Ease of Doing Business for MSMEs: More than 33,000 compliances have been simplified, rationalized, digitized or decriminalized by central ministries/departments and states/union territories combined to promote ease of doing business in India, said Union Minister of State for Commerce and Industry Som Parkash on Wednesday. The MoS informed Parliament in response to a question about whether the government is aware that smaller industries are compelled to shut down due to tedious compliances.

“Government of India, along with states and UTs has been working to reduce the compliance burden on businesses. The objective of the exercise is to improve ease of doing business by simplifying, rationalizing, digitizing and decriminalizing government-to-business interfaces,” said Parkash.

Importantly, till September last year, 22,000 compliances were reduced, about 13,000 compliances were simplified while over 1,200 processes were digitized, government’s agency for industrial growth Department for Promotion of Industry and Internal Trade (DPIIT) had noted during a workshop on reducing the compliance burden in September 2021. Also, 103 offences were decriminalized and 327 redundant provisions/laws were removed.

However, out of 69,233 unique compliances that regulate doing business in India, there were still 26,134 clauses existing as penalties for non-compliance with business laws that could put entrepreneurs in jail, according to a report Jailed For Doing Business launched by TeamLease RegTech and Delhi-based independent think tank Observer Research Foundation in February this year. A typical MSME, having more than 150 employees, faces 500-900 compliances that cost Rs 12-18 lakhs in a single year, the report noted.

India was ranked 63rd in 2020 from 142nd in 2015 under World Bank’s Doing Business rankings. The annual report, however, was discontinued last year. Meanwhile, as per the government’s Business Reforms Action Plan 2020, which assesses states and UTs on the basis of implementation of various reform parameters for improvement of the business environment, Andhra Pradesh, Gujarat, Haryana, Karnataka, Punjab, Tamil Nadu and Telangana were announced as the top achievers in June this year.

The action plan includes 301 reform points covering 15 business regulatory areas such as access to information, single window system, labour, environment, land administration & transfer of land and property, utility permits and others, according to the Commerce Ministry. 118 new reforms were included to further augment the reform process while sectoral reforms with 72 action points across nine sectors such as trade license, healthcare, legal metrology, cinema halls, hospitality, fire NOC, telecom, movie shooting and tourism were introduced for the first time to expand the scope of reform agenda, the ministry had noted.