Economic Survey 2020: Although India moved up 14 places in the World Bank's ease of doing business ranking to be placed at the 63rs spot in 2019 among 190 countries that are mapped by the index, starting a business still remains a troublesome task.
Economic Survey 2020: Although India moved up 14 places in the World Bank’s ease of doing business ranking to be placed at the 63rs spot in 2019 among 190 countries that are mapped by the index, starting a business still remains a troublesome task. The Economic Survey which was tabled by Chief Economic Advisor Krishnamurthy Subramanian, earlier today took note of the same in a chapter titled, ‘Targeting Ease of Doing Business in India’.
A comparison was drawn with other economies of Asia where licenses required by an aspiring business owner to start operations is far less than what one requires in India. However, what was more shocking was the analogy drawn between the number of licenses required in the country to own a firearm and the number of licenses required to start an eating and lodging establishment. The Chief Economic Advisor also made a reference to the Bollywood movie ‘Band, Baaja, Baarat’ in the survey presentation to support his claim that entrepreneurship in India is widespread and not just restricted to big cities.
“The services sector too faces many regulatory hurdles even for routine businesses. The bars and restaurants sector is an important source of employment and growth everywhere in the world. It is also a business that, by its nature, faces a high frequency of starting new businesses and shutting old ones,” the survey said.
Watch Video: What is Union Budget of India?
The number of documents required for a license to procure new arms and major fireworks is 19 and 12 respectively, said the survey.
The market size for restaurants in India is at a staggering $61 billion. Indian restaurant industry employed 7.3 million people in 2018-19, according to the National Restaurants Association of India (NRAI). However, the number of licenses required to start one range from 20 to 40.
Before opening a restaurant one needs to get his hands on licenses like Food Safety, Heath/Trad, Fire NOC, Weights and Measures, Music License, Environment
Clearance for Gen Sets (Air Pollution Act) and even a Police Eating House License in some cities like Delhi and Kolkata.
According to NRAI, a total of 36 approvals are required to open a restaurant in Bengaluru, Delhi requires 26, and Mumbai 22. Delhi and Kolkata also require a ‘Police Eating House License’. The number of documents needed to obtain this license from Delhi Police is 45. On the other hand to start a restaurant in Singapore and China one required only 4 licenses.
It was highlighted in the survey that in India only a handful of permissions to open a restaurant can be secured from a government portal or information center, whereas, in countries like New Zealand the website of Auckland Council (operated by a private third-party agency) has all detailed guides and stepwise procedures about permissions, fees, and timeline to open a restaurant. The Auckland Council website also provides applicants with ready-to-use business plan templates and information on different businesses. “The contrast reflects a difference in approach – government control versus curation/ partnership,” the survey adds.