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One of the policy chiefs at the US India Business Council (USIBC) presents a kind of first-hand account of India's journey towards easing up its business environment. In 2016, India moved up several places in the World Bank's 'Doing Business' Rankings. Why the quick leap In part, because of the government of India's singular, constant, and relentless focus on making India a welcome destination for Foreign Direct Investment (FDI) and for business. Prime Minister Modi started, early in his administration, with a top down approach: meeting with senior bureaucrats to convey a message that they too had to be and act friendly to business. Those US-India Business Council (USIBC) investors that regularly interacted with these bureaucrats saw a monumental shift in attitude and receptivity among Secretaries and Additional Secretaries within the government of India. Companies' meeting requests were eagerly and quickly accepted. The meetings were scheduled promptly and the officials were prepared. The tone and tenor of the meeting quickly focused on the question: “What is the investment issue and how can we fix it ” The immediate receptivity and willingness of the government of India to meet with, listen to, and work with investors to fix problems was apparent and word started to spread quickly that Modi's new government was open for business. And any senior-level bureaucrat that did not follow this mantra was quickly replaced, thereby setting a tone of “Minimum Government, Maximum Governance.” The other reason the government of India has had such success in the improvement of its World Bank east of 'Doing Business' ranking is because despite political setbacks, the government has not wavered from its mission and mandate. For example, after the electoral loss of the BJP in Bihar, the government quickly announced a slew of FDI reforms. The government of India has incrementally and periodically announced FDI reforms and measures that are intended to make business easier in India. Lastly, the reason the government of India has had success in its rankings is because the it has enacted a model that has states competing against each other, known as “Cooperative Competitive Federalism”. Whether it's the World Bank's ranking of Indian states, the Department of Industrial Policy and Promotion (DIPP)'s rankings, or the publicity surrounding the investment events held by the states, it is no secret that other states have looked to the success of the Gujarat investment model, a model created by the Prime Minister, and have now tried to replicate it. One only needs to look at the about turn of certain chief ministers to see the success of the campaign to get the states to compete against each other. Whereas you once had the chief minister of West Bengal push out automotive manufacturing in the state, she is now welcoming it. The mantra of “Cooperative Competitive Federalism” has also been reaffirmed by the NITI Aayog. The leadership of the agency, including Arvind Panagaryia and Amitabh Kant, regularly hold the proverbial state's “feet to the fire” by measuring progress and success of state level reforms. Intelligent and motivated government officials like these also deserve the credit in India's success. The state level reforms are also supported by the Modi administration's unrelenting focus to pick up greater control within the states and thereby the Rajya Sabya. This includes winning state-level elections, which would in turn result in greater control of the Rajya Sabya and an easier avenue to continue to push reforms. With Prime Minister Modi's determination, CEO-like management style, and hard work, he has managed to reinvigorate India's bureaucracy. In the months and years to come, investors are realising that India's improvement in the World Bank's 'Doing Business' ranking is a graduated improvement on a business environment that is only going to get better.
