It was really horrible to think about starting a business in India a few years back. The First step was to keep your sleeve up, then keep the toes on mark and enter the formalities to form an entity which itself will take your brain and soul out. The next step was to run from pillar to post, jump up the hurdles, fetching for oxygen and finally giving up everything to the hands of God Almighty and relax. The next immediate step will be to find out an easy way to exit this mess and to see that the exit is the most difficult job in this universe. Being in the corporate advisory and business setting up services for last 16 years, I had personally witnessed this run helplessly for several times. When the New government under the leadership of Mr. Narendra Modi had taken the charge at Central, the prime motive had set on to improvise the business atmosphere in India. Alas!
To the truthfulness to their words they had sincerely tried (trying) to improvise the business conditions in India by amending the laws , integrating the service platforms, relaxing the FDI norms , bring down the procedures for Import and export and much more. I would like to highlight few of those steps here which will be helpful to you , if you are in business or you are planning to enter into a new business.
Washing out the mess created by Companies Act, 2013.
The much awaited new version of the Companies Act came out in 2013 during the last spell of the UPA Ministry. But unfortunately the said act was a totally blind towards the industries and was tailor made for the professionals and bureaucrats. There was so much confusion in the Air and the act seems make the life complicated for industry, professionals and for the society at large. After the new Government steps in, they had taken several initiatives to relax the norms by bringing in pro industry changes to the law through notifications, circulars and amendments. But those changes are still within the larger frame work created under Companies Act, 2013. The best way is to repeal it and start afresh!!
Major highlights of the changes made in the system
Requirement of minimum paid up capital and common seal under the Companies Act 2013 has been done away with.
Registration for Permanent Account Number (PAN),Tax Deduction Account Number (TAN), EPFO(Employees' Provident Fund Organization) and ESIC(Employee's State Insurance Corporation)and incorporation of company can be done through a single form on eBiz portal.
Time taken for obtaining PAN and TAN on eBiz portal has been brought down to T+1 days.
Provision made for applying for company name and Director Identification Number (DIN)at the time of incorporation with single Form -INC29.
Online and real time registration of ESIC and EPFO has been introduced.
Provision for online payment of EPFO and ESIC contributions has been introduced.
Number of documents required for imports and exports have been reduced to three.
All documents for export and import to be submitted electronically with digital signatures i.e. no physical submission of document
Insolvency and Bankruptcy Code with provision of easy and faster exit, passed by the Parliament.
SARFAESI (Central Registry) Rules have been extended to register extended security interests.
Registration with ESIC and EPFO has been made real - time by eliminating all physical touch points. The requirement of opening a bank account has been removed as a mandatory condition for registration with ESIC and EPFO. The system of issuing PAN and TAN has been put in place together within T+1 days on an application using digital signatures on the ebiz platform. PAN and TAN numbers can be issued on CBDT’s portal within T+3 days without digital signature.
Form INC 29 has been launched by Ministry of Corporate Affairs to avail 3 preregistration services viz. ‘Name Availability’, ‘Director Identification Number’ and ‘incorporation of company’ with one form and one payment
Under Trading across borders’ parameter, Central Board of Excise and Customs(CBEC)has implemented Single Window Interface for Facilitating Trade (SWIFT)(online single window for clearance of goods) on the ICEGATE portal by integrating FSSAI, Animal Quarantine, Plant Quarantine, Drug Controller and Wildlife Control Bureau for imports.
Customer risk management system has been extended to other regulatory agencies to ensure risk-based inspections.
Limit on the number of consignments released under direct delivery has been removed by Ministry of Shipping thereby facilitating prompt delivery of goods in more cases.
The Arbitration and Conciliation Act has been amended to reduce the time taken in arbitration proceedings and grounds on which an award may be challenged.
One stop access for Investors to know more about Investment opportunities and Information on number of Licenses/approvals required from Government agencies.
User friendly features such as Payments through netbanking, credit & debit cards, status tracking, SMS alerts and Help-desk support enabled.
Investor can apply for 20 Central Government services as there is a steps towards Elimination of multiple visits to different agencies by integrating those services in EBiz Platform.
Amendment to Foreign Direct Investment policy to attract more investment to India, especially in Defense, Ecommerce and constriction and infrastructure development segment.
Miles to Go! Even though these steps are to improve the business environment in India, there are is more room for further improvement. Following are the areas which needs urgent intervention of the Government to bring up the International ranking on India in terms of Ease of Doing Business from 186th.
1. Obtaining of Digital Signature certificate It is easy to take a business VISA to India than taking a DSC. For a foreign national obtaining of DSC is a nightmare. The Government should relax the present provisions for obtaining of DSC for a Foreign national by cutting down the number of attestation ns required from various officials such as Notary, Apostile, Consularate etc. The difficulty in getting the DSC is the first steps for entering the business and it they face hurdles at that stage itself, then the impression will fade out.
2. Extension of business VISA. Many of the foreign nationals who are entering the business Zone of India are facing hurdles in getting their business VISA extended and that is again giving a bad impression about the business culture we are maintaining. There should be some relaxations on the Foreigners who had started an entity in India and the concerned Embassies should be given appropriate advise.
3. Too much discretionary powers on Officials. Its Killing! Under the new companies Act, many of the provisions are giving officials such as Regional Director, Registrar of Companies with discretionary power to penalize the companies who are making delay in filing of returns. These discretionary powers are opening ways for corruption as many a times the companies are at their mercy to get things done. Government should intervene to standardize the fee and fine structure for the offenses by taking away the discretionary powers such as “Minimum penalty of Rs. 5 lakhs which may be extended upto Rs. 25 lakhs on directors or on Company or on both”. With the passing of Goods and Service tax and other enactments which are in pipeline, I hope that the business environment will go for a drastic change. But at the same time, the Government should ensure that the system is independent of “Bureaucratic clutches” and “Licence Raj” All the Very Best
Picture Courtesy:- Your Story-Daily Mail-toon Clips | Data Source : Various Government Portals