Baba Kalyani, chairman and MD of Bharat Forge and T V Narendran, CEO & MD of Tata Steel, who is also the CII president, on Wednesday drew attention to the problems faced by the companies at the state and district levels in ease of doing business.
They expect the Centre and states to be more aligned and hold talks to make ease of doing business reality on the ground. The CII, local chambers of commerce and industry associations could be platforms for these dialogues, both the leaders said.
Kalyani and Narendran were speaking at the first CII ‘Being Future Ready’ Business Summit. They were in conversation with Soumitra Bhattacharya, chairman of the CII National Committee on MNCs, regional president of Bosch Group, India and managing director of Bosch.
“Manufacturing does not happen in Delhi. It takes place in the states and, therefore, there is a lot of ease of doing business required at the state levels. It is difficult to critically evaluate what is happening in the states. The number of regulations the manufacturing industry had to face in every activity was extremely high, which could stop business or make it uncompetitive,” said Kalyani.
He cited the example of how buying land for factories had become expensive with the land costs accounting for 20-25% of the investment costs. This was because the states were changing land valuation every year to increase stamp duty revenues. During one of Kalyani’s recent visits to Germany, many company leaders told him that while India had immense potential but their past experiences were not encouraging.
Narendran called for healthy competition between the states while acknowledging that there are issues at the district and local levels on ease of doing business.
Around 75% of the country’s manufacturing was concentrated in eight states. Kalyani praised Telangana for doing well with better processes, approval systems in 24 hours and providing help in getting manpower. However, the picture was reversed in the other states.
Bhattacharya suggested that the government should replicate what it did with the passport system. They should make the process transparent, non-hierarchical and predictable and urged states to come forward for a common dialogue between CII, states and the Centre. Instead of making a marketing pitch for the state, they should work on single-window approvals, Bhattacharya suggested.
Kalyani said that in the next few years, Indian companies will start to send a lot of people outside to run factories across the world as these places deal with talent shortages. He is seeing a new wave of digital talent pool creation in the country and believes that this talent would not only serve the Indian manufacturing industry but also outside India.