Business friendliness is key to the transformation of our society

India ranks very low in the list of countries favorable for business. There is poor perception about the business class in the society, specially in eastern part of the country. Not relying on the wisdom of business class, so many restrictions have been put up and you need a number of licenses to open a hotel, restaurant or a medical shop. The restrictions lead to corruption and give birth to manipulating business class, which further erodes their credibility.

No one should have a doubt that society cannot run without the business people. The local kirana shop serves the society by arranging several products from various sources to make them available under one roof. The wholesalers acts as interface between the producers and retailers. All survive because there is a need in society and not otherwise. Artificial curbs and interventions only disrupt the system and discourage newcomers to enter into the field, even when there is a gap. Lack of perfect competition leads to cartels and oligopoly, if not monopoly. We must remove the restrictions to allow new entrants and foster competition.

Interventions in business by way of subsidy and low-priced facilities are again detrimental to the growth of fair business. Subsidies are subject to corruption and you cannot stop it as any form of discretion will lead to corruption or favoritism. We can observe this from the success of private markets with the Govt. ones. While private markets, often called as malls do a brisk business, but the Govt. ones have a lacklusture look. In Kolkata, we have examples of Gariahat Market (Govt.) and Mani square (Private). The reason being, low-priced shops are cornered by people, who intend to transfer them in future. Whereas the private ones are fully priced and only those who are serious to do business occupy them. With more than half of the shops closed, the Govt. sponsored market fails, whereas the fully operative market moves on. Nobody wants to visit half-open market. This is the glowing example that subsidy does not work in attracting business.

There is urgent need to change the perception about businesses in society. We must take them into confidence. They need to consulted about the problems in society. The business class today need more moral support than subsidies. Subsidies lead to manipulations and give birth to crony capitalists. We need to resist it.

Ministry expansion and our expectation

PM has expanded and reshuffled the portfolio of some ministers. Induction of Manohar Parrikar in defense, Suresh Prabhu in Railways and Jayant Sinha in finance is welcome.

It is widely expected that these people will shake-up and shape-up our economy. Defense and Railways are waiting too long for modernization. It is expected that they will involve the local institutions for improving the technology rather than just importing it. After initial thirst on indigenous developments after independence, we have fallen too much on imports. Indigenous technology not just save on foreign exchange, it also improves the research infrastructure. We are capable of building world's best satellites, but are dependent on others for artillery. Similarly, it is long back, when we raised the average speed of our rails. IITs, NITs and IIMs be involved in decision making for creating world-class capabilities in defense and railways. With professionals like Parrikar and Prabhu at the helm, we have every right to hope.

Similary, Jayant Sinha with his international experience can advise ways to remove hurdles for new business ventures. We need to move away from subsidy regime to facilitating regime. A move suggested once by our RBI Governor about a trading platform for commercial bills of large corporates be made real. This will bring the transparency in the payment system of corporates, apart allowing the working capital support to MSMEs.

Manpower consultancy for small scale sector

We are experiencing serious manpower crisis in the small scale sector. These enterprises cannot afford to employ good professionals, but are not getting the ones, who can fit their bill.

The educational and aspirational gap between our new graduates is huge. On the one hand, there are good offers for the freshers and on the other hand, the quality of other graduates does not fit into scheme.

There is need for the small sector to realise that facts about the market and they should be prepared to outsource the expert jobs and rely on inexperienced or incapable staff for day to day recordings. Many a organisations outsource their accounting functions to professional firms with clear cut deliverables.

Professional firms also need to scale up their staff strength to service this sector as they are best equipped to train and guide unskilled staff. The trained staff can be placed with larger clients.