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In a move which could significantly improve the ease of doing business, the Centre proposes to make five years the minimum period for which licences and permits are renewed by various ministries.
“The Cabinet note on national policy for ease of doing business, approved by the Commerce and Industry Minister, which aims to do away with the need to renew most licences and permits, also suggests that any renewal should be granted only after obtaining the approval of the Cabinet Secretary,” a government official told BusinessLine .
All ministries will be asked to list out the licences/registration granted by them to businesses, and eliminate the requirement of renewal for most, the official added.
If a ministry is of the view that in order to meet regulatory needs it is important for licences in a certain sector to be renewed, it has to objectively justify its stance. “Even in cases where a renewal is justified, the periodicity of renewal should not be less than five years, to reduce the burden on businesses,” the official further said.
Eye on ranking
The national policy on ease of doing business, being steered by the Department for Promotion of Industry and Internal Trade (DPIIT), aims to help India reach the goal of being among the top 50 countries in the global ease of doing business ranking carried out by the World Bank every year. India ranked 77 out of 190 countries last year, climbing up 23 places.
The Cabinet note has now been forwarded for inter-ministerial consultations and will subsequently be sent to the Cabinet for approval.
The need to renew registrations, clearances, no objection certificates and licences imposes a heavy burden on businesses, and its elimination could reduce the time and cost of compliance, according to the DPIIT.
The official quoted above said the DPIIT has already included this recommendation in the State reforms proposed by it, and States and Union Territories have been advised to eliminate the requirement of renewal of registration under the ‘Shops and Establishment Act’.
Towards ease of doing business
- Cabinet note on the national policy for ease of doing business aims to do away with the need to renew most licences and permits
- If a ministry insists on renewals, it should first justify its stance
- The renewals should be made for at least five years
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