THE BUREAUCRATIC SUPREMACY IN KERALA

An article that appeared today in the supplement of the vernacular Malayala Manorama on the industrial friendliness of Cochin had prompted me to post this mail. It says that as per the World Bank report “Doing business in India - 2009”, Cochin enjoys 16th position on industrial friendliness among 17 Indian cities cited in it. It is no surprise that Kolkotta comes last.

The primary reason attributed to Cochin coming among the last of the cities reviewed, is the bureaucratic supremacy. The report says that it would take minimum 41 days to complete the preliminary formalities of starting an industry in Cochin where as it is less than 30 days for the big cities such as Mumbai & Delhi. It goes on to say that it would take 224 days to actually start an industry in Cochin. The World Bank report is also critical about the taxation situation of Cochin. Notwithstanding the fact that IT helps to expedite the delays, Cochin’s utilization of IT in its industrialization front is very poor, the report points out. All these are due to the bureaucratic delays and their lack of empathy on industries and industrialists.

I had always maintained that it is due to the bureaucrats that industries are not coming up in Cochin & Kerala. Here in Kerala, unless and until proved otherwise, an industrialist or a businessman is a tax evader, a labor exploiter and a profiteering criminal. The bureaucrats never look at the industrialist and businessman as job provider, tax payer and wealth creator & distributor. In no part of the country and world have I seen such negative attitude from the part of the bureaucrats and government servants. One doesn’t relish meeting them and if ever he does it, his experience would be nothing to write home about. I write it with my personal experience. Once to a senior IAS officer of the government I pointed this fact and I got a retort from him “Who wanted you here? We didn’t ask you to invest here”.

A year back during a function at Kerala Management Association, the finance minister of Kerala, while inaugurating the same made a blanket statement that so many businessmen are evading tax in Kerala and he is here to catch them. Whatever is the element of truth in his statement, at least one expected him to be moderate in his views. Such statements do not encourage any prospective businessmen to invest in Kerala. With the implementation of VAT, and with the impending Good and service tax to become effective, the opportunity of those businessmen to evade tax would be very minimal. While I hope that those businessmen would behave, one also expects ministers & bureaucrats to maintain the decorum. It is time we all behaved well.

It has been proven beyond doubt that the mainstay of economic prosperity is entrepreneurship. For entrepreneurship to thrive, the State must be industry friendly. This calls for tremendous levels of behavioral change from the executives and bureaucrats of the State. These fundamentals are not going to change. What is required to be changed is the attitude and mindset?

The sooner it is, the better.