India: A Tease Of Doing Business In India

Last Updated: 5 May 2015
Article by Singh & Associates

Most Read Contributor in India, September 2016

With an aim to bring India at par with the other countries for being a place of doing business with ease, Government of India took series of measures in past few months.

The emphasis has been on simplification and rationalization of the existing rules and introduction of information technology measures to make governance more efficient and effective. In this present write up some of the initiatives taken by the Government have been highlighted:

  1. e-Biz is a significant initiative sponsored by Department of Industrial Policy and Promotion (DIPP), Government of India, that seeks to establish a one stop shop portal for all the G2B (Government-to-Business) services offered across the entire business life-cycle. The essence of eBiz is the creation of a business-friendly environment through a service-oriented approach to the needs of investors, industries and businesses. It involves integration with the departments that interface with the business community across the three levels viz., Central, State and Local Body. DIPP, on February 20, 2015, took an initiative towards its 'Ease on Doing Business' agenda under the e-Biz project and emphasized on simplification and rationalization of the existing rules and introduction of information technology measores and solutions to make governance more efficient and effective. DIPP specified 14 such services, which are as follows:

    1. Process of applying for Industrial License [IL];
    2. Industrial Entrepreneur Memorandum [IEM] ;
    3. Employer registration with ESIC;
    4. Employer registration with EPFO;
    5. Company name availability;
    6. Allotment of Director's Identification Number [DIN];
    7. Certificate of company's incorporation;
    8. Declaration of commencement of business;
    9. Reserve Banks of India's Foreign Collaboration General Permission Route;
    10. Advance Foreign Remittance [RBI];
    11. Permanent Account Number [PAN];
    12. Tax Deduction Account Number [TAN];
    13. Issue of Explosive License [PESO]
    14. Importer Exporter Code [IEC-DGFT]
  2. The department vide its Press Note 3(2014) have excluded various defense products from the purview of industrial licencising. In the said press note itself the dual use items, having military as well as civilian applications (unless classified as defence item) will also not require industrial licence from defence angle. For these items only an Industrial Entrepreneur Memorandum (IEM) has to be filed.
  3. Vide Press Note 4(2014) new NIC Code has been adopted which is the advanced version of Industrial Classification. This code allows the Indian business to be part of globally recognized classification that facilitates smooth approvals/registration.
  4. Similarly, vide Press Note 5(2014) the initial validity period of Industrial License has been increased to three years from two years. The intention of the government is that earlier the entrepreneur might have to reapply the licenses reason being they were not able procures and obtain necessary clearances/ approvals from the authorities.
  5. The Ministry of Home Affairs has also in its initiatives has stipulated that it will grant security clearance on Industrial License Applications with 12 weeks. In other cases then Explosive and those which require approval from Foreign Investment Promotion Board, security clearance will be valid for three years unless there is a change in composition of management or shareholding.
  6. Earlier, an entrepreneur was required to seek extension in case of partial commencement of production however, now the partial commencement of production is being treated as commencement of production of all the items included in the license.
  7. To know the tentative time lines for approval, 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 and have been displayed on the DIPP website.
  8. Process of applying for an Environmental and Forests clearances has been made online through Ministry of Environment and Forests' portals. Further the requirement for environment assessment report is now required for industrial shed, school, college, hostel for education institution above 20,000 square meters of build up area up to 1,50,000 square meters of build-up area.
  9. In order to improve the regulatory business environment the DIPP has directed to all regulatory authorities (Central/State or Union Territories) to take the following measures on priority:

    1. All returns should be filed on-line through a unified form;
    2. A checklist of required compliances should be placed on Department's web portal;
    3. All registers required to be maintained by the business should be replaced with a single electronic register;
    4. No inspection should be undertaken without the approval of the Head of the Department;
    5. For all non-risk, non hazardous businesses a system of self certification should be introduced.
  10. An entrepreneur can avail of all these services 24x7 online -- submission of forms, attachments, payments, tracking of status and obtaining the licence/permit from the portal.

Above were some of the initiatives taken by Government of India to give the ease of doing business in India and is continuously working to further relax the regulatory procedures.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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