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Ease of business needs single-window system
It will be beneficial if there is only one portal from where an individual can apply for the business and from there the application travels to the respective departments following a sequential order
In 2017, India jumped to the 100th position on the World Bank’s “Ease of Doing Business” (EoDB) list. The upsurge from the 130th ranking is an incredible feat pertaining to the economic reforms in the country.
Recalling what Ease of Doing Business is, it is an index published by the World Bank which measures the regulatory environment available to initiate, operate, control and eventually sustain any business. It is calculated as an average of 11 sub-indices, the first and foremost amongst them is the ‘Ease of Starting Business’. This particular index is significant as any business can survive only if it can be started with the same ease. It becomes even more necessary to focus on this particular index because India still ranks 156 for the index Ease of Starting Business (EoSB). Although reforms like merging the applications for the Permanent Account Number (PAN) and the Tax Account Number (TAN) have been made in context of EoSB and improvements have also been seen in the online application and filing system, there is still a necessity to emphasise on improving the sub-index discretely.
Now, since EoDB is measured as an average of its sub-indices, any index that has a low ranking has a tendency to pull the mean towards the lower extreme. Similar is the fate of EoSB index. Since it has a low ranking, it has the capacity to pull the rating of EoDB towards the weaker edge.
Putting forth an instance of starting up of a new restaurant in the Indian capital, Delhi, let’s find out, how ‘easy’ a procedure it is. The reason to choose the restaurant business is based on the facts that the Indian food and beverage service industry is growing at an unprecedented rate and is expected to contribute about 2.1 per cent of the total GDP of India by 2021.
Furthermore, as per the findings of the 2018-19 edition of India Food Report, the food service retail market in India is estimated to be worth Rs 3,40,201 crore in 2017 and is growing at a compound annual growth rate of 10 per cent. By 2020, the market is estimated to reach the size of Rs 4,52,733 crore. The organised share of the market is valued at Rs 1,17,307 crore while the unorganised market share is estimated to reach 59 per cent in 2021 from 67 per cent in 2016.
The large metro-cities of Delhi and Mumbai are estimated to have over one-fifth of the organised FS market, each contributing equally.
In the light of the above mentioned statistics showcasing ahead the permissions required to open a restaurant in Delhi:
1) FSSAI-Food Safety and Standards Authority Licence: It’s a 14-digit registration number obtained from the authority certifying the safety standards.
2) Liquor licence: From local Excise Commissioner. It requires a NOC from the State Fire Service and location plays a decisive role in obtaining this licence.
3) Health/Trade Licence: This licence is provided by the local municipal authorities or the Health Department.
4) Eating House Licence: Police Commissioner authorised. This licence ensures necessities like CCTV cameras, site plan, NOC from the landlord.
5) Shop and Establishment Act; 6) GST registration;
7) Fire Department; 8) Lift licence: Electricity Department.
9) Music Licence: This license is obtained from Phonographic Performance Limited. One can apply on their website for the authorisation.
10) Certificate of Environmental Clearance: From Ministry of Environment, Forest and Climate Change.
11) Signage Licence: In order to advertise the restaurant, the licence is obtained from the local civic authorities.
Now, let us compare the procedure of opening a restaurant in Delhi with that of Auckland (New Zealand). (New Zealand ranking first on the EoDB list as well as on EoSB lists makes it an obvious and ideal choice for comparison.)
The first and principal finding is that the above list of licences and permissions has not been obtained from a Government web portal or information centre. In fact, it has been procured from a private website that promotes the growth of food business and shares relevant information pertaining to it.
On the other hand, the website of Auckland council has comprehensive information on every possible business irrespective of the scale of the food business. It comprises detailed guides and stepwise procedures about permissions, fees and timeline. The website is also equipped with the ready to use templates of business plans. One can choose a suitable plan based on a business model, and follow the steps thereafter. The council is also open to customisation of business plans for some extra cost and time. Even the primary businesses, purely agriculture-based food business liked dairy and meat follow a business plan. It gives a sense of how organised the entire food sector is. Additionally, these plans are available on the website in multiple languages, including Hindi! This focuses on ease and availability of documents to all. The website and documents are self-explanatory and depict the procedures pictorially in the form of flowcharts and time diagrams.
Given the number of licences and permissions required to open a restaurant in Delhi it can be concluded that the safety and regulatory measures are kept under the check and are well placed but they are multifarious in nature. They do not follow a single window mechanism.
Taking into account the federal system that India follows, an absolute comparison between Auckland and Delhi on EoDB is difficult but other notions like having a single point of information over the internet and the availability of handbooks of the same at Government offices can certainly be adopted irrespective of the form of Government (federal or unitary) and thus making restaurant business an easy affair.
It will be beneficial if there is only one portal from where an individual can apply for the business and from there the application travels to the respective departments following a sequential order. The individual should be able to track his application and the system should be time bound. It will unquestionably be an upswing for the food businesses to be transparent and simplified. The use of this portal will surely ease the way food business is kicked off in India.
(The writer is a software engineer currently working as an executive at JIRICO, OP Jindal Global University, Sonipat)
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