Starting a business in India is now easy, with a five step process

With the initiative of ‘Make in India’ and the boost given to various startups by the Government, starting a new business in India is now an easy process. With various procedures done away with, a business can be established with ease and at a lower cost.

India has recently conveyed to the World Bank, that the process for beginning a business in India has now been reduced to 5 from 14. In a survey on the ease of doing business, India ranked at 130, out of the 190 countries on the list. The survey was carried out by the World Bank. Earlier, India was ranked 155 among the 190 Countries. 

In a response to the report, India mentioned that five procedures had been merged into one now. This included obtaining the director identification number, permanent account number and the tax deduction account number- had been merged into one. Similarly, the processes for employee provident fund has been moved online and the requirement for inspection has been done away with. The requirement of company seal as well as the digital signature has been removed. Bank accounts are not mandatory for any forms and there is no more Inspection under the Shops and Establishment Act.

Officials mentioned that various reforms have not been included by the World Bank and they want to ensure that the same are incorporated now onwards. For example, the requirement of digital signature is not mandatory for the registration of specific companies, although, a person may have a digital signature for the purpose of a variety of online transactions. Hence, it was incorrect to count it as an additional requirement.

This survey has considered business practices across Delhi and Mumbai only. For Mumbai, it has clubbed the VAT registration and professional tax into one process. Further, the cost of incorporation of a company has been reduced to Rs. 5,293 to Rs. 3,860 from 2016 to 2017. This was mainly due to a reduction in the procedures. The World Bank is yet to take various reforms into consideration which will have an overall impact on the ranking.