Starting a company in India would take lesser time now. The government is considering a series of amendments in the Land Registration Act as well as Shops and Establishment Act to bring down the time for setting up a business from the existing 300 days to 100 days.
The department of industrial policy and promotion (Dipp) has set up a task force to bring about these changes and prod state governments to work out models to cut various procedural delays in starting up new business.
The Dipp has initiated the process of working with ministries like finance, labour and company affairs to reduce project-related hurdles. Allotment of PAN and TAN would also be speeded up for companies to kick-start new business.
Significantly, the World Bank report on doing business (2006) ranked India at 134 position, just four notches up from its previous spot.
Starting a business in India takes 35 days and involves 11 procedures. Obtaining permits, completion of notification and inspection, and getting utility connection take as high as 270-300 days. Even Maldives, Pakistan , Bangladesh, Sri Lanka & Nepal are ahead in the bank’s ranking in the “ease at doing business” category.
“We have also asked states governments to work collaboratively towards reducing procedural hurdles involved in starting a business in India. States like Gujarat and Maharashtra have speeded up the clearances required for new businesses. These states complete procedures in 60-80 days. We have urged other states to follow suit,” a senior Dipp official said.
“Whether it’s on acquiring land, getting power and water, or necessary permits and licenses, state governments have a major role to play. Tamil Nadu, Gujarat and Andhra Pradesh have become proactive in this regard,” he said.
The World Bank considers 10 criteria to assess the ease of doing business. These include ease of starting business, getting a licence, receiving credit, protecting investors, paying taxes, cross border trade, and closing a business. Most emerging economies like India are not among the top 30 countries in the World Bank ranking.
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