State of small business in India

A friend owns a small sporting goods store in Bangalore. Regardless of the government in place, he and other businesses around him are forced to pay lakhs in bribes. Lakhs.

Someone from the Department of Metrology will come in one day. Go through EVERY item in stock so they can find something where the label has fallen off or is less visible. They ask that it’s okay for them to give him a court date so he can resolve it. Or he can pay a “fine”.

In a few days, the Department of Labour comes in. They will come with several people and go through every book and registration. Find something to blackmail him about. Then ask for a fine. Mind you, this is a person that is a stickler for transparency and is very organised.

Then there is the GST audit. The slabs are very weird here. It goes from 2.5% to 18% even though everything is sports. They will find one entry in a thousand within the inventory and repeat threat of courts.

A businessman close by to his store told them no, they couldn’t do this and even he had political reach. They gave him a date to resolve it in court where he spent months trying to respond to the summons. Unsure which department it was for.

Then there is the trade licence. They need an NOC from everyone about the business. They can go and ask people in the neighbourhood if they are okay with the footfall or if it gets too noisy. If they can frame anything as a complaint, they do.

There are well-known characters in the process. A man, well-dressed, well-known to businesses across town, makes lakhs in a day. He sits at the store and does not budge until he finds something. Keeps conversation light. Finds something. Asks to be paid.

Add here the random drop-ins by the cops who tale away goods worth thousands for 200 because “if something happens, like the lock on your shutter door is broken or your store is vandalised, you will need us. Help us out for now.” That is a hardly veiled threat.

This is understood to be normal. This needs to change. more