January 20, 2016 Print

Photos: Jeevika Photography Competition

The best entrepreneurial ideas are all pointless if an impenetrable bureaucracy stands in the way of bringing those ideas to market. India has made remarkable strides in the past two decades in overcoming the socialist planning bureaucracy that crippled the country for so long, but a web of regulation and licensing still surrounds the nation’s economic activity — and nobody is harmed more than those at the bottom rungs of the economic ladder. Despite incremental improvement each year, there’s a long way left to go. India is currently ranked in 130th place among 189 nations on the World Bank’s “Ease of Doing Business 2016” index, up from 142nd place two years earlier, and is near last on the list for key aspects like enforcing contracts and obtaining construction permits. To combat this pervasive problem, India-based Atlas Network partner Centre for Civil Society (CCS) has worked for nearly two decades to dismantle the burdensome regulatory costs that choke entrepreneurial initiative throughout the country.

“We are happy to see the improvement in India's rank from 142 to 130 [on the ease of doing business],” said Prashant Narang, senior manager of iJustice, a public interest legal advocacy initiative of CCS that advances laws promoting personal, social, and economic liberties, while imposing limits on state power. “Most of it comes from an online single-window interface with timelines for licenses, permits, and approvals. A lot more needs to be done to achieve a slot in top 50, especially in the area of contract enforcement, which remains a challenge.”

Building a movement for practical reform

CCS advocacy efforts have driven India’s reform conversation to the point that the country’s government “has initiated reforms aimed at bringing India into the top 50 ranks in the ease of doing business,” the recently developed CCS Ease of Doing Business website explains. A few reforms are already in the works, including up-front minimum capital requirements for new businesses and the need to obtain a government certificate before beginning operations. Other streamlining includes “allowing single-step incorporation of companies and integration of 14 government services on an online single-window portal. Cross-border trade has been made easier by cutting the number of forms for export and import to three from seven and nine, respectively. ... Centre for Civil Society looks at the [ease of doing business] reforms as an opportunity to lift lives of millions of poor both directly and indirectly; directly — by way of deregulating bottom-of-pyramid livelihoods such as street vending, e-rickshaw, cycle rickshaw and indirectly — by way of job creation in micro, small and medium enterprise sector.”

CCS has set specific and realistic objectives to measure its success in reducing the cost of doing business in India. First, it aims to reduce the number of procedures required to start a new business from 11 to nine in Delhi, and from 13 to 10 (in Mumbai. Accordingly, CCS hopes that cutting some procedural red tape will also reduce the number of days needed to start a new business from 27 to 22 in Delhi, and from 30 to 25 in Mumbai. The organization also aims to reduce the average number of days it takes to enforce a contract from 1,420 to 500.

Achieving livelihood freedom for urban and rural poor

Although government officials have taken a few tentative steps down the road to substantive reform, ongoing vigilance is necessary to show why economic freedom is an immediate and crucial issue. In addition to the legal initiative iJustice, a wide array of other CCS projects support its goal of reducing business costs in India. The organization launched its Jeevika: Law, Liberty & Livelihood campaign in 2009 in order achieve greater livelihood freedom for the rural and urban poor, as well as promoting choice and accountability in the area of skill development for India’s underprivileged youth. It aims to further public policy measures to clear the path for free enterprise by eradicating market entry and exit barriers for street entrepreneurs (i.e., street hawkers, cycle rickshaw pullers, small shop owners, etc.), and tribal groups, as well as micro, small, and medium enterprises.

The annual Jeevika: Asia Livelihood Documentary Festival is devoted to narratives that show the plight of entrepreneurs as they battle government restrictions and harassment. The festival enjoys support from major Bollywood celebrities and philanthropists, including Shabana Azmi and Nandita Das, and has provided a unique platform to filmmakers who bring awareness to the difficulties for many of Asia’s small businesspeople, such as street hawkers, cycle rickshaw pullers, and small shop owners. In the most recent Jeevika festival, the EduDoc documentary category focused on films that tell the stories “edupreneurs,” those who bring innovative and affordable private education alternatives to poor parents.

“CCS has organised the annual Jeevika Festival since 2003, to capture the livelihood challenges and success faced by the rural and urban people in Asia,” said CCS Director of Operations & Outreach Manoj Mathew. “The festival brings to light policies and regulations that limit livelihood freedom of the poor, by encouraging documentary makers to find interest in livelihood issues and providing them a platform to share their experiences and creativity. Jeevika: Asia Livelihood Documentary Festival hopes to strengthen the freedom struggle of the poor and change the attitudes and minds of many towards inclusive and sustainable development and to advocate for liberalisations at the bottom of the pyramid.”

Repealing obsolete, redundant laws

One of the reasons that Indian regulations can be so impenetrable, especially for new entrepreneurs, is that the country inherited a web of bureaucracy from its years of British rule, and only continued to build on that foundation after the country gained its independence. The CCS “Repeal 100 Laws” project aims to clear out the Indian legal system of its thousands of obsolete, redundant, and restrictive business and economic regulations; ineffective governance and administration; obstructive civil and personal interference; unnecessary taxes and levies; archaic colonial-era enactments; obsolete laws from the era of new independence and reorganization; and more.

After a successful launch of the project in 2014, after which a government commission acknowledged the need for immediate repeal of several obsolete laws, CCS plans to continue its analysis of laws that are redundant, or that materially impede the lives of citizens, entrepreneurs, and the government. India has an active federalism, which means that the central government cannot force states to initiate reforms. In the project’s second phase, CCS is therefore playing a role in state level-advocacy, focusing on laws in the states of Delhi and Maharasthra, home to the capital cities of New Delhi and Mumbai. CCS has outlined a number of strategies to accomplish state-level change, including media campaigns and first-hand discussions with policymakers, publishing studies on how to take practical steps toward reform, building coalitions and organizing workshops, and gathering field research that tells the stories of entrepreneurs who struggle to make their way through the system.

“Both new governments in Delhi—the state and the Union—are committed to reforming the ease of doing business, the quality of public services including education, and overall transparency and accountability in governance,” wrote Parth Shah, CCS president and founder. “This environment provides us with an important opportunity to influence the next generation of reforms that we believe will set India on a new trajectory of sustained growth.”