In order to set up a company in India, there are several factors which need to be taken care of. India has always been called an Over-Legislative country due to innumerable procedures which are required to be followed in order to establish a company and further running the same.
Further yearly compliance of all the regulations in order to keep the business running is also a burdensome process which further adds to the difficulties faced by the corporate. Due to these hurdles India has always been lagging behind in the World Bank’s Ease of Doing Business. World Bank has indexed India at 130th position in the Doing Business Index, 2017 which itself indicates that there is a lot to do in the area of ease of doing business. But there is a lot of improvement in the regulatory frameworks during these years due to which the position has accelerated to 130th from 144th in 2015.
Moreover Prime Minister Narendra Modi, since the inception of his tenure has initiated lots of programs in order to attract the investors and bring changes in the economy which includes starting of Make in India Program, Start-up India, Standup India Program, Skill India and Digital India. These programs have helped the country to digitalize and have made regulations efficient enough to be in the reach of common people with not as much of knowledge about the regulations. Undoubtedly the programs initiated during Modi’s regime are playing an important role in transforming the image of India and presenting the economy as one of the most attractive economies in the world for investors.
However, if we analyze the Doing Business Index, we can see India as still lagging behind at an alarming position of 155 in Starting a Business in India which is a critical situation for a developing country like India. One needs to get registered with the Registrar of Companies in order to set up a business in India. The normal procedure takes not less than 10 working days to obtain a certificate of incorporation. Further, in order to obtain Permanent Account Number (PAN), Tax Deduction and Collection Account Number (TAN) and Opening of Bank Account, which are mandatory prerequisites to run a business in India, it takes from 15 to 30 days. It does not end here. Other formalities like registering under the public contribution funds like Provident Fund (PF) and Employee’s State Insurance Scheme (ESIC), registration under Service Tax, Excise, VAT and other laws as per the applicability which varies from State to State adds to the burdensome formalities which are required to be completed to set up and run a business in India. Taxation is also a field worth counting in the hectic procedures and regulations adding to the issues faced.
To conclude looking at the current scenario it is absolutely difficult to state that establishing a business in India is easy. However Modi regime has raised many hopes which is still needed to be observed.
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