Source: Lokmat
Recently our Hon’ble Prime Minister announced an economic stimulus package of Rs.20 Lakh Crores, on 12th May 2020, in a 20-minute speech ending at 20:20 hrs; with the aim of bringing back industries and business on track after the long unfortunate lockdown. The package that was announced, aimed to remove the problems and restrictions in doing business in the country.
Businesses are facing cash crisis as they were earlier asked by the government to pay salaries to the employees even during the lockdown. How will companies bear operating expenses when there is no work. All sectors were hit badly due to the lockdown and that is why Government announced Collateral free loans for MSME sector (Micro, Small and Medium Enterprises). These loans will be given to companies without asking for any securities.
Is this really going to help reduce the burden from companies? Source: World Finance
India’s aim is to improve its ranking in Ease of Doing Business Ranking Index done by World Bank. Last year India improved its ranking by a tremendous 14 places to 63rd position out of 190 countries.
How is a country ranked?
There are 10 parameters on the basis of which a country is ranked:
1. How easily can a firm be started in the country?
2. Dealing in construction permits- including allotment of Industrial Areas in major cities of the country.
3. Getting regular supply of electricity
4. Ease of registering the firm in a Country (list of documents required, how fast can a company start its operations etc.)
5. Getting credit for your business.
6. Protecting minority investors
7. Paying Taxes
8. Trade across borders
9. Enforcing contracts
10.Resolving Insolvency
According to some Analysts India is set to jump directly into the top 50 nations in the Ease of Doing Business Rankings by the end of this year.
What is the REALITY?
The government introduces new measures just to improve the rankings and attract investors. Then why after such good rankings we are able to excel in all fields possible?
When you step up to start a business in a country like India there’s much more than the Ease of Doing Business Rankings. The country’s infrastructure is still under development and not providing connectivity to many major industrial hubs in the country.
The labour provided in the country aren’t skilled or educated enough to work in big manufacturing units and need to be provided with months of training which is both time and money consuming.
Electricity is a major point in running Factories and industrial units and yet there are places in the country which have never witnessed electricity even after independence.
The education system involves no practical knowledge and thus many companies spend crores just for the training of individuals even though they have a Master’s degree in their hands.
Too much corruption in the country has made things worse. You have to spend so much money under the table even before you start earning for yourself.
The tax system confuses most of the entrepreneurs and ends up making them defaulters. There is no proper common education given to everyone about taxes which I think should be made a compulsory subject in schools.
Old practices like Angel Tax was put up on startups which did not allow many startups to excel in their fields.
There are no new measures to back the businessmen in our country.
Yes, India has now made certain big reforms which should attract foreign investors but even after easing up on many things there are many ways government puts up restrictions.
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