Unshackle the rules and regulations and administrative powers to kick start enterprise
May 6, 2020

Unshackle the rules and regulations and administrative powers to kick start enterprise

All India Association of Industries(AIAI) is a premier Chamber of Commerce , an apex body  representing the trade, industry and employment since 1956 . AIAI is a think tank established to suggest government about remedial measures in the changing economic scenario.

Ms. Sangeeta Jain, Senior Director, All India Association of Industries said, whenever any economy has to restart or kick start or to move into global sphere many of the countries  in the past have brought down administrative and political powers and regulatory system to enable private enterprises to have freedom in job creation and wealth creation for eg USA , China and others.

Today we have moved more administrative power vested with bureaucracy, government authorities, administration and regulation which is not making possible to create enterprises on fast track which ultimately generates employment and goods for state and central which ultimately leads to job creation and revenue to exchequer .

In fact the economic reforms initiated since 1991 and the subsequent reforms initiated after that have created more riders to every reform rather than reducing number of laws and regulations in case of direct indirect taxes , GST or state level taxes. All this has led to more litigations which is nearly 85% of litigations with government in regard to interpretation of law, addition in taxes by revenue authorities state and central government or other laws confronting and running the enterprises. This only leads to loss of time and growth and expenditure in regards to lawyers .Besides, each case takes 8-20years to be resolved.

Is this what Government wants?

If government sees the number of cases government has lost in regard to revenue matter or otherwise and the amount blocked because of litigation, a scenario which is otherwise uncalled for.

Because of various policy paralysis at times which was since in the year 2009/10 onwards and commitments the government setting up of enterprises is not met including state and central and many enterprises became NPA leading to default which includes banks and financial institutions not fulfilling commitment or not meeting the timeline which has led to loss of enterprises, entrepreneur and money.

In case of retrospective and  regressive laws with criminal clauses  governments have lost revenue and could have charged interest or reasonable penalty instead of branding every entrepreneur for mistakes commited at times as few may have  criminal intentions and may be habitual but majority are not.

Similarly banks declaring defaulters/Wilful defaulters without going into merits and going through facts its very easy to put entrepreneurs out of business but difficult to create entrepreneurs.

If government conducts survey on this subject it will come to conclusion that more than 40% of jobs loss and enterprises or exchequer or banks is due to these reasons but ultimately the blame goes to job creator and wealth creator which means the entrepreneur .

But the blame has been never owned or taken by political leaders , bureaucrats , banks and regulatory authorities nor any authorities have been pulled up for administrative delays and lapses.

Further Ms. Jain said, if you go by statistics and records in last 1 decade the Indians have invested more overseas than in India and many more Indians have become NRI. Also, the foreign investors either have put up new plants or shifted from China or other countries have gone to Vietnam, Thailand and Bangladesh but have not come to India because of excessive laws , regulations and non proactive part in administration.

Although , our PMs and Indias image overseas is on a higher scale in the global scenario but they have not been able to attract investment and companies to come here. Reason speaks for itself.

Now its opportune time for the government in light of the challenges ahead to reduce the powers, rules and regulations so as to enable enterprises to flourish so that domestic and foreign investors could come and start new era in India for betterment of tomorrow in interest of economic growth , employment and revenue generation.

We hope our suggestions are taken in good spirit of development of the economy in order to boost its growth, added Ms. Jain.