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In a major step to reduce compliance burden, the Food Safety and Standards Authority of India (FSSAI) has decided to grant perpetual licences to restaurants and food manufacturers on the condition that they file their returns every year.

The new licencing norms are expected to benefit industries involved in manufacturing, handling, packaging and selling of food items.

“Currently, licences need to be renewed between 3-5 years depending on the type of establishments. We have sent the proposal to the health ministry to amend rules under the Food Safety and Standards Act to allow perpetual licences. Filing annual returns will be made mandatory so that we could be sure that the establishment is in operation," a senior FSSAI official said, requesting anonymity.

Citing a study by the National Restaurants Association of India (NRAI), the Economic Survey FY20 said an entrepreneur needs 45 documents to obtain a licence from Delhi Police to open a restaurant—far more than the number of documents required for a licence to procure new arms (19) and major fireworks (12).

The Survey said a key challenge that firms face is the complex architecture of governance, including legislation and statutory compliances.

Prakul Kumar, secretary general of NRAI said this is a progressive move by FSSAI and will be beneficial for the restaurant industry. “This is a great step towards improving ease of doing business. We are fine with the conditionality of filing annual returns because a regulatory body needs to have some data with it," Kumar added.

The Centre is carrying out a systematic exercise across departments and states, to be implemented in two phases by 15 August, to reduce the compliance burden in 10 areas.

In the first phase with 31 March as the deadline, regulatory burden will be reduced in six areas that do not require amendments to any laws.

These are: removal of renewal requirements for licences; implementing third party or joint inspections with government authorities; standardizing and simplifying returns filing and reducing the number of filings; rationalizing or removing maintenance of registers and records; minimizing or eliminating display requirements for licenses; and digitizing and simplifying all manual records and procedures.

In the final phase to be completed by 15 August, compliance burden will be reduced in four areas that require amending existing laws.

These are: evaluating regulations in terms of time and cost to business and implementing ‘one-in-one-out policy; identifying and decriminalizing regulations that prescribe imprisonment for minor offences; identifying and repealing archaic laws and rules; and intensive use of new-age technologies such as blockchain, artificial intelligence, chat-bots and DigiLocker.

Prime Minister Narendra Modi earlier this month said the government plans to do away with more than 6,000 compliance requirements for businesses both at the central and state levels this year to facilitate ease of doing business.

While central departments are expected to reduce around 2,000 regulations, states have agreed to reduce around 4,000 compliance requirements.

A query sent to the health ministry remained unanswered till the time of going to the press.

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