From March, you can start a business in Mumbai and Delhi in just 4 days

Government planning to slash the number of days required to start a business in Mumbai, Delhi from the current 26.

Illustration: Uttam Ghosh/Rediff.com.

The central government plans to cut to four the number of days taken to start a business in Delhi or Mumbai, from the current average of 26 days.

The department of industrial policy & promotion (DIPP) aims to do so via a combination of measures -- streamlining the application process, single-window clearance and more digitisation.

Ramesh Abhishek, DIPP’s secretary, has told state commerce ministers and officials these would be in place by March. He has also asked states for ‘detailed business process engineering’ to overhaul the current process in this regard.

These two cities are the testing ground for the World Bank’s ranking on ease of doing business in this country. The latest ranking for India is 131 of 189 countries surveyed.

The development should have an effect on entrepreneurship in other cities, too. As for the measure on ‘starting a business’, one of the 10 on which the World Bank does the ranking, this country is at 155th position, further down from 151 a year before. 

Currently, there are 14 procedures to start a business in Mumbai and 12 in Delhi, down from an average of 29 only two years earlier.

Among these, the maximum time is taken by two steps -- reserving the company name online with the registrar of companies and registering for medical insurance at the regional office of the Employee’s State Insurance Corporation. 

While most procedures have been put online and government departments in charge of approving these told to maintain efficiency, problems such as slow rate of clearance, duplication and technological hurdles will be targeted by DIPP.

“More synergy between agencies, which provide clearances belonging to the central government, as well as those at the state and municipal levels, are needed,” says Anirban Guha from consultancy Deloitte.

Getting power connections, securing building permits and registering property are all dealt at the municipal level, where more policy action is needed.

While some states have instituted a specific body such a single-stop secretariat to look at all concerns of a new business, others are yet to do so, a DIPP official said.

The World Bank rankings come against the backdrop of government officials repeatedly saying India’s ranking would be impressive in the 2017 report.

Prime Minister Modi’s stated aim is to push India among the top 50 nations by the time the 2018 report comes. That means rising 80 places in a year.

Officials contend the target is being maintained, with key ministries being made responsible for delivering on various parameters.