Monday, July 13, 2020

Not easy, either for them or for us.

Inviting foreign businesses to invest in India, Prime Minister Narendra Modi "flagged the dramatic improvement India has managed in the World Bank's ease-of-doing-business rankings," wrote Anil Padmanabhan. What Modi forgot to mention was that, "In the 2020 report, while India has an impressive overall rank of 63, its rank in setting up a new business is an abysmal 129 out of 190 countries!" "A subsidiary company of TeamLease, which maintains a database on government regulations, estimates that, at present, companies have to annually adhere to 69,233 compliances and 6,618 filings and intimations." Regulations are the basis of India's crony capitalism wherein it is more important to pay homage to politicians and civil servants than improve productivity or provide the best for customers. And the implicit threat of regulatory punishment is a great stimulus to raise election funding. "To take business reforms to states, the industry department has been ranking states starting 2016 on the basis of regulatory compliance requirements," wrote Asit Ranjan Misra and Jayshree P Upadhyay. "India has started trade talks with the European Union (EU) and is open to dialogue with the United Kingdom for a free trade agreement, commerce and industry minister Piyush Goyal said on Saturday." "India currently has no trade deal with the EU. Trade talks between the two regions stalled in 2013." The government has woken up to the importance of a trade deal with the EU after it signed a free trade deal (FTA) with Vietnam recently. Following trade tensions with the US, out of 56 companies shifting production out of China, "only 3 of these relocated to India while 26 went to Vietnam, 11 to Taiwan, and eight to Thailand", according to a study by Nomura Group. Clearly, foreigners are not convinced about how easy India is. The EU wants deep cuts in tariffs on cars and wines, but these are major sources of revenue for states which have been hit very hard by the lockdown due to the coronavirus. The government is to introduce new rules to force e-commerce companies to hand over data on users. "E-commerce companies will be required to make data available to the government within 72 hours, which could include information related to national security, taxation, and law and order, it said." Google is planning to invest $10 billion in India over the next 5-7 years. Google provides free service to customers and is to pay an 'equalization tax' on profits it makes from advertising revenue. Surely, the government should pay Google for the data it collects. Amazon is a platform for sale of goods and streaming videos of music and movies. Why do politicians and civil servants want to know what we are buying and what movies we watch? These companies collect data for targeted advertising but the government wants data for surveillance and control of citizens. Sinister.    

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