:00:07. > :00:12.On Monday, it is Budget Day here in India, and business leaders will be
:00:13. > :00:17.watching carefully for any announcements which could help them.
:00:18. > :00:21.This is a country which is notoriously difficult to operate in.
:00:22. > :00:29.Has the Narendra Modi government delivered on its promise to make
:00:30. > :00:33.things easier? That is what we are discussing on this week's Talking
:00:34. > :00:59.Business. Welcome to Talking Business in
:01:00. > :01:04.Delhi. I am Yogita Limaye. India is renowned for its red tape. It takes
:01:05. > :01:07.an average of 29 days to open a company and firms have to comply
:01:08. > :01:13.with 33 different tax procedures. Then they have to deal with 29
:01:14. > :01:21.different states all with different rules on land purchase, employment
:01:22. > :01:23.and the environment. But things do seem to be improving slightly. In
:01:24. > :01:30.2014 India was ranked 142 in the ease of doing business index. By
:01:31. > :01:39.2015 it had moved up 12 places. There is still a long way to go but
:01:40. > :01:47.have things become easier? We have a panel of experts. One of the leading
:01:48. > :01:53.media platforms, the managing director of a pharmacy firm and the
:01:54. > :01:57.managing director of Dixon technologies which has some of the
:01:58. > :02:00.contracts with some of the best known technology firms across the
:02:01. > :02:06.world. Right at the outset, I'm going to ask you have it become
:02:07. > :02:08.easier to do business in India? Entrepreneurship has become a matter
:02:09. > :02:33.of pride. If you months ago people
:02:34. > :02:36.would wonder that probably these boys could not get a job, that is
:02:37. > :02:39.why they are making a company. Now people from the top colleges are
:02:40. > :02:42.starting companies. That is the big change which has happened. India was
:02:43. > :02:45.of a complex place to do business in. We have and added a huge number
:02:46. > :02:48.of rules. A lot of that dismantling has started happening and India has
:02:49. > :02:51.definitely become a far easier place but this is definitely still a work
:02:52. > :02:56.in progress. I have seen the winds change and I'm sure things will
:02:57. > :02:58.change a lot more. 2014 was not the best period to run a business but
:02:59. > :03:28.the winds of change are coming now. This, once
:03:29. > :03:30.they come to the ground level, will make a lot of difference to this
:03:31. > :03:32.country. If you talk about our sector which we recently got into,
:03:33. > :03:35.India is one of the fastest-growing markets for smartphones in the
:03:36. > :03:38.world. We consume almost 17 million phones a month. In the coming years
:03:39. > :03:40.we will be manufacturing 70% of what they can do in India. This tells you
:03:41. > :03:43.about the change that is happening in the country. You are the man
:03:44. > :03:46.behind the make in India and start-up campaigns, what is the one
:03:47. > :03:52.biggest difference this government has made since it came to power? The
:03:53. > :03:57.government is clear that Indian entrepreneurs must be allowed to
:03:58. > :04:00.fly. We must make India one of the easiest places and simplest places
:04:01. > :04:06.to do business. This would mean that you just as Mantel a lot of
:04:07. > :04:10.procedure, rules and regulations down the line and from the 1st of
:04:11. > :04:14.April, we will be putting out a mobile app which will allow all
:04:15. > :04:19.smart ups to do their registration in just one single day, across five
:04:20. > :04:25.different departments through this mobile app. I think the government
:04:26. > :04:30.is broke clear that Indian start-ups must grow and flourish. As we go
:04:31. > :04:34.along, this would mean that departments across sectors must
:04:35. > :04:38.become simpler, they must convert, they must integrate, they must work
:04:39. > :04:44.together, to ensure the entrepreneurship of India will grow.
:04:45. > :04:48.You said you have seen the winds of change but you have not really seen
:04:49. > :04:56.change on the ground as yet, what are the difficulties you face? Today
:04:57. > :05:00.for example, if I upload a tax form, sometimes uploading does not take
:05:01. > :05:04.place, sometimes there are problems. There is still the contact between
:05:05. > :05:10.the person who has uploaded the form and the tax office. I'm not just
:05:11. > :05:20.talking about the tax, if a notice is served online, the responses go
:05:21. > :05:25.online to the department concerned, so it becomes a response which is
:05:26. > :05:29.not answered by one ticket a person. It is not a visibility factor, it
:05:30. > :05:33.becomes a clear-cut answer you giving. There is not one person who
:05:34. > :05:36.will take care of your case, and then there is corruption. That
:05:37. > :05:43.corruption at grassroots level has two disappear for a country to
:05:44. > :05:47.become a smooth place to work. One of the findings of the World Bank is
:05:48. > :05:51.in India you have to comply with 33 different tax procedures, how big a
:05:52. > :05:57.difficulty is that? No doubt it is difficult for someone
:05:58. > :06:03.to understand India's tax structure, it is very complex. But I think that
:06:04. > :06:06.will change now. We have the goods and services tax coming in so that
:06:07. > :06:12.will take weight factors which are in the system right now. You have
:06:13. > :06:16.talked about how there are several start-ups which started up here and
:06:17. > :06:25.moved away. Your company has chosen to remain. Why have start-ups moved
:06:26. > :06:28.out of India? I think traditionally raising capital as an Indian company
:06:29. > :06:33.was quite cumbersome. I don't think it has eased yet, but what has
:06:34. > :06:36.changed is because the whole perception of India has changed, I
:06:37. > :06:42.just came back from a trip abroad where I met a lot of investors,
:06:43. > :06:49.large global pension funds etc, and there is so much euphoria, positive
:06:50. > :06:53.euphoria around India that now investors don't bother whether you
:06:54. > :06:59.are a Singaporean corporate Indian company or an Indian incorporated
:07:00. > :07:04.company because they want to be part of the story. India is a very large
:07:05. > :07:10.country. It is bigger than 24 countries of Europe. You have to
:07:11. > :07:16.work in partnership with the states. Much of the action in reality is
:07:17. > :07:22.shifted to the States. How do you meet the states' change. Every
:07:23. > :07:25.single state of India, whether it is good to rats or tunnel now do, they
:07:26. > :07:33.are all becoming simpler places to do business. -- which are wrapped.
:07:34. > :07:37.When you start a large company, the mindsets have changed that higher
:07:38. > :07:42.levels and the tripping down effect has started. It will take another
:07:43. > :07:47.two to three years to spread this whole revolutionary change. We are
:07:48. > :07:52.in this climate of global economic gloom and India is seen as a bright
:07:53. > :07:56.spot, you think if it takes long to get all of these things actually
:07:57. > :08:01.moving, that it will lose the great opportunity it has at the moment? I
:08:02. > :08:06.think over the next five years, India will emerge as a global hub
:08:07. > :08:16.for manufacturing, not only for India but for exporting to the
:08:17. > :08:21.world. What we are lacking today is an ecosystem because we import a lot
:08:22. > :08:23.of components from China. If you are importing your components, the
:08:24. > :08:27.question is, why is there are not a strong robust component ecosystem in
:08:28. > :08:29.place? I think one of the reasons is it is very difficult for a new
:08:30. > :08:53.entrepreneur to come in and start a business, because of the
:08:54. > :08:56.huge acquisition of land building. If someone was to set up a factory
:08:57. > :08:59.of 300 square feet, it would cost around two to set it up. We don't
:09:00. > :09:02.expect a new entrepreneur to come in and put in that kind of capital. You
:09:03. > :09:04.have seen a lot of tech start-ups. How many are in the manufacturing
:09:05. > :09:09.space where people have put together a man of factoring facility? We have
:09:10. > :09:12.seen a huge number of incubation centres and creating research parks
:09:13. > :09:17.all over the country so students become the innovators of tomorrow
:09:18. > :09:21.and that in my mind is the industrial Academy linkage and
:09:22. > :09:24.bringing that into sharp play in the days to come. Is that what you are
:09:25. > :09:28.seeing when you see young entrepreneurs of today, are they
:09:29. > :09:37.veering towards a tech start-up which might be simpler in our
:09:38. > :09:40.country than in manufacturing? No start-up is simple. I don't agree it
:09:41. > :09:45.is only tech where we are seeing entrepreneurial spirit. I'm seeing
:09:46. > :09:48.many companies in the area of robotics, consumer packaged goods
:09:49. > :09:52.etc where manufacturing is starting in India. The entrepreneurs feel
:09:53. > :10:00.there is a great competitive advantage because we are technology
:10:01. > :10:02.first into manufacturing, so they're not thinking only about importing
:10:03. > :10:05.machines, they are thinking about innovating and manufacturing. You
:10:06. > :10:11.mentioned the goods and services tax. The government set a deadline
:10:12. > :10:15.of 1st of April this year for it to roll out. The bill has not cleared
:10:16. > :10:19.Parliament so it does not look like that deadline is something they will
:10:20. > :10:25.meet. If that is appointing for you? The number of taxes we have to pay
:10:26. > :10:29.and the funds, you have consultants for practically every taxed or you
:10:30. > :10:33.have in place. You need to cut out all that. You need to make it into a
:10:34. > :10:42.simple form and we are waiting for that to happen. Right now, some
:10:43. > :10:50.states have very arbitrary taxation for goods coming into the state. A
:10:51. > :10:55.seller in a particular area, say Gujerat wants to sell something to
:10:56. > :11:01.Kerala, that needs to go away so there is free and fair commerce
:11:02. > :11:04.between all the states. We have talked about bureaucracy and red
:11:05. > :11:11.tape, we are also going to talk about the other things which this is
:11:12. > :11:16.Miss needs to flourish. -- businesses need to flourish. First,
:11:17. > :11:31.this is a look at what businesses need from government.
:11:32. > :11:34.Promising a business friendly environment, for once I would like
:11:35. > :11:36.to see a politician get tough on business and the causes of business,
:11:37. > :11:39.but that will never happen. Has one set of promises been kept? India
:11:40. > :11:45.became the fastest growing big economy in the world. India has vast
:11:46. > :11:48.untapped potential. If it goes according to plan, it will be
:11:49. > :11:56.growing at upwards of 5% out to 2050. Is this Prime Minister
:11:57. > :12:02.Narendra Modi's doing? He has been travelling the world asking large
:12:03. > :12:07.companies to come and make in India. The government has launched
:12:08. > :12:11.initiatives such as making India to stimulate investment and
:12:12. > :12:16.manufacturing. But how can we hold politicians to their promises or
:12:17. > :12:27.measured them. If it was a business promise you might ask businesses to
:12:28. > :12:30.do a pipeline calculation. You might say we have this calculation and the
:12:31. > :12:36.value is this. In theory, you could do the same with business promises.
:12:37. > :12:40.But that presupposes that politicians have any influence on
:12:41. > :12:48.what happens in business. Streamlining is the name of the
:12:49. > :12:57.game. Lets come at it from another angle. If you could stretch of
:12:58. > :13:00.imagination and imagine that I am a successful businessman, what is it
:13:01. > :13:02.you would want to make a business friendly environment? Business
:13:03. > :13:05.leaders want the same thing. They want stability and policy, they want
:13:06. > :13:10.stability in what to expect from the politicians. They want to know that
:13:11. > :13:17.if they have not told that tax rates will be stable or will be
:13:18. > :13:20.increasing, that that will happen. They want stability in the
:13:21. > :13:30.macroeconomy environment. To make it easy on the politicians, let's do it
:13:31. > :13:35.in a language they understand, slogans and acronyms since. Thrive
:13:36. > :13:41.is an acronym to make me feel welcome in a business environment.
:13:42. > :13:50.The T stands for taxes. H for hidden or stop hide your low taxes. We had
:13:51. > :13:55.a lot of complicated but OK arrangements. R is for relax it. I
:13:56. > :13:59.is for investment, invest in the infrastructure that will bring the
:14:00. > :14:05.great jobs to your country a little bit easier. At the airport, why
:14:06. > :14:10.can't my plane land very near to where my taxi takes off? V is for
:14:11. > :14:23.visa. Don't make it so hard for me to get one.
:14:24. > :14:35.Finally, e-fit for exit strategy. If things do not work out, don't
:14:36. > :19:13.make it hard This will radically change this. It
:19:14. > :19:23.will bring down the costs to one tenth of what it was. We import
:19:24. > :19:31.components from China will stop the cost has come down from 1500 to we
:19:32. > :19:38.will bring the container from purport to my factory. It costs me
:19:39. > :19:45.almost $2000. I have to bring the container in and export the product.
:19:46. > :19:52.Another $2000 to the cost. How can I compete if I have to pay that kind
:19:53. > :19:56.of cost? You cannot open a newspaper in India without reading about
:19:57. > :20:04.millions of dollars of investment coming into Indian start-ups. Is it
:20:05. > :20:08.easy to get funding? 3 billion, $4 billion came into start-ups. The
:20:09. > :20:15.trend will only move in the right direction. The big reason for that,
:20:16. > :20:19.we will have a billion internet users in the near future. Every
:20:20. > :20:24.investor in the world wants access to companies that are solving
:20:25. > :20:30.problems profitably for these billion internet users. We are the
:20:31. > :20:40.largest large front here in the world. In India, financial charges
:20:41. > :20:44.are really high. We need to work on that. If I am competing with a
:20:45. > :20:52.company that is working on LIBOR wrote all over the world, and I am
:20:53. > :20:56.paying an additional 6%, 7%, something is going on. One simple
:20:57. > :21:03.example, one year we went through massive loss. Even our company went
:21:04. > :21:10.into a loss. That year, the turnover of my company was around 20 million
:21:11. > :21:19.US. The financial charges I paid 20 million US. I am justified in what I
:21:20. > :21:26.am saying. I paid to the bank much more. It was loss-making, that year
:21:27. > :21:31.was loss-making. I paid a lot more. I would say to the people who are
:21:32. > :21:34.exporting, there is a level playing field for the two companies who are
:21:35. > :21:44.manufacturing in India for India, there is a bit of a problem. We
:21:45. > :21:51.supply boxes. When we are giving them credit, we are borrowing at a
:21:52. > :21:54.much higher cost. In China and any other country, they are paying in
:21:55. > :22:01.dollars. One solution is the banks must offer the buyers credit in US
:22:02. > :22:05.dollars to all the companies. Very few companies have access to the
:22:06. > :22:11.facility right now. Is that something the Government can help
:22:12. > :22:16.with? The Government is constantly looks at policy measures. In the
:22:17. > :22:21.electronics sector, we have taken a number of currency measures. We must
:22:22. > :22:28.understand that India is part of a globalised world, an integral part
:22:29. > :22:36.of a globalised supply chain. I's manufacturing must become extremely
:22:37. > :22:42.cost competitive. -- India. Total productivity must rise you cannot
:22:43. > :22:48.keep subsidising this. On that note, thank you for joining us. That
:22:49. > :22:54.brings us to the end of this edition from daily and indeed the series. We
:22:55. > :23:00.will be back soon. Bye-bye. -- from Delhi.
:23:01. > :23:07.Time to talk about the weather. A cloudy day across the UK. A
:23:08. > :23:08.beautiful day in the