It takes more than double the time to start a business in India though China has more approval procedures.
It takes more than double the time to start a business in India though China has more approval procedures.
The so-called single window clearance for foreign direct investment (FDI) in India is a myth. Even if one gets automatic clearance for investment, a project still encounters innumerable roadblocks before commercial operations can begin.
Why is India lagging far behind China? It is not because its policies are more restrictive than China's. The main reason is the bureaucratic tangle. It takes more than double the time to start a business in India though China has more approval procedures.
A glaring lacuna is the absence of any effective competition law. The Competition Act of 2002 is a step in the right direction but till today it has not become enforceable. An Amendment Bill is pending but when it will be passed cannot be predicted. This can happen only in India. Other countries have their laws in place and there is no ambiguity so far as foreign investors are concerned. We do have our Monopolies and Restrictive Trade Practices Act but that is more to curb monopolies and not a law to promote competition. In any case the MRTP Act has lost its relevance due to the prevailing uncertainty about its impending end. This does not inspire confidence among foreign investors.
Efficiency of the judiciary depends on the infrastructure to administer justice, and this is totally lacking. Besides, in India we have overlapping laws, outdated laws, ill-drafted laws and unenforceable laws. How can one blame the judiciary which has been entrusted with the onerous task of interpreting these laws? Then there is the negative mindset of the government, which is the largest litigant. If the government were to act as a model litigant, by not appealing against every order, a major portion of the pendency of suits would go in one stroke. This would reduce the notorious legal delays which are a nightmare for foreign investors. God forbid, if they ever get involved in litigation.
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