Low ease of doing business in Manipur
Need for better institutional parenting for 272 Start-ups
Manipur finds itself in the 31st position out of 36 states and union territories in the national ranking of Ease-of-Doing Business announced by Smt. Nirmala Sitaraman, Honourable Finance Minister of India on the last 5th of September. The message is clear that Manipur is one of the bad performers in the country. We have to accept the uneasy position,-perhaps, highly discouraging one, - as our own creation of overlooked concerns, unattended tensions and neglected symptoms. We could not pay proper attention to Early Warnings, Timely Analysis and Appropriate Interventions. Interestingly the state government is heavily busy with day-to-day engagements with very negligible time being left for Long Term Reforms.
Perhaps we fail to build a productive society where firms can operate their commercial engagements without any damaging interference, develop better ways of organising production-process, distribution of goods and services and respond to emerging challenges. The headache of dealing with series of Improper Payments such as “forced donations”, “coercive collections”; and open Extortions on National Highways, cripples the rare impulses of business-world in the state. We are killing the golden goose. A wise society knows the meaning of Peace Dividend. No one wants to invest at the cost of his life.
What we need in Manipur is continuity with change; not continuity without substantial change. The investment at the moment is not free from the threat of Militant Conservation with the result that to-day Manipur is a LAND OF family farms, micro-enterprises and household business even after 68 years of so-called economic planning in the country. We should remember that growth cannot be created overnight. It evolves and passes through a number of difficult stages and challenges.
What we need is a vibrant state, strong, peaceful and ready to engage with the rest of the world. To our utter surprise, Manipur is a subject of study, an object of references and a classic example of backwardness caught in the deep rut of traditional world. The state needs change of both Gear and Guard.
One of the basic reasons why Manipur has been categorised as one of the backward states is visible lack of better investment climate. The efficient marketing infrastructures in the congenial atmosphere are critical and key to induced investment. The state government has to ensure efficient marketing infrastructures to attract larger investment.
A good investment climate attracts more investment by removing unjustified costs, unjustified risks and unjustified barriers to competition. The competitive firms can now develop, adapt and adopt better ways of doing things.
As a matter of practical necessity, the state government should ensure standard public goods, support to the provision of particular set of infrastructure and address market failure. Stability and security, regulation and certainty in fiscal sector, sound finance and responsive labour market are some of the core areas of responsibilities of the government. The introduction of GST is an attempt to ensure long-term stability in the behaviour of prices. “Improving policy-predictability can increase the likelihood of new investment by more than 30 percent” (World Bank, 2005).
Position of India is encouraging. As a result of various reforms by Narendra Modi government, India has moved to the 63rd position from 77th position in previous ranking. The Business Reform Action Plan (BRAP), 2019 contains 80 reforms recommended by the Department of Industrial Policy and Promotion (DIPP), Government of India in the broad areas of Starting a Business, Regulation of Business dealing with Contract Permit, Getting Electricity, Registering Property, Getting Credit, Protecting Minority Investors, Paying Taxes, Trading across Borders and Solving Insolvency. It is all about the quality of government and policy making. It is all about Good Governance, Sound Policy Planning and Effective Implementation. It is all about the political will. It is not a surprise that Andhra Pradesh, whose hallmark is good governance, stands first in 2017 and 2019 consecutively. As a result, investment by private entrepreneurs is exceedingly high.
The quality of Institutional Parenting of the government could be a necessary factor for the better performance of 272 Start Ups. It may be too early for young entrepreneurs to be left alone in this age of cut-throat competition. They are going to operate in the pre-industrial era of the state where they have to face the twin problems of market failure and professional backwardness. Let them, now, feel protected and promoted in the new creative atmosphere of good governance. The issue is about the new responsibility of the government of Manipur to ensure the institutional parenting.
A time has come for the NDA Government led by Shri N. Biren Singh to examine critically the areas of weaknesses and identify the areas of strength to improve our position within a specific time frame. Any sensible move should be consciously guided by what the Honourable Prime Minister, Shri Narendra Modi says “Reform, Perform and Transform”. The full body of State Planning Board which should act as State NITI Aayog, may be tasked to prepare the plan of reforms for enriching the Ease of Doing Business in the state. Investment friendly atmosphere is sine-qua-non for competitive growth. Delay may be dangerous. To-day Manipur needs a strong political will for Reform Plan.
Dr Singh, the writer, was Professor of Economics, Manipur University.