A solar power producer with its plant in Maharashtra and a corporate office in Haryana has to comply with more than 2,700 compliances spread across the centre, state and municipality limits, a report by TeamLease Regtech said.
The regulatory technology (Regtech) solutions company pointed out that a standalone solar energy producing plant in Maharashtra where electricity is generated and transmitted through the grid, along with a corporate office in Haryana, must comply with a total of 2,735 compliance instances for a year.
These include 799 unique regulatory obligations spread across 646 central, 153 State, and municipal requirements.
Rishi Agrawal, Co-Founder and CEO at TeamLease RegTech, pointed out that managing over 2,700 annual regulatory requirements at three levels of legislation and seven categories of the law requires a combination of people, process, technology, and partnerships.
“As the company expands its geographical footprint from a single state to multiple states, the numbers grow exponentially. Managing them in an ad-hoc, paper-based, people-dependent compliance program leaves an organisation vulnerable. 9,331 annual regulatory changes compound the problem,” he added.
Agrawal emphasised that the first step is to raise awareness on regulatory obligations. Besides, proactively monitoring regulatory updates and maintaining a detailed compliance checklist can ensure adherence, he added.
Compliances
From a regulatory category standpoint, labour-related compliances make up the largest share at 244, followed by secretarial (238), finance and taxation (84), environment, health, and safety (58) and industry-specific regulations (106), the TeamLease Regtech report said.
These are followed by commercial (38) and general (31) compliance requirements. These are just the unique number of obligations that inflate once factored with different frequencies, it added.
A company also needs to manage obligations such as maintaining registers, making periodic payments, testing equipment, displaying statutory notices, handling audits, and reporting to various authorities, it added.
The labour category entails 244 distinct compliances, which expand to 1,071 when accounted for their required frequency.
These cover critical legislation, including the Employees’ Provident Fund Act, Maternity Benefit Act, Payment of Wages Act, Sexual Harassment of Women at Workplace Act, and others.
“Under the Factories Act and Maharashtra Factories Rules, for example, pressure plants must be tested every four years, a requirement that is often overlooked but carries legal consequences. Of the 83 compliance provisions that include imprisonment, 77.1 per cent are from the labour category, making it the most criminalised category of law,” the report pointed out.