Making Doing Business Easy - Addl Inputs

Dear Friends:

We would like to revisit the subject of "Making Doing Business Easy". Kindly share your inputs on state of things on ground. Also, if you have Issues, Root Causes or Solutions to suggest, please review the list below and provide your comments.

We will be summarizing them and submitting a revised whitepaper to PMO, Ministry of Finance, Corporate Affairs, MSME, Commerce and State Leaders.

It is very critical that these solutions are implemented as fast as possible for success of Make in India as well as for jobs and economic growth.

We look forward to your inputs!
Rajendra Pratap Gupta


Making Doing Business in India Easy

Key Issues Identified

1. The interaction with bureaucracy when it comes to starting/running a business is too much
2. A large amount of paperwork leads to a lot of delays and increases chances of corruption
3. Access to credit for SMEs to facilitate their expansion is very tough
4. Labour laws are rigid
5. The company registration is a tedious and a time consuming process as one has to run behind different departments to get different licenses/clearances
6. The rate of interest on bank loans for business in India is very high
7. A number of taxes like Sales tax, Central sales tax, vat, interstate sale obstacles like road permit, etc. are imposed which increases the cost of the final product, time spent on non-productive tasks and corruption
8. To set up and operate a business, even when doing everything by the book, one has to bribe various agencies to ensure things are not stalled
9. Service tax system is extremely complex with many unknowns making compliance very hard and affects a large number of people

Root Causes Identified

1. No time bound decision making or clearances
2. Requirements of EPF, ESI and Payment of Bonus Act are too stringent for MSMEs
3. Rate of interest on loans is too high
4. Collaterals are required. This makes it tough for the budding entrepreneur to get a loan and he enters the vicious circle of the black money mongers
5. Banks/FIs reluctant to fund such non-traditional ventures without high collateral coverage
6. Lack of transparency and the amount of discretion the govt. employees have while granting loans, licenses, etc.
7. No Customer Service/ centricity training
8. Ambiguous laws with interpretation left to the individual in office
9. Processes are not technology driven
10. Lenient reviews and no feedback mechanism to Government
11. Simplify labour & land-acquisition laws
12. Inter-department working should be made smoother

Solutions Identified

1. Greater freedom from government control on industry.
2. The interaction with bureaucracy needs to be minimised when it comes to starting/running a business
3. The paperwork should be done away with and the entire system should be computerised. Lesser the paper work/human interaction, lesser are the chances of corruption
4. Corruption should be eradicated by bringing system interfaces and time bound services
5. Easier access to credit for SMEs and labour law flexibility required in states to facilitate the expansion of small scale industries to larger ones
6. It will also be critical to boost employment of low skilled labour
7. There should be a single window movement of applications for the entire gamut of registrations
8. There should be a time bound decision making/approval granting process
9. The rate of interest on bank loans for business in India needs to be brought down
10. The business tax structure must be simplified - Implement GST so that the goods/services are taxed just once
11. No need to impose Sales tax, Central sales tax, vat, interstate sale obstacles like road permit, etc.
12. There should be a law/guidelines to make sure that the payments to the SME’s are received as per the agreed terms and on time
13. The present labour law needs to be amended so that there is more transparency on both the sides
14. Cheap and continuous power should be made available to the industries and the use of solar energy should be enhanced
15. A dedicated helpline number for the business owners to get facts and answers to general questions more  

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Dear Anil,

Thank you.
My own projects are not business projects..they are construction of Hospitals, Housing .
I intend to fund those from my own earnings via the foundation.
I am sending you the request for funding for India from one of my colleagues (business funding) and you are welcome to send the documents to him for his review.

For India we need International companies with past performance

1) Solar companies

6) Smart City construction companies
Wishing you a great week. more  
The procedures or no of steps don't make a process tedious rather expectation of bribe by govt employees even for the right process makes Entrepreneur harassed. And if some body doesn't bribe them then the govt employee harass them so much that he falls prey to middlemen or bribe these offcials more  
The laws / rules / regulations / tax etc etc are framed by persons who are , for all practical purposes, never affected by these. Then these are passed in parliament again by persons who are practically above all these. This is a fact, hope most will agree. Then these laws/rules/regulations/taxes etc are implemented again by persons who are practically unaffected by the way these are implemented. The departments never give clarification when queried, they will try to avoid it all costs. To get a reply or clarification from any department is worse than climbing the Himalayas.

Wish to cite a case briefly , a sales tax case , in which assessment was conducted for 5years at a particular rate of tax , in the sixth year an officer disputes this rate and suggests a much higher rate and taxes for the past 5 years are recovered with interest and penalty. Is this fair/just. Many had to close their businesses due to this ruling. Forget about ease of doing business in these conditions.

Suggestion:- All laws/rules/regulations/taxes etc etc should be framed by groups having 75% persons not from the public. The establishment/government should be only 25% of the group. Shri Modi said , minimum government maximum governance. Hope he can do it. People who will be affected by laws should be the law makers. This is the only out for India. more  
Why only doing business (manufacturing ?) should be easy? Why getting education, health and judicial services should not be easy? Similarly why other personal services from government offices like Nagar Nigam, Development Authorities (like DDA, JDA), pension offices should not be easy?

Let us understand that doing business will never be easy if citizens do not get their personal services easy from government or private enterprises/offices.

Simple Rule: In socio-economic systems which are complex and closed with feedback, I return what I get. When I am treated without care and respect, I also don't care for others and demand favours (corruption) in return for my services.

Modi ji got the great mandate of people only because people viewed him delivering good personal services from government offices and good government policies that make private enterprises deliver good personal services. If he fails in doing so, Make in India, Swachh Bharat or any of his dream projects of making India great will NOT succeed.

My personal experience in Rajasthan of services from government/private enterprises/offices till now is not encouraging. Governments can fool some people some time but not all the people all time. more  
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