Quest for Finding Ease in Doing Business in India

World Bank Group has a global initiative to rate countries according to parameters of doing business in those respective countries. This seems to be a simple market study, but it gives very strong and extremely impactful findings. The ‘Doing Business 2014’ data regarding India is not that glossy as we have been hearing from our policy makers. The data of this year’s report says that India is at 134^th position out of total 189 countries which are getting considered for this study. This year’s data also shows that India’s position has slipped three levels as India was rated on 131^st position in 2013.

Now, it becomes utmost important for the policy makers to actually work on changing this situation. The perception about doing business in India is not so attractive. This study also shows how much satisfaction level does our entrepreneur community posses.

Even more strange finding for Indian start-ups, this survey rates India is at 179^th position out of 189 countries with regards to the parameter of ‘Starting a Business’.

There are many reasons for this kind of positioning. Moreover, experts are brainstorming on how India can change this situation and the perception of starting any business in India. Now, in order to change the situation, Government of India is aggressively working on streamlining the business starting up process. Because it was found that any entrepreneur who wish to start any industry have to run around a lot to get licenses for doing business and the authorities are scattered all over. In this regard, there is a positive indication from the Government as it was understood that three areas must be streamlined in order to provide a better experience of starting a business. Here are the three actions on which Government of India has been focusing in order to ensure better experiences to the entrepreneur are:

Increasing the validity period of Industrial License

As a measure of ease of doing business, henceforth two extensions of two years each in the initial validity of three years of the Industrial License shall be allowed up to seven years.

Removal of stipulation of annual capacity in the Industrial License.

It has been decided to deregulate the annual capacity for defense items for Industrial License. However, the licensee shall submit half yearly production return to Department of Industrial Policy & Promotion and Department of Defence Production, Ministry of Defence in the prescribed format, to be notified separately.

Sale of Defence items to Government entities without approval of Ministry of Defence.

The Licensee shall be allowed to sell Defence items to Government entities under the control of Ministry of Home Affairs (MHA), State Governments, Public Sector Undertakings (PSUs) and other valid Defence Licensed Companies without prior approval of the Department of Defence Production (DoDP). However, for sale of the items to any other entity, the Licensee shall take prior permission from the Department of Defence Production, Ministry of Defence.

These are welcome initiatives taken up by the government but, in order to change India’s global image as a place to do business, a lot of actions are required.

 Faiz Askari is the Founder & Editor of SMEStreet, he can be reached at faiz@smestreet.in or faizaskari@gmail.com 

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