Many schemes were brought under Ease of Doing Business aimed at creating a conducive business environment in the country. Department of Promotion of Industries and Internal Trade (DPIIT) has been made the Nodal Department for coordinating the initiatives. It brought some fruits and India’s rank in the World Bank’s Doing Business Report (DBR) improved. In 2014, India’s world ranking was 142nd in ease of doing business, which improved to 63rd in 2019, registering a jump of 79 ranks in just a span of 5 years.

However, the expected accelerated result was far away. FDI inflow in 2014-15 was $45.15 billion, but it could increase to about only $74.39 billion in 2019-20. The steps taken to improve Ease of Doing Business included simplification and rationalization of existing processes, and reforms in the areas of Starting a Business, Paying Taxes, Trading Across Borders, and Resolving Insolvency.

PM Modi’s second term began with his spectacular win in 2019 Lok Sabha election and soon after Make in India 2.0 was launched under which 27 sectors were under focus. Department for Promotion of Industry and Internal Trade is coordinating action plans for 15 manufacturing sectors, while Department of Commerce is coordinating 12 service sectors.

The Government of India made continuous efforts under Investment Facilitation for implementation of Make in India action plans to identify potential investors. Support was being provided to Indian Missions abroad and State Governments for organising events, summits, road-shows and other promotional activities to attract investment in the country under the Make in India banner. Investment Outreach activities were being carried out for enhancing International co-operation for promoting FDI and improve Ease of Doing Business in the country.

Government took various steps in addition to ongoing schemes to boost domestic investments in India. Those included the National Infrastructure Pipeline, Reduction in Corporate Tax, easing liquidity problems of NBFCs and Banks, trade policy measures to boost domestic manufacturing. Government of India also tried to promote domestic manufacturing of goods through public procurement orders, Phased Manufacturing Programme (PMP), Schemes for Production Linked Incentives of various Ministries, GST, financial market reforms, consolidation of public sector banks, enactment of four labour codes, FDI policy reforms, other sectoral reforms, and reduction in compliance burden.

Even to deal with the disruption in Make in India 2.0 during COVID-19 crisis, the government came out with Atmanirbhar packages, introduction of Production Linked Incentive (PLI) Scheme in various Ministries, investment opportunities under National Infrastructure Pipeline (NIP) and National Monetisation Pipeline (NMP), India Industrial Land Bank (IILB), Industrial Park Rating System (IPRS), soft launch of the National Single Window System (NSWS), etc.

However, the FDI inflow remained at about $81.97 billion in the financial year 2020-21. By September 2022, though the desired level of FDI was not received, the Centre boasted that Make in India was one of the first “Vocal for Local” initiatives that exposed India’s manufacturing domain to the world, and claimed that it has potential to not only take economic growth to a higher trajectory but also to provide employment to a large pool of our young labour force. Main pillars of “Make in India” the government said were – New Processes, New Infrastructure, New Sectors, and New Mindset. Even though FDI inched upward only to $83.57 billion in 2021-22.

It was felt in the government that FDI was not coming at desired level chiefly because of compliance burden on foreign companies. To solve this riddle Modi government came with Jan Vishwas (Amendment of Provisions) Bill, 2023, which was passed in Lok Sabha on 27th July 2023 and in Rajya Sabha on 2nd August 2023. The Assent of the President was received on 11th August 2023. The Jan Vishwas (Amendment of Provisions) Act, 2023 was notified in the Gazette of India the same day. The Act decriminalized 183 provisions of 42 Central Acts administered by 19 Ministries/Departments.

Now the Union Minister of Commerce and Industry Piyush Goyal has said on the eve of the 10th birth anniversary of the Made in India scheme that the government has shortlisted another 300 law points and sections which can be decriminalised under Jan Vishwas 2.0. The aim is to give further thrust to manufacturing sectors through reducing the compliance burden of half of them. Decriminalisation will be done through inter-ministerial consultations.

Under the Make in India, the total FDI inflow in the last decade during 2015-2024 was only about $663 billion, and FDI equity inflow in manufacturing sector was only $165.1 billion. Average yearly inflow is therefore very low despite the steps taken. It would be simply a novice idea to believe and to propagate that foreign companies are not coming to India under Make in India programme due to merely compliance burden, and if their activities and provisions would be decriminalized, they will rush in. We have seen that decriminalisation of 183 provisions under Jan Vishwas 1.0 did not work as expected. Decriminalising another 300 provisions may also not help much unless the socio-political environment is the country is not brought to the normal to enable enterprises to function normally.

Mounting socio-political tensions, disruption in connectivity both of electricity and internet, frequent internet shutdowns not only to prevent escalation of violence but also for preventing online exam paper leaks, curfews, market shutdowns, all sort of agitations vitiating the industrial relations etc are also inhibiting factors. The leaders of the ruling establishment have a greater responsibility than the opposition leaders both in terms of bringing appropriated laws and their fair implementation.

Workforce and their Trade Unions must be taken on board before pushing the labour reforms at their cost, such as alleged in case of the four labour codes to be implemented. Better industrial relation and peaceful social environment only can allow rapid development of the country, but no amount of decriminalisation in favour of business and industries at the cost of social security of workforce and common people could succeed. Ease of doing business must not merely be driven with the idea of profiteering, but it must include social security, and human welfare centred activities. (IPA Service)