Ease of doing business: PMO acts as BMC fails test

MUMBAI: The PMO, unhappy with the progress made by BMC in the ease of doing business, has come down heavily on the richest civic body in Asia. Last month, the PMO summoned Maharashtra chief secretary and the BMC commissioner to Delhi to discuss the reforms initiated by the civic body and further simplify some procedures.

The meeting comes in the wake of the World Bank’s perception survey which said that some of BMC’s crucial reforms remained only on paper as developers complained that they still needed to pay bribes to get their projects cleared.

The World Bank findings were enough to fire up the PMO which summoned the Brihanmumbai Municipal Commissioner Ajoy Mehta along with the Maharashtra chief secretary Sumit Mullick, where Mehta made a presentation on the reforms done by the civic body. Mullik admitted that they made a presentation but claimed that the PMO was happy with the work done by the BMC.


The seriousness with which the PMO has taken up the issue can be gauged from the fact that that additional secretary of the Department of Industrial Policy and Promotion (DIPP) Shailendra Singh had shot off a letter to the Maharashtra chief secretary a few days before the February 21 meeting.

The strongly worded letter says, “departments/agencies found it convenient to blame respondents and World Bank findings, without evaluating the system… However, the feedback from respondents indicated that there were significant gaps in actual practice as users reported that they continue to follow old processes.” The DIPP even wanted the BMC to get developers on board to simplify the procedures.

The World Bank takes two cities – Mumbai and Delhi -- as a benchmark to measure ease of doing business in the entire country. The BMC had initiated a number of reforms for faster clearances of building permits in the past two years, but the World Bank’s perception survey threw up a different picture; that they still have to pay bribes to get clearances. Also, businessmen alleged that starting a business also requires running behind officials and exchanging money.

ET spoke to several developers who said that the situation hadn’t changed much even after the reforms. “What reforms are they talking about? Nothing has changed, we are giving the same amount of money and it takes the same time to get clearances,” said a developer from Central Mumbai who didn’t want to be identified.

Another developer said civic officials were turning the whole issue of ease of doing business into a ‘joke’. “Earlier, we used to submit our plans in the form of a hard copy to the sub-engineer in the building proposals department and then grease his palms to move the file forward. Under the new rules, the civic body said that we can file our permission online and that our file would be processed by the assistant engineer,” said the developer.

“We tried the new system and submitted directly to the Assistant Engineer, but the file was held up by officials citing several reasons. We realized that the message that was being sent out was paying a bribe to the sub engineer and above. We do not know who the World Bank spoke to, but every developer has to pay bribes,” said a developer from the western suburbs.

Another developer said that they still needed to pay bribes for fire safety clearances.

Officials said that the Centre was miffed with BMC’s performance because the World Bank had ranked India low on starting a business (156) and construction permits (181), even when the overall rankings of India had improved to 100 from 150.

Sources said that in the PMO called the meeting as they believed that the target of India joining the top 50 countries when it comes to ease of doing business wasn’t achievable at the rate things were moving.

The BMC has now taken steps to further streamline the process.