‘Buying a gun easier than opening a restaurant in Delhi: Chief Economic Advisor’
Analogy given by Chief Economic Advisor for improving the ease of doing business in India
by Shishir Sinha
Buying a gun is easier than opening a restaurant in Delhi. This is the analogy Chief Economic Advisor Krishanamurthy Subramanian gave for improving the ease of doing business (EoDB) situation in India.
Using a detailed power point presentation to explain the Survey, he said that 19 documents have to be submitted to the Delhi Police to buy a gun in India, while to open a restaurant, 45 documents are needed to obtain a licence.
In India, it takes about 18 days to complete 10 cumbersome procedures before setting up a business.
Cumbersome exercise
Though India has climbed up in the EoDB ranking to 63 from 142 during the last six years, it still trails in ease of starting business, registering property, paying taxes and enforcing contracts. All these need to be taken up on an immediate basis, Subramanian said.
He expected exports of network products (NPs) to equal $7 trillion worldwide in 2025. This will help in estimated Incremental value added from exports at $248 billion in 2025, which is one-fourth of the increase required for $5 trillion economy. This could result in creation of four crore well paid jobs by 2025 and eight crore by 2030.
$5-trillion target by FY25
On the timeline for a $5-trillion economy, Subramanian categorically said there would be no change. This is interesting from the current growth projection numbers. India is expected to grow at the rate of 5 per cent during current fiscal, while next fiscal, according to Economic Survey, this number could be 6 to 6.5 per cent. This means GDP growth could be more than 9 per cent every year during the next four fiscals (2021-22, 2022-23 and 2023-24 and 2024-25). The Government intends to achieve a $5-trillion target by FY25 from the current level of $2.7-2.9 trillion.
He expressed optimism about green shoots such as uptick in Purchasing Manager Index of manufacturing and services. The economy has hit the bottom and it will improve as GDP growth rate is expected to pick up during second half (October-March) of current fiscal.
The uptick in the second half of 2019-20 would be mainly due to ten positive factors such as pick up in Nifty India Consumption Index for the first time this year, an upbeat secondary market, higher FDI flows, build-up of demand pressure, positive outlook for rural consumption, rebound of industrial activity, steady improvement in manufacturing, growth in merchandise exports, higher build-up of foreign exchange reserves and positive growth rate of GST revenue collection.
There is a feeling that merger of public sector banks may increase the financial strength of the merged entities, lower the risk aversion and result in lowering of lending rates. Further, as concerns over GST implementation are addressed, the increased unification of the domestic market may reduce business costs and facilitate fresh investment.