India isn’t the most friendly country to start a business. The last ranking by World Bank had put India in 134th business (out of 189 countries).
The government has now decided to act on this and has amended certain regulations to make governance more efficient, effective, simple and user-friendly. The Department of Industrial Policies and Promotion (DIPP) has taken up a series of measures to improve the ease of doing business by simplification and rationalization of existing rules and by introducing information technology for better governance.The measures taken include:
To maintain uniformity in procedure of clearance and ensuring compliances, a comparative study of practices followed by states was conducted and six best practices were identified and circulated among all states for evaluation. The state administrations are to partner with DIPP in taking initiatives to ease business regulatory environments. In light of this partnership, application processes for Industrial Licenses (IL) and Industrial Entrepreneur Memorandum (IEM) have been made online and is available on the eBiz website to ease filing applications and online payments of service charges.
While the initial validity period for industrial licenses were 2 years, now this has been increased to 3 years, enabling licensees with more time by obtaining necessary clearances from the concerned authorities.
To make the grant of extension of validity of Industrial Licenses simple for entrepreneurs, guidelines have been issued to streamline the processing of applications. Grant of security clearance on industrial applications will have a maximum time of 12 weeks as finalized by the Ministry of Home Affairs.
To facilitate extension of validity of industrial license for entrepreneurs, partial commencement of production will be considered as full commencement. Also with the adoption of NIC Code 2008, Indian businesses will undertake globally recognized and accepted classification that facilitate smooth approvals/registration and categorization.
Defence products’ list of industrial licensing has been issued wherein large numbers of parts and castings have been excluded from purview of industrial licensing. Dual use items (defence and civilian items) unless classified as defence items, will also not require industrial licenses. This shortens the process for industries to undertake manufacturing. All applicants now only need to file an IEM for these items.
While earlier entrepreneurs required an affidavit which delayed the issue of license even after approval of licensing committee, the ‘Security Manual for Licensed Defence Industry’ has been issued removing the need for one.
The DIPP website will also now offer a checklist with specific time-lines has been developed for processing all applications filed by foreign investors in cases relating to Retail/NRI/EoU foreign investments.
Time taken in registration with Employees Provident Fund Organization (EPFO) and Employees State Insurance Corporation (ESIC) was considered by Ministry of Labour and Employment, Director General, ESIC and Central Provident Fund Commissioner. This has led to both processes being automated through on-line registration and ESIC registration number being provided on a real-time basis.
In order to improve the regulatory business environment all departments/State Governments have been requested to take the following measures on priority:
a. All returns to be filed online through a unified form;
b. A check-list of required compliances placed on Ministry’s/Department’s web portal;
c. Replacing all business registers with single electronic registers.
d. No inspection should be undertaken without the approval of the Head of the Department
e. introduction of self-certification for all non-risk, non-hazardous businesses.
The eBiz project will be implemented by the DIPP to create an investor centric hub-and-spoke based online single window model for providing clearances and filing compliances by providing a bouquet of services through a single composite form and a single payment mechanism which can be apportioned, split and routed to the respective heads of account of Central / State / Parastatal agencies along with generation of challans and MIS reports.
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