Productivity Technologies Access, Capital availability, Clarity of Norms & Techno - Commercial Standards, Easier Process for Compliance, Power, Water and Sanitation
By: Amit Bhushan Date: 1st Dec. 2015
We have ongoing debate on improving on Factor-related norms to ease 'growth' while the central government focusses on market uniformity basis Tax simplification possibilities through GST or Direct Tax or similar code intended to reform Corporate Taxation. Because of the political mess, the proposed reforms on Land and Labour or so to say Factors have been left in Limbo while those about Capital are become relatively freer with more sectors being opened up, at least in theory.
According to pundits, the situation of morass in the manufacturing sector is largely due to competitive situation deterring entrepreneurs. Therefore a change in Factors related policy should result in large gains. This is assuming that land related politics or non-availability of credit has little role and most other factors are similar in competing nations.What is often heard from local small entrepreneurs is often a different story. It is more about issues posed by local bureaucrats or inspectors regards compliance which ends up as Hafta to a local Politician or Consultant who would sort out various issues and this is about running or the workshop or factory.
Then there are issues in procurement of raw material and components, which are seldom reaching on time due to various blockages from municipal to state authorities including tax related ones or even traffic or administrative police; which require considerable effort, time and money to sort out. Often the selection of right vendor is basis their ability to overcome such hindrances to reach goods on time rather than quality, credit and cost alone. Finally pertaining to distribution of goods, wherein reaching out the goods to buyers again has issues from Tax authorities, various inspectors and a general lack of Standards or grading mechanism which makes convincing customers very difficult and also ensures that a lot of unscrupulous players exist in the market to deter customer confidence as well as ensuring long litigations and endless disputes.
The distributors are often those who can manage these issues rather ones who would get maximum customers or sales (alone).It is in this situation that an entrepreneur is supposed to chase for the best Productivity technologies as well as innovate, so that they can compete effectively. And since the banks have little understanding of the businesses, they tend to be circumspect about such innovative technologies till the time they have seen success in local market. What is often required to convince banks is display of enough machismo to manage "all or most" of the survival traits in business around managing the hindrances or goons often acting in consort with powers that be, in the state.
Often in such a situation, entrepreneurs feel little incentive to innovate or go for the latest technologies since these are more expensive and therefore increase risk, while the reward is often taken away by unscrupulous market forces, at least in the crucial initial years. Such a situation therefore ensures that new entrepreneurs who do not have long survival capability in adverse conditions are not "starting up" while the old players are often waiting for competition before taking a leap since this may involve disturbing equilibrium with not very clearly known output.
Given the tumultuous political situation, talk about reforms in Factors especially at the state level is a safer political bet. It tends to push onus on states which may not be wrong, however not putting any record of actions being proposed or taken by states and a lack of monitoring of metrics or result. This is because politicians do not want to disturb the existing bureaucracy as well as their own entrenched interests in the established affairs. This is even as they would want to battle out new political forces on anvil vigorously while trying to convince public of their own commitment to "Good Governance".
It serves well that focus is shifting away from metrics as well as RTI related "blatant" violations or "khulasa" for ordinary people about their ordinary woes which has been abandoned by almost all "players". This gives chance to almost all to make a case for bringing down corruption in government. This is while the political leaders continue to haggle about the not so material issues while debating simplification or tax or for code for real estate related dealings or waterways etc.
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By: Amit Bhushan Date: 1st Dec. 2015
We have ongoing debate on improving on Factor-related norms to ease 'growth' while the central government focusses on market uniformity basis Tax simplification possibilities through GST or Direct Tax or similar code intended to reform Corporate Taxation. Because of the political mess, the proposed reforms on Land and Labour or so to say Factors have been left in Limbo while those about Capital are become relatively freer with more sectors being opened up, at least in theory.
According to pundits, the situation of morass in the manufacturing sector is largely due to competitive situation deterring entrepreneurs. Therefore a change in Factors related policy should result in large gains. This is assuming that land related politics or non-availability of credit has little role and most other factors are similar in competing nations.What is often heard from local small entrepreneurs is often a different story. It is more about issues posed by local bureaucrats or inspectors regards compliance which ends up as Hafta to a local Politician or Consultant who would sort out various issues and this is about running or the workshop or factory.
Then there are issues in procurement of raw material and components, which are seldom reaching on time due to various blockages from municipal to state authorities including tax related ones or even traffic or administrative police; which require considerable effort, time and money to sort out. Often the selection of right vendor is basis their ability to overcome such hindrances to reach goods on time rather than quality, credit and cost alone. Finally pertaining to distribution of goods, wherein reaching out the goods to buyers again has issues from Tax authorities, various inspectors and a general lack of Standards or grading mechanism which makes convincing customers very difficult and also ensures that a lot of unscrupulous players exist in the market to deter customer confidence as well as ensuring long litigations and endless disputes.
The distributors are often those who can manage these issues rather ones who would get maximum customers or sales (alone).It is in this situation that an entrepreneur is supposed to chase for the best Productivity technologies as well as innovate, so that they can compete effectively. And since the banks have little understanding of the businesses, they tend to be circumspect about such innovative technologies till the time they have seen success in local market. What is often required to convince banks is display of enough machismo to manage "all or most" of the survival traits in business around managing the hindrances or goons often acting in consort with powers that be, in the state.
Often in such a situation, entrepreneurs feel little incentive to innovate or go for the latest technologies since these are more expensive and therefore increase risk, while the reward is often taken away by unscrupulous market forces, at least in the crucial initial years. Such a situation therefore ensures that new entrepreneurs who do not have long survival capability in adverse conditions are not "starting up" while the old players are often waiting for competition before taking a leap since this may involve disturbing equilibrium with not very clearly known output.
Given the tumultuous political situation, talk about reforms in Factors especially at the state level is a safer political bet. It tends to push onus on states which may not be wrong, however not putting any record of actions being proposed or taken by states and a lack of monitoring of metrics or result. This is because politicians do not want to disturb the existing bureaucracy as well as their own entrenched interests in the established affairs. This is even as they would want to battle out new political forces on anvil vigorously while trying to convince public of their own commitment to "Good Governance".
It serves well that focus is shifting away from metrics as well as RTI related "blatant" violations or "khulasa" for ordinary people about their ordinary woes which has been abandoned by almost all "players". This gives chance to almost all to make a case for bringing down corruption in government. This is while the political leaders continue to haggle about the not so material issues while debating simplification or tax or for code for real estate related dealings or waterways etc.
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