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India Must Break Complex Web of Business ‘Red Tapes’ to Beat China

The enemy to India’s economic growth is legal protocols. How will India become ‘atmanirbhar’ with so much red tape?

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3 min read

Video Editor: Deepthi Ramdas
Video Producer: Pratyusha Roychowdhury

There is a lot of chatter around how India should counter China – whether by means of army, diplomacy or politics.

While the only way to fight China is economic growth, the enemy to India’s economic strength is legal protocols. The Quint’s Sanjay Pugalia helps us understand this legal maze, a vicious cycle of legal processes that leave entrepreneurs and businessmen hassled.

India Must Break Complex Web of Business ‘Red Tapes’ to Beat China
(Photo: The Quint)
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And this problem persists across all sectors.

Seven types of legal webs prevalent in India:

  • Labour
  • Finance
  • Taxation
  • Environment
  • Health
  • Safety
  • Industry Specific Laws and
  • Commercial Laws

Within these seven sectors, there is another huge web of red tapism.

The complex web of Red Tapism:

  • Acquire License
  • Get Registered
  • Permission Required
  • Get Consent Order
  • Pay Returns
  • Put up a Display Board
  • Maintain Register
  • Pay Challans
  • Make Payments
  • Send Remittance
  • Get Renewal of Notice
  • Serve Notice
India Must Break Complex Web of Business ‘Red Tapes’ to Beat China
(Photo: The Quint)
MSME sector is one of the worst affected by these laws. MSMEs end up spending Rs 12 lakh annually to maintain these laws.

About 98 percent of the six crore MSMEs we talk about don’t have employees or hardly have one or two employees Think about what they have to go through.

Those businessmen, who can make the filings and pay the returns and are under the impression that one year of this process will make them the master of the system, are incorrect.

Not only that, some 3,000 laws are amended every year.

During the coronavirus period, at least 13 amendments were made on a DAILY basis. Regular clarifications were provided, which further confused the public.

India Must Break Complex Web of Business ‘Red Tapes’ to Beat China
(Photo: The Quint)

Such is the complexity of these laws that, as per last year’s economic survey, buying a revolver or a gun requires less formalities than purchasing a restaurant.

India Must Break Complex Web of Business ‘Red Tapes’ to Beat China
(Photo: The Quint)
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While India has climbed in World Bank’s ‘Ease of Doing Business’ rankings, from 133 in 2009 to 63 in 2019, the truth stands in stark contrast.

The fact is that most of the changes to labour laws, to make it easier for businesses, were made at the state level.

After extensive research, TeamLease has revealed that all of us are victims of the system, that has kept our hands tied and is keeping us from growing economically.

A host of discussions have taken place over how to escape this web. But, this extremely well-oiled machinery is completely covered in ‘red tape’.

There is a lot of chatter about how to write modern laws, how to simplify rules, how to bring about more transparency. But, one thing needs to be understood, more number of protocols lead to:

  • Lack of transparency
  • Corruption
  • Crimes
  • Red Tapism & Bureaucracy

So, if someone says that we need to strengthen our country and compete with China you need to explain to them that our country’s entire system is extremely dilapidated and shabby.

Until we change this, and don’t give freedom to the entrepreneurs to do business, India will suffocate in this web of stringent laws and we will never be able to compete with China.

How will India become ‘aatmanirbhar’, with so many chains wrapped around it?

(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)

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