Bloomberg/New Delhi

At first glance, it’s hard to see how Indian Prime Minister Narendra Modi is making life easier for entrepreneurs like Arjun Kohli.
His Ayurvedic dietary supplements factory on Mumbai’s outskirts has no power for one day a week, and the maze of levies and duties – including an excise tax on plants he imports from other states – is as time-consuming as ever. Yet subtle changes are in the air: Kohli can now go online to seek licences for many of his new products. Import rules for some of the raw materials he needs have been loosened. He also heard – though has not yet seen – that the government is paring back its many inspections.
“There is a sense that things are moving for the better,” Kohli, also a part-time dentist, said in an interview in Mumbai.
“We have to give them time.”  With a string of small measures, Modi is trying to improve India’s business climate while he waits for lawmakers to approve more sweeping proposals to simplify land acquisitions and tax payments. One of his immediate goals is to boost India’s position on the World Bank’s ease of doing business index, which tracks regulations and surveys experts.
“There’s definitely a lot of action and even more importantly a lot of enthusiasm,” Denis Medvedev, a World Bank economist based in New Delhi, said of Modi’s government.
“There’s quite a few more steps which would be needed in order to make investment climate significantly better.” Modi wants India in the top 50 of 189 countries on the World Bank’s list, up from 142 last year. India ranks even closer to the bottom when rated on handing out construction permits and enforcing contracts. This year’s results will be out around October.
Weak corporate earnings and Modi’s inability to push his economic proposals through parliament have eroded enthusiasm among investors who saw his victory as a turning point for India.
The benchmark S&P BSE Sensex index, one of Asia’s best performers last year, is heading toward its second straight monthly retreat. It decreased 0.9% at 9:30 am local time. The rupee, poised for its biggest monthly drop since September, fell 0.4% to 63.55 per dollar.
“At this point markets are taking a sort of reality check,” said Tirthankar Patnaik, a Mumbai-based economist at Mizuho Bank. “In terms of doing business, I’m trying to honestly think what the government is doing tangibly that would make life a little easier. It’s at the margin.” Some of the small steps Modi has taken are practical: a new centralised Web portal lets companies apply for permissions, file tax returns and pay processing fees. Non-hazardous businesses no longer need government certification. Others are more symbolic. In a little noticed move, the government last month ended a 48-year-old policy of only letting smaller companies manufacture goods like pickles, fireworks and incense. At one point, the list had more than 800 industries.
Devji Patel, who heads an association of manufacturers and dealers of agarbatties – or incense sticks – in the western state of Gujarat, wasn’t aware of the decision. He said the move will endanger the livelihood of manual workers.
“Higher investment would mean automation and mechanisation, which would mean more unemployment for such workers,” Patel said by phone.
Since taking power last May, Modi has allowed more foreign investment and implored manufacturers to open factories in India. However, several companies such as Vodafone Group are embroiled in tax spats that have hurt investor confidence.
Finance Minister Arun Jaitley rejects any notion that the government hasn’t made big reforms, telling investors in London last month there has been “a flurry of activities.” “We need to ease the process of doing business in India and therefore slowly we are introducing changes in that direction,” he said.
For Kohli, the supplement maker, the big change he’s looking for is a goods-and-services tax that would unify the country into a single market for the first time. Lawmakers plan to discuss the bill during the current parliamentary session.
“That will make things very simple,” he said. “That will save my energy and time.”