Starting a biz just got easier
COMPANIES wanting to set up new businesses in India will have to go through far fewer procedures than before. The ministries of industry, labour, company affairs and finance have worked together on new systems to reduce time taken to obtain various clearances, from 305 days to 166 days. Businesses will also be able to avoid some 120 procedures that they currently go through to meet the requirements of labour, land and revenue departments. This action follows a World Bank report which rates India quite low in respect of the ease of doing business. The Centre’s attempt is to reduce time taken at the time of registration of the company, approving the memorandum and articles of association, obtaining PAN and TAN, registration under the Shops and Establishment Act, registration for VAT, establishing the employees provident fund and so on. The government will soon inform the World Bank about the reduced procedures so that it can incorporate it in its yearly publication, which rates countries based on the ease of doing business. The trigger for the government to act is the annual world bank report — 2006 and 2007 — which rates India quite low, down at 134, among 175 countries in terms of the ease of setting up business. Reacting to the World Bank report, the government set up up a committee of secretaries (CoS) to go into the issue. The CoS studied procedures adopted and time taken by various relevant ministries in giving clearances. After an elaborate exercise, some new models have been adopted which cut both time taken and procedures adopted substantially. The cabinet secretary will formally be apprised of the new models this week. The small-scale industry ministry has also initiated faster methods to help closure of SMEs that are not registered under the Companies Act 1956.