The friction in the system is not caused by big things but by a myriad of small ones and streamlining these is “what I call process reforms", Sanjeev Sanyal, a member of the Prime Minister’s economic advisory council, has told Moneycontrol in an interview.
These process reforms are very important and can be of various kinds, Sanyal said, adding usually newspaper headlines' focus mainly on structural reforms, such as GST, Insolvency and Bankruptcy Code (IBC), inflation targeting etc.
"Now, we can do some more of those things but the bulk of what really causes friction in the system is not these big things. It's actually a myriad of small things. So, you have to really sit in there and do these things, which I call process reforms," Sanyal noted.
Government processes — law, regulation, administrative steps— all can be "smoothened out". "Then we also need to go and look at the structure of the government itself, like the central government. There are all kinds of bodies in the government. Are these bodies needed? Are there outdated bodies you can shut down? Is the distribution of civil servants correct for today's needs? So, all of these kinds of things are important parts of process reforms of the system or reforms of government architecture," Sanyal said.
Watch the full interview here
A committee led by former cabinet secretary Rajiv Gauba, who is now a member of Niti Aayog, will look at some of the deregulation part of it. “So, process reform is a big area. It's a general word. There is the space for deregulation. So particularly for business, that bit he is looking at," Sanyal said.
"Then there are a whole host of other things, ease of living type issues. I'll give you one example. For example, EPFO. I have made quite a big fuss about it and I hear the labour ministry is now working to sort that out."
In the last year, EPFO has removed the requirement of employer’s approval for seeding bank account details with UAN. It has simplified the transfer process, enhanced auto claim settlement limit from Rs 1 Lakh to Rs 5 lakh.
The UAN Activation via UMANG App using Facial Authentication Technology (FAT) has enabled seamless access to EPFO services like passbook viewing, KYC Update and claim submission. And Centralised Pension Payment System (CPSS) has been implemented from January 2025.
On the Investor Education and Protection Fund Authority (IEPFA), Sanyal said he is working with the Ministry of Corporate Affairs (MCA) to smoothen the process of receiving the rightful shares.
"That fund has got something almost like a lakh crore worth of shares lying there. And they get about Rs 8,000 crores worth of shares of dividends coming in new, plus new stuff gets piled on to it. So, its corpus is growing but they are only able to give back in any year about Rs 2,000-3,000 crores worth only.
“So, I looked into the matter and this is what I discovered. First of all the system has three different websites. One website where the claimant puts their stuff in. Once all the approvals go, there are two separate websites. One for giving their money back and the other for giving the dividends back, which is a separate website altogether. And they don't talk to each other," Sanyal said.
The officials have to manually take all the information from one, put it in the other to give the share back. “So, then I mapped the entire process and I discovered that the whole process from the point you put in your application to the point you get your money is 25 steps. If on the 24th step you make a mistake You go back to step one. So, it's like snakes and ladders, except it doesn't have ladders," said the EAC-PM Member.
"I'm working right now with the Ministry of Corporate Affairs and smoothening this out. By end of this year… three websites will get integrated.” The 25 steps would first be brought down to 15 and then ultimately to maybe single digits, he said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
