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Home / News / India /  Govt plans to scrap 6,000 compliances to boost biz climate

Prime Minister Narendra Modi on Friday 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 in India.

“We are going to take it seriously. We have to get rid of the requirement to fill up umpteen forms. Your suggestions are crucial," Modi told industry leaders while addressing a webinar on the production-linked incentive (PLI) scheme.

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Department for Promotion of Industry and Internal Trade (DPIIT) secretary Guruprasad Mohapatra said last year that the government has started identifying redundant rules in state and central laws that can be removed to reduce compliance burden for companies operating in India. “It is a major assignment given by the prime minister, and the cabinet secretary is monitoring its progress," he had said in July last year.

Mohapatra said the idea came during Modi’s meeting with Marriott International president and chief executive officer Arne Sorenson, who complained about the complex regulations in starting and running a hotel in India.

A major challenge firms face is the complex architecture of the governance framework, including the density of legislation and statutory compliances
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A major challenge firms face is the complex architecture of the governance framework, including the density of legislation and statutory compliances

Citing a study by the National Restaurants Association of India (NRAI), the Economic Survey FY20 said one 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 major challenge most firms face is the complex architecture of the governance framework, including the density of legislation and statutory compliances.

On Friday, Modi said through the PLI scheme, the government is trying to emulate the examples of countries that have been successful in accelerating development by increasing manufacturing capacities. “Manufacturing firms around the world should make India their base and our domestic industry, the number and strength of our MSMEs should expand," he added. So far, the government has announced 13 PLI schemes worth 1.97 trillion in sops to boost local manufacturing with an aim to produce about $520 billion in India in next five years.

The recently approved PLI schemes in information technology hardware and telecom gear manufacturing will lead to a tremendous increase in production and domestic value addition.

“IT hardware is estimated to achieve 3 trillion worth production in four years and domestic value addition will rise from 5-10% to 20-25% in five years. Similarly, telecom gear manufacturing will see an increase of 2.5 trillion in five years. We should be able to export (goods) worth 2 trillion from this," Modi said.

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