Lack of transparency and corruption make India a difficult place for business

Lack of transparency and corruption make India a difficult place for business

Introduction
Starting a business venture in India is not easy compared to certain other nations. India has a complicated system when it comes to starting business ventures. Corruption is another huge problem confronting investors who want to make India the venue for their new companies or ventures.

Even domestic businesses face corruption at the local level. It is difficult for people to begin new ventures on Indian soil because of the lack of accountability of officials and ministers.

Kickbacks are demanded for landing any corporate project or starting a venture. It becomes difficult for businessmen to sustain their profits in the face of so many obstacles.

Viewpoint

• India is the third largest Asian economy in the world. It has immense potential and investors are often attracted by the opportunities offered by this country as well as its booming consumer market. But the slow process of administration that makes it difficult to establish businesses without giving bribes often makes entrepreneurs think twice before setting up any venture on Indian soil.

• Even established Indian companies have to resort to lobbying to get a business-friendly legislation to be passed. Big business houses are forced to think in terms of grafts and bribes because of the official machinery that functions on money exchanges for favours.

• Transparency International has placed India very low on the Corruption Perception Index. After so many years of independence, these dismal rankings represent the ineptitude of successive governments in battling evils such as bribery, money laundering and corruption. This is creating a real problem for international companies that want to collaborate with domestic firms for joint ventures. It is also causing losses to the economy and slowing down growth considerably.

• Lack of transparency in the administrative process has made it impossible for honest businessmen to have thriving and successful companies. For each new contract, massive bribes are often given to chase off competitors. Business and ethics are now being seen as contradictory to each other by many corporate personnel nowadays, as a result of the corruption and kickbacks that are rampant nowadays.

• While the upcoming general elections are being taunted as a fight against corruption, any party/parties that assume power must realize that corruption and red tapism are systemic problems and sustained reforms over a very long period of time will need to be undertaken before there is any visible improvement. Lack of transparency and constant interference has even caused Indian origin NRIs to be wary of investing in India.

• Millions of rupees are spent on paying bribes but the situation does not seem to be improving. Businesses face hurdles such as getting approval for land on which to set up the office. They are also faced with obstacles when they try to get clearance for selling certain products. Many proposed joint ventures have failed to take off due to stiff resistance from public officials and extortion demands from local criminal gangs.

Conclusion

The prevailing economic climate of uncertainty has added fuel to the fire. India is growing at an uneven pace with certain pockets and areas being deprived of basic utilities for long hours during the day.

Getting approval for setting up a business becomes more tedious due to the interference of vested parties as well. There are factions and lobbies within the public and private sector which hamper the establishment and functioning of companies in India.