DPIIT Plans To Weed Out Redundant Compliance Rules For Startups

In a bid to improve compliance burden in India, the Department for Promotion of Industry and Internal Trade (DPIIT) has said that attempts are underway for the past year to do away with redundant rules.

DPIIT secretary Guruprasad Mohapatra said, “We are very keen on improving compliance burden in the country. It is a major assignment given by the Prime Minister and Cabinet secretary is monitoring its progress.”

Mohapatra highlighted the idea to reduce compliance came out of Narendra Modi’s conversation with Marriott International president and CEO Arne Sorenson, who had complained about India’s complex regulations to start and run a hotel in India.

According to the National Restaurants Association of India (NRAI) study, which was quoted in the Economic Survey FY20, a person needs close to 45 documents to obtain a license from Delhi Police to open a restaurant. Meanwhile, only 19 documents are required to procure new arms and only 12 to get major firearms.

The relaxed compliance will also be in lines with the government’s agenda to improve ease of doing business. India has managed to improve its rank for EoDB from 77th position in 2019 to 63rd in 2020 as mentioned in World Bank’s Doing Business 2020 report. The country has come a long way from just five years ago. In 2014, out of 190 countries that were listed under World Bank’s EoDB Index, India was in the 142nd spot.

Now, the DPIIT has decided to focus on six areas to hit the top 50 spot by 2021. The six parameters include enforcing contracts, resolving insolvency, starting a business, registering property, paying taxes and trading across borders. It has also sharpened its focus on Kolkata and Bengaluru as key growth hubs, along with Delhi and Mumbai.

The department had also introduced Startup India Vision 2024, a five year plan to further promote startups. The document proposes a series of steps aimed to encourage budding entrepreneurs in the country. Under Startup India Vision 2024, the department has proposed a simplification of regulatory measures such as reducing tax compliance time to an hour per month and debt financing facilities, a DPIIT official was quoted as saying.

Besides this, it is also looking to set up 500 new accelerators and incubators and building innovation zones in urban local bodies, set aside a corpus of INT 10K Cr fund dedicated to Startup India. The vision document also proposed that startups should be allowed to bid for the government’s work orders and pilot projects.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.