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Govt steps in to ease woes of start-ups

Concerned ministry seeks details from various departments on the progress made on easing of several issues that afflict business startups, reports Gaurav Choudhury.

business Updated: Aug 26, 2007 23:31 IST
Gaurav Choudhury
Gaurav Choudhury
Hindustan Times

A concerned commerce and industry ministry has sought details from various departments on the progress made on easing of several cumbersome procedural issues that afflict business startups in India.

The move comes after the World Bank pointed out that starting businesses in India was difficult because of lengthy, complicated and time-consuming procedures.

Stung by the very poor ranking given by the World Bank, Ajay Shankar, secretary, department of industrial policy and promotion (DIPP), has written to Revenue Secretary PV Bhide that necessary action need to be taken on the issues pointed out by the World Bank.

India ranks at a lowly 134, 41 places after China which is reforming at a faster pace, says a World Bank report tiled Doing Business that compared almost all global economies in terms of ease of doing business on various parameters.

The rankings track indicators of the time and cost to meet government requirements in business start-up, operation, trade, taxation, and closure. They do not track variables such as market size, macroeconomic policy, and quality of infrastructure, currency volatility, investor perceptions, or crime rates.

India’s ranking was worse that the Maldives (53) and Pakistan (74), followed by Bangladesh (88), Sri Lanka (89), Nepal (100), and ahead only of Bhutan (138) and Afghanistan (162) in South Asia.

The top 10 reformers in 2006 were: Georgia, Romania, Mexico, China, Peru, France, Croatia, Guatemala, Ghana, and Tanzania.

A Committee of Secretaries (CoS), which was formed in November last year, has considered the report and directed follow-up action.

The government felt that considerable progress has been achieved during the last 12 months in easing procedural delays in India. Acting on the report, the government has developed a model where 11 procedures, such as approval of name and memorandum and articles of association, obtaining permanent account numbers, registration for value-added tax and so on, are now completed in 16 days instead of 35 days as pointed out in the report.

On registration of property, another time-consuming issue in India, the National Institute of Urban Affairs (NIUA) has been assigned the job of developing a model to reduce time and procedures.

First Published: Aug 26, 2007 23:25 IST

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