Ease of doing business is still a goal faraway in Goa
The resignation of Vishal Prakash, the chief executive officer of the Goa Investment Promotion and Facilitation Board, commonly known as IPB, is a setback for the state’s plan to attract investments and create jobs. Instability in IPB adds to the long list of negatives in the environment that have been the cause of lack of success in attracting investments. In his letter of resignation addressed to Chief Minister Pramod Sawant, who is also IPB chairman, Prakash has blamed ‘red-tapism’ prevalent in the functioning of the state administration for poor progress. He said he wanted to use his expertise and skill sets to bring about a change in the functioning of IPB in order to attract investments to the state but was bogged down by excessive regulations and rigid conformity to formal rules about which business houses had been complaining for a long time.
Prakash was not a civil servant. Had he been one he would not have dared to write the kind of letter he wrote to the Chief Minister. Surely, a civil servant would not have resigned in the first place, because postings and transfers of civil servants are beyond their powers. Prakash was bold enough to point out the reasons why he had to quit as he was from the private sector – a former JP Morgan and Standard Chartered executive. He took over as the CEO of IPB in August 2018. To make his assignment even personally frustrating for him he had not been paid his salary since January.
The IPB came into being in 2016 and was given the task of attracting investments of Rs 25,000 crore that were expected to create 50,000 jobs over five years. However, three years down the line only investments of less than Rs 1,400 crore in all were approved and recommended by IPB. These investments were to be made by 179 projects – which came to an average of Rs 7.8 crore per project– that were expected to create a few thousand jobs. At a time when employment opportunities have shrunk in the state owing to mining shutdown and slowdown in major sectors such as hospitality Goa needed big investments to create jobs. However, the government did not bother to remove the obstacles in the way of making the investment climate hospitable.
Vishal Prakash was the second chief executive officer. With his resignation the government has to find another CEO to run IPB. The search for a CEO is not going to be easy. It is going to take some months. The frequency of change at the top of IPB is going to make any likely candidates wary. It is not without significance that Prakash’s resignation came barely a few weeks after the Chief Minister announced an IPB revamp to attract investments. Sawant promised to fine-tune the working of the board to make it a single window system for processing investment proposals. The government has been saying so for a long time but it has failed to do so. Though the board was intended to be a single window to help investors get fast approvals, the investors found that IPB was functioning as an additional window and that they had to comply with the requirements of various departments individually. Despite approval of the board, investors had to run from one department to another, which defeated the very purpose for which IPB was set up. The two CEOs in three years of IPB existence failed to change the system– in other words, failed to make Goa an attractive investment destination.
The government has kept IPB in a subordinate status which has proved detrimental to investment. Since 2017, IPB has met a few times. Rather than addressing the issues which were plaguing the functioning of IPB, the government loaded CEO Vishal Prakash with additional responsibilities. He was named head of the Startup Cell and assigned formulation of a logistics policy and an export policy. No CEO of IPB could be expected to deliver investments without offer of easier terms and smoother approvals. He could obviously not be expected to deliver them when he was foisted with additional responsibilities. Let us hope the state government does not repeat its mistakes with the new CEO.