The report compiled by TeamLease RegTech with the ORF found that there are 69,233 unique compliances which broadly regulate doing business in India out of which 26,134 clauses have imprisonment clauses as a penalty for non-compliance.
New Delhi: On June 14, Prime Minister Narendra Modi said in a tweet, “The last 9 years have witnessed future reforms. This period has not only improved the 'Ease of Doing Business' but also encouraged the spirit of entrepreneurship among our youth. We will continue to work towards this goal to promote growth and innovation.” In fact, since long the Ministry of Micro, Small and Medium Enterprises (MSME) has been focusing on making the process of setting up their businesses easier for entrepreneurs. Despite its various efforts, starting a business for an MSME in India does not seem to be that easy. Not only capital raising, market creation, there are still some clauses in Indian law that make entrepreneurs think twice before starting a business. A year after independence, India's commercial laws still have 26,134 clauses that can land an entrepreneur in jail if violated. https://www.mudrayogi.in/2023/06/capital-expenditure-rs-56415-crore-allocated-to-16-state-by-centre.html
Such information has emerged in a recently published report titled 'Jailed for Doing Business' by TeamLease RegTech and Observer Research Foundation. Which is completely contrary to the 'Ease of Doing Business' campaign of the Central Government. That said, despite the government's talk of simplifying business practices, the Indian Commercial Code still leaves more than 26,000 sections that carry jail or prison sentences. This has a direct impact on the country's employment. According to the report, India has 69,233 unique compliances, which govern all business practices and activities across the country. There are 26,134 clauses in it, which can lead to imprisonment of the businessman if not complied with.
Not only the fear of imprisonment, but also the legal costs of doing business are very high in India. According to the report, the financial burden is imposed on MSMEs that comply with the law. A typical MSME with more than 150 employees faces 500 to 900 compliances, which can cost Rs 12-18 lakh annually. These compliances are applicable not only to for-profit business organizations but also to non-profit organizations. Five states of the country – Gujarat (1469), Punjab (1273), Maharashtra (1210), Karnataka (1175) and Tamil Nadu (1043) require more than 1,000 business laws. https://www.mudrayogi.in/2023/06/capital-expenditure-rs-56415-crore-allocated-to-16-state-by-centre.html
According to the report, doing business in the country requires numerous central and state approvals in labor, finance and taxation, environment, health and safety, office, trade, special industries and general laws.
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