SHAPING THE

COMFORT OF DOING BUSINESS According to the World Bank’s ‘Doing Business 2014’ report, India is ranked 134 out of 189 countries in the overall ease of doing business India lower than the other BRICS (Brazil, Russia, India, China and South Africa) members and highlights its relatively dismal performance It is a known fact that many entrepreneurs find it extremely difficult to set up their manufacturing enterprise due to the stifling regulatory environment and procedural hurdles

UNCERTAIN TAXATION ENVIRONMENT The nation’s taxation policy too can play a key role in boosting its manufacturing sector The fear of an uncertain tax regime is the most frightful scenario wherein the manufacturer feels dissuaded from investing into setting up new manufacturing facilities or units India must not only ensure stable tax regime but aggressively view tax policy not merely as a tool to generate revenues, but a key component of its overall economic policy which could boost manufacturing activity

TOUGH LAND ACQUISITION The Land Acquisition Bill, which was passed during the previous UPA regime sought to set a fair compensation for farmland being taken over for industrial projects land acquisition difficult and the process hugely complex while slowing the setting up of new industrial projects Without adequate land, new manufacturing units simply cannot come up

UNFAVORABLE GOVERNMENTAL POLICIES Favorable governmental polices and incentives are a norm world over to boost local industry to increase manufacturing output Since the last many decades the industry has had to face unfavorable policies that do little to boost local manufacturing It is because of being continuously ignored by successive governments that the share of manufacturing sector in India’s GDP has remained static at about 16 per cent for over 30 years now

INADEQUATE INFRASTRUCTURE India suffers from inadequate infrastructure facilities such as poor power supply at higher rates vis-à-vis China, awful logistics facilities and pathetic transportation infrastructure Without adequate supporting infrastructure, it becomes difficult for Indian manufacturers to compete with their global counterparts on price while maintaining high quality benchmarks It is therefore important that adequate supporting infrastructure be created to ensure success of local manufacturing

LOOKING AHEAD India’s manufacturing sector grew at its fastest pace in two years in December 2014 India Purchasing Managers’ Index (PMI) — a composite gauge designed to give a single-figure snapshot of manufacturing business conditions — stood at 54.5 in December, up from 53.3 This clearly indicates that the recent governmental initiatives have begun to show positive results