The (Dis)Ease of doing Business..

The suicide of VG Siddhartha, the founder of India's largest coffee chain Cafe Coffee Day (CCD), caused turmoil in the country after the businessman’s body was found washed ashore in Karnataka's Netravati river, 36 hours after he went missing. Two days prior to his disappearance, the 60-year-old had left behind a note to his employees that revealed he was in deep debt.  "I have failed to create the right profitable business model despite my best efforts. I would like to say I gave it my all. I am very sorry to let down all the people that put their trust in me. I fought for a long time but today I gave up as I could not take any more pressure...," his note read. The Income Tax Department acted as per law in its probe against Siddhartha after the letter accused tax authorities of harassment.

All the businesspersons in the country are mourning over this tragedy whereas the experts are busy in analyzing the faults. However, I could relate the CCD Owner’s plight with so many businesspersons I met during my stint at MIHAN project. In fact, I met many of them at the Café Coffee Day outlets for our business meetings, and we generally used to discuss the changing scenario and uncertainty in business, when I was handling the marketing and development of MIHAN project.

Any businessperson when decides to expand the business looks for speedy and smooth approvals from government departments for which he is also ready to shell out the extra amount, as for him, TIME IS MONEY. A salaried person like me can never understand the pinch of increasing interest on the loan borrowed for the project. But I could empathize with a lot of businesspersons, as I have also been a part of a start-up system, some time back. Ease of Doing Business (EODB) in India has been my favourite subject not only for delivering sessions but because I was a part of the facilitating system that attracts investments and foster development of the nation. Coming from the background of working with NGOs and placing students, helping businesspersons in setting up their business was a paradigm shift, but that also made me understand the petty issues that businesspersons face. When a businessman approaches any government department, he is generally perceived as prey to get some extra income for that department, be it land allotment, town planning, Fire and Safety or Water Supply. And the businessman is also compelled to spend some amount instead of the humiliation and wastage of time. Still, he gets frustrated while running from pillar to post after getting a red-carpet welcome from the government (read politicians).

If I have to take MIHAN Project as an example, I left the organization last year, but still, I get calls from the businesspersons regarding issues they face in MIHAN. Even after telling them that I have moved on, they insist me to advise them about the approval process with my over 5 years’ experience in that government department. This signifies that businessmen still have a lot of apprehensions while dealing with government officials, predominantly because of their corporate-averse attitude. Many of the businessmen confide that the process of approval in the project has slowed down as no one in government is concerned about the market conditions, let alone the customer delight or interest on the capital that’s borrowed by the businessman. Another issue these businessmen face is the lack of continuity, every time the person is transferred, the process starts again. And with MIHAN, the unique issue that many businesspersons face is that there is hardly any urge to attract investment amongst the officers sitting in ivory towers. Majority of the staff is retired from government organizations (having no accountability), which actually repels many companies, who initially agree to invest in the project. The Businesspersons are already busy with arranging the finance and setting up the revenue model in place, so they neither have that patience to look after the tiny things nor the time to caress the ego of the officers. Although MIHAN is a business project, it was and still being developed as an Infrastructure project. In the age of online applications and approvals, the website of MIHAN Project is not functional since last few months. (I will share more details about the MIHAN project in my research paper, to be published soon.)

No businessperson should face the consequences akin the CCD Owner, but the government, when promising Single Window Clearance to start-ups or even big companies should ensure to have dynamic Nodal Officers at various levels so that the Ease Of Doing Business (EODB) should not turn into a disease. I remember, when someone applauded the state government for allotting land to Reliance Aerostructures Ltd. in MIHAN within 20 days, I told him, the real EODB will be successful when the allotment is done within the same time period for a Micro or small enterprise. Of course, a small company also got allotment within 20 days in 2016, and the company is still doing well in MIHAN. But the changing structure of incentives and taxes always keep the small and medium business players worried about the future of their business. The corporate tax burden has already made a few companies stall their investments in India. Which means there would be no new job creation, rather the existing jobs also can be cut if the investment shifts to some other country like China. This is really an alarming situation for India to protect the learned professionals who take the risk to start their ventures and contribute to job creation. Otherwise, A LOT CAN HAPPEN OVER OPPORTUNITY-LOSS.