UPSEB shows why some business leaders are not so sure about ‘ease of doing business’ in India

Power producers, as FE has reported, have rejected the offer—allowing this for one state would mean allowing it for all, and independent power producers are owed near about Rs 88,000 crore.

If the Uttar Pradesh State Electricity Board defaulting on payments to gencos was not bad enough, it is now asking private power producers to give it a discount for it to be able to pay up. This despite the fact that the state received Rs 21,000 crore under the Centre’s Rs 90,000 crore liquidity infusion to clear outstanding dues. The UP government owes Rs 17,825 crore to gencos and Rs 13,294 crore to discoms. Power producers, as FE has reported, have rejected the offer—allowing this for one state would mean allowing it for all, and independent power producers are owed near about Rs 88,000 crore. This state of affairs, however, is more than just economic pain; it shows that the ‘ease of doing business’ goal can be shelved at will by a state government—it dims investors’ perception of India’s business-friendliness.

It is just as well that business leaders have been speaking out. As per Times of India, Volkswagen India MD Gurpratap Boparai is of the belief that while it is easy to get initial clearances in the country, it gets difficult to do business afterwards. Commenting on the policy of import curbs on Chinese products, he further highlighted that India needs to have policy certainty, and policy should not be changing from one budget to another. Boparai further remarked that efforts on ‘ease of doing business’ need to incorporate day-to-day functioning as a parameter as well. While India has improved its ease of doing business ranking, a new study by Teamlease, India’s largest temping agency, showed how much red tape remains; there are 463 Acts in the case of labour that need to be followed, 17,966 compliances and 1,262 filings that need to be made.