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Ease of doing business? India still has 1,536 Acts, 69,233 compliances for firms to follow

Analysis by TeamLease Compliance shows compliance burden remained onerous for firms in India. Govt says it has taken many steps but agrees more needs to be done.

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New Delhi: The Indian regulatory landscape has 1,536 Acts, more than 69,233 compliances and 6,618 regulatory filings across the Centre and states — an indication that ease of doing business for companies still remains a work-in-progress for India despite an improvement in the rankings. 

According to an analysis done by TeamLease Compliance, there are a total of 677 Acts, 25,537 compliances and 2,282 regulatory filings at the central level alone for firms to contend with it. 

In addition, the states have their own Acts and compliances that have to be followed. All the Indian states put together have 859 Acts, 43,696 compliances and 4,336 filings. 

However, one company may not have to contend with all the compliances, which vary depending on the nature of business, geographical location and reach, and employee headcount.

India was ranked 63 in the World Bank’s ease of doing business ranking last year, an improvement from its ranking of 134 before the Narendra Modi government came to power in 2014.

Also read: It’s easier to do business under Modi govt, but tougher to file taxes & register property

‘Have come a long way… more needs to be done’

A top government official ThePrint spoke to pointed out that the analysis may be oversimplified and exaggerated as not all compliances apply to one particular company and they vary on whether they are a manufacturing firm or an educational institution or a service-provider. 

Guruprasad Mohapatra, Secretary, Department for Promotion of Industry and Internal Trade, which is driving the ease of doing business initiative, told ThePrint the government has taken many steps to improve the ease of doing business and is aware that more needs to be done. 

“The attempt has been to make all processes simple, transparent and online to the extent possible. Many antiquated Acts have been identified and repealed. Focus is also on reducing the compliance burden. Many provisions have been decriminalised and the government is in the process of identifying more provisions across different Acts that can be decriminalised,” he said. 

Mohapatra added the government is focusing on improving its rankings further by looking at various areas where its rankings are low.

“We have come a long way. There was a time India was ranked 140 (in the ease of doing business index). But we also know that we need to take more steps to further improve the ease of doing business,” he added.

The most recent rankings showed India fared dismally in enforcing contracts and in registering property. 

Majority are labour-related compliances 

The analysis showed the majority of the Acts, compliances and filings are related to labour. 

States have 423 labour-related Acts, 31,605 compliances and 2,913 related filings. 

In addition, there are industry-related Acts and compliances that make up for the second highest compliance and filing requirements. 

Other compliances and filings include those dealing with finance and taxation, environmental, health and safety compliances, and other issues. 

Maharashtra has the most onerous compliance burden 

Among the states, Maharashtra had the most onerous compliance burden followed by Gujarat, Tamil Nadu, Uttar Pradesh and Karnataka. 

Maharashtra had 67 Acts, 3,657 compliances and 215 filings to be made.

The number of statutory and regulatory filings was more than 300 in Tamil Nadu, and 287 in Gujarat. 

Industry urges cut in compliances

Many entrepreneurs urged the government to cut compliances to improve the ease of doing business.

T.V. Mohandas Pai, chairman of Aarin Capital, called it a shocking list of compliances and urged the government to cut it by 75 per cent. 

“Complexity compounds for employers with expansion, scaling and headcount!,” wrote Satish Shekhar, founder of Yosync, a firm that provides blockchain solutions.

Also read: Telecom crisis, targeting e-commerce: Is Ease of Doing Business in Modi’s India a myth?


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