CA Paras Mehra
Doing business in India is easy! It sounds strange because we are not ready for it. From a long time, we are hearing about how difficult is doing business in India, or India’s poor ranking in doing business report in comparison to the world.
But, the time is changing, and it is changing very fast. In the age of Digital India and technology is transforming India. India has been on track because everything is going online and thus helping in doing business easily.
We have a World Bank report on the ease of doing business and also it is not a denying fact that World Bank report on India is the best available analysis of doing business in India. But the ground reality is different from what we witness on papers. For company registration, the World Bank report still considers the old registration process while India has already launched the new registration process.
World Bank Report Vs Ground Realities
|S. NO.||PARTICULARS||TIME INVOLVED AS PER WORLD BANK||GROUND REALITY|
|1||Company Registration Process: (Old Procedure)|
|– Digital Signatures||1 to 3 days||1 day|
|– Director Identification Number||1 day||1 hour|
|– Name Approval||2 to 7 days||1 to 3 days|
|– Filing for Incorporation||5 days (average)||3 to 4 days|
|– Make Company Seal||1 day||3 Hours (Not required as per new rules|
|TOTAL DAYS (average)||14 Days||8 Days|
|2||Company Registration Process: (New Integration Process):|
|– Digital Signatures||“Silent on this New Process.”||1 day|
|– Director Identification Number||1 hour|
|– Filing for incorporation with Name approval – INC 29 Form – Integrated process||3 to 4 days|
|TOTAL DAYS (average)||5 Days (Average)|
As per above table, we can easily get to know that ground realities are different what we are witnessing on papers. The world is clearly silent on the new process launched by India. Indian reforms have not been taken into account for the ease of doing business report.
A real ground Check – How India is Changing
India is transforming. The new age of Internet and technology is transforming India into a Digital India. There are six examples of how technology is driving our growth and how doing business is getting improving day by day. Also, these 6 example shows how World Bank has missed out on these reforms:
#1 – Central Processing Registration: The time has gone when we have to wait for months to get the company registered. Now it is a matter of few days. The government has done away with wise state registration and has introduced the central registration for companies anywhere in India.
India is planning to achieve one-day company registration process.
#2 – Central Processing Name Applications: This is also one of the reforms that World Bank has missed out. Earlier, it is used to take 3 to 7 days for name approval. Also, the name rules were also very tough, and people get the rejection more than the approvals.
But now, this system has been transformed into the central registration system and rules for name approval have also been eased. Now, name approval takes hardly 1 to 3 days to approve.
The aim of government is to reduce this time into hours.
#3 – Bank Account without PAN card: This reform is not very famous and hence, the same has been missed by World Bank as well. According to World Bank, it will take at least 25 days (14 days for company registration plus 11 days for PAN card) for business to apply for the Bank Account.
The company can open its bank account just after the registration without the PAN card. You just need the basic documents with PAN card application ( proof that you have applied for it) to open the bank account. So you don’t; have to wait for your PAN card to apply for a bank account.
#4 – Service Tax Registration in two days: The time has gone when you have to make the personal visit to the department to apply for the service tax registration.
Now, the registration is just a click away. The registration certificate will be issued within two working days. Also, you need to send all the supporting documents via post.
The government will soon make this registration paperless and more convenient. Also the documents required are also pretty simple.
#5 – Import Export Code: Getting the import export license was one of the trickiest work in the past. Also, there was a lot of corruption in the department.
With the new system in place, you can get the import export code hardly within two days of applying. Also, the whole process is online. You just need to upload the documents and file the application correctly.
#6 – Startup India App: This is for the first time in Indian history when any Prime Minister has launched any scheme related to new business/startups on such a bigger level.
Also, there are a lot of approvals which are tough to get are now just a click away. These approvals can be obtained by self-certification and can be easily applied through the startup India App.
Through this article, we have proved that World Bank report on the ease of doing business is far away from reality. India is moving fast and ranking regarding the world will only be a number. The ground realities are much better than what is shown on papers. Also, there are many other reforms which are going on, and some are waiting for approval like Goods and Service Tax (GST).
India has got the wings! It just needs to fly!
About the Author
CA Paras Mehra is a practicing Chartered Accountant having a wide experience in Startup consultancy, Taxation and Company law. He is also a founder of Hubco.in