Reserve Bank of India Governor Raghuram Rajan has said that India needs to make opening a business a hassle-free experience for entrepreneurs. There needs to be a one-page form on the lines of Saral (the simplified income-tax return) for regulatory clearances to open a small business, said Rajan, addressing the Delhi Economics Conclave on Wednesday.
Currently, about 40 permissions are required from various statutory authorities to open a business, noted Rajan. “We need to review our regulations and bring them in tune with current times.”
India ranks poorly on the World Bank’s ‘ease of doing business’ index. Part of the reason for the poor ranking is the difficulty faced by entrepreneurs in opening or closing businesses.
Rajan exhorted political parties not to postpone the passage of key economic Bills, stating that a stable government after the 2014 general elections is not a given.
“It would be dangerous for parties to postpone necessary legislation with the idea of passing the legislation post-election… Post-election politics may become even more challenging for whoever assumes power,” he said.
CHECKING INFLATION The RBI’s focus will remain on controlling inflation, said Rajan, hinting that he may not the key policy rates in the policy review on December 18.
The RBI had increased policy rates by 25 basis points during each of its last two reviews to tame inflation.
On monetary policy, the RBI will be guided by the recommendations of the Urjit Patel committee, which is expected to submit its report by this month end, said Rajan.