After more than a decade as an IAS officer in Andhra Pradesh, Rajat Kumar went to Harvard to complete his Masters in International Development.

Kumar returned recently to take over as director of the Department of Industrial Policy and Promotion (DIPP), a key department of the Union Commerce Ministry that facilitates the streamlining of the Indian business environment through policy reforms.

Big projects of foreign investors seem to be running into trouble in West Bengal, especially after the opposition to the land acquisition.
The outlook of the state government towards industrialisation has been quite encouraging. Jute industry is faring well, Kharagpur is a prominent engineering hub, and there have been reforms in the areas of IT, retail and real estate.

Land acquisition is not West Bengal’s problem alone. It is a pan-Indian and global problem, faced even by developed markets such as the US, Japan and Europe.

What needs to be done to overcome the land issues?
Thomas Friedman in his book “The Lexus and the Olive Tree” had taken the Lexus as the ultimate symbol of successful capitalism, while the olive tree is as intrinsic to the Mediterranean society as the tulsi or peepal are to Indians. The olive tree is a source of sustenance and invokes deep sentiments. It signifies the hold that land has on rural folk. Therefore, there is a need to simplify the process of land acquisition augmented by a comprehensive relief and rehabilitation package.

FDI in India has increased phenomenally from 2.2 billion $ in 2003 to 25.2 billion $ in 2007. What are the implications?
An Increase in FDI means we have better foreign currency reserves, which facilitate extension of subsidies to the energy sector, especially when we are largely dependent on crude imports.

FDI also brings in good technology, state-of-the-art practices and integration with the global markets.

The report of the World Bank ranks India very low as far as ease of doing business is concerned.
Well, their latest report was from the South Asia perspective and was based from Mumbai. I had sent them a 20-page reply explaining why their study is not totally accurate. It is their report and a tool for us to use. Now, they’re going to rank 17 Indian cities, including Kolkata.

Once this comes out at the end of this year, it would give an opportunity to cities to compare themselves with others and adopt successful business practices.

What steps are required to check the rampant corruption and improve the business environment?
First of all, procedural requirements for starting a business must be made simpler. The volume of corruption is directly proportional to the number of procedures. There is also the need to regulate monopolistic practices, check environmental pollution, protect the rights of workers and citizens and prevent the distortion of prices.

Though India ranked among the top 20 countries, who have undertaken reforms in 2008, major reforms are still needed.

These relate to enforcement of contracts, reducing the time and (legal) cost of enforcing contracts, and simplifying the procedure and reducing the time taken to close down a bankrupt business.

The DIPP is emerging as the most important agency for ushering in business reforms. How has its role changed in the recent past?
Reforms were initiated only in 1991, although these could have been taken up a decade earlier. There is now a Committee of Secretaries (CoS) to look into policy matters, comprising secretaries from nine ministries. Chief secretaries of each state have been requested to get in touch with the World Bank team that is conducting the survey on doing business in India.