EASE OF DOING BUSINESS - India need to move fast forward
The initiatives taken by the Government have already created a positive atmosphere and mindset. The nation is committed for Make in India and to aggressively implement growth strategy for India. A big push in the direction of removing regulatory and bureaucratic hurdles including approvals, inspections, filing, licenses, reviews, returns, detailed compliance's and procedures is very necessary.
The government action on withdrawal of old unrequired legislation need to be supplemented by rationalization of all legislation, which are impacting growth of business significantly. Government has made several approvals faster and easy besides introducing electronic governance systems. However, all major hurdles in growth are still hovering on the head of trade, business and commerce. To take few examples:
- Company Law- full of compliance's, forms, filings, restrictions, limitations, procedures and regulatory requirements even for small company, One person Company or private companies. Most of the restrictions are unnecessary for better efficient and effective corporate Governance.
- SEBI has introduced so many Regulations, disclosures, Codes and advisories which are not in the interest of sustained growth of capital market. There are inadequate initiatives to channelize risk capital to businesses. Investors' confidence is still very low. SEBI's disclosure based systems have failed to bring real monitoring on diversion of funds, manipulations of markets, poor corporate governance and have resulted in withdrawal of faith of general investor in the capital market. The midsize or even large size company (barring few very exceptionally top companies) are not inclined to raise resources as a public limited listed company due to serious concern on hurdles, cost of issue, compliance's and prosecutions even on technical matters.
- VAT - With no reliance on businesses, the entire purchase and sales transactions (100%) need to be reported and filed. All inter- state movements of goods are also mandated for advance individual filings. Even small and mid-size traders need very detailed compliance's.
- Taxation - In spite of deep doze of simplification recently, the transfer pricing, ICDS, TDS, scrutiny, survey, raids, GAAR, POEM, MAT, internationally highest rate of taxes (including dividend tax), corruption are all major challenges,
- Industrial Laws - the age old labour laws having over doze of minimum wages but hardly protect the welfare of labour. The MNC companies in India are exploiting even white collar employees with no observation of timings, hire and fire. The contract labour is no body's baby. Provident fund law need to be rational and ESI is not meeting any proper objective.
- Real Estate - the sector is full of licenses, CLUs, approvals, clearances, massive corruption in regulatory department. The in completed projects are waiting for government support to ensure delivery and meet housing needs. The sector need low cost funds in addition to strict monitoring on diversion and misuse of funds.
We can keep on writing, but the list is endless. The government is very active at political levels. However the mind-set and approach of the bureaucratic administration and those who are at different levels of government is still full of controls, apprehensions and procedures. The judiciary at lower and middle order, need significant beefing up.
All Indians need to actively support our Bharat Mata with commitment, positive mind set and pragmatic approach for coming out of the hurdles.