Businesses will be able to be registered in one day, rather than the 27 required now.
Times of India reported on the Indian government’s plan to “make India a better place to do business”, with a range of reforms announced including “working to cut down the time for registering a business from 27 days to a single day” as well as “single registration for all labour laws”, an overhaul of taxation systems, a reduction of the number of required permits, an easing of property registration and quicker electricity connections.
The government reacted as a consequence of India being placed 134 out of 189 countries worldwide in the World Bank’s “Ease of doing business” index, behind China (96), Pakistan (110) and Bangladesh (130). Prime Minister Narendra Modi launched the ‘Make in India’ campaign at the end of September to “transform India into a global manufacturing hub by encouraging foreign businesses to invest in the country”, with these moves part of that process.
The Department of Industrial Policy and Promotion (DIPP) is the “nodal agency” for ensuring the passage of the reforms, with a timeframe of three to six months set “for implementing the changes”, with all government ministries asked “to come on board and work to reform the regulatory structure”, including an “overhaul [of] the investment climate”. Additionally, individual states are also being asked to help out with their own reforms, in order to “cut down delays”.
In terms of the tax system reforms, the government is suggesting a reduction in the number of taxes, the online payment of taxes, an incorporation of education taxes under corporation taxes “to simplify the process”, and the abolishment of the Minimum Alternate Tax (MAT), which is enforced on developers of special economic zones (SEZs).
Inspections of low risk businesses would be stopped, whilst computer-based selection would be undertaken in terms of inspecting high-risk businesses, and a uniform policy and procedure for all states was suggested “so as to enable the single-window clearance system” for businesses. The government cited Malaysia, New Zealand, Canada, Rwanda, Turkey and the UAE as examples of nations that have “eas[ed] up the processes and reduce[d] delays” in business applications.
One final, challenging hurdle is ensuring electric connectivity for businesses, with the government recommending “removing the requirement of pollution control certificates for providing a connection”, whilst state electricity boards and the ministry for power “have been asked to simplify procedures”. An anonymous official concluded that “to achieve all this, the government, along with the states, will need to carry out radical measures on a war footing.”
US investors pledged around $45 billion (€33.5 billion) to India in terms of investment earlier this month, and you can read more about ‘Make in India’ and how it could affect the country’s remanufacturing industry in a future issue of The Recycler.