rules are being simplified, new ones are introduced without proper review or checks for proportionality, increasing overall compliance burdens. For example, environmental clearance rules for building projects now require approval for structures over 20,000 square meters, even if pollution potential is low. This has reportedly led some developers to reduce project sizes to avoid the strict requirement. To tackle these ongoing issues, Assocham suggests continuous, structured dialogue between industry groups and policymakers at both national and state levels. This ongoing interaction should cover not just drafting regulations but also their implementation and review, offering vital insights into real-world operational impacts and bottlenecks. The industry group also recommends better use of third-party inspection systems through solid accreditation processes and clearer guidelines for outsourcing, along with defining the legal status of third-party certifications.