Licence raj still, focus on 'ease of doing business'

New Delhi: As many as 45 documents are needed to be submitted to open an eatery in the National Capital against only 19 to buy a gun, the survey said on Friday, while making a case for doing away with unnecessary rules and rationalising regulations for improving ease of doing business.

The government should focus on reducing time and cost of starting a business in India, especially in the services sector, which faces many regulatory hurdles “even for routine businesses”, the Economic Survey noted. Bars and restaurants are employment sources which also face high frequency of opening and closing.

Delhi requires 26 licences and approvals to open a restaurant, while Bengaluru requires 36 and Mumbai needs 22. In addition, Delhi requires a ‘Police Eating House Licence’ from the Delhi Police that asks for 45 documents.


“The scope for streamlining is clear,” the survey said, noting that China and Singapore require only four licences to open a restaurant.

“India continues to trail in parameters such as Ease of Starting Business (rank 136), Registering Property (rank 154), Paying Taxes (rank 115) and Enforcing Contracts (rank 163),” the survey said.

The Survey noted that increasing digitalisation and seamlessly integrating multiple agencies onto a single digital platform can further reduce procedural inefficiencies in cross-border trade significantly and improve user experience substantially. Streamlining of logistics on Indian seaports needs close inter-ministerial coordination, it said.

The Survey asked the government to map out regulatory and process bottlenecks for tourism and manufacturing, and correct them at the central, state or municipal levels.

“Setting up and operating services or manufacturing business in India face a maze of laws, rules and regulations,” the Survey said. In manufacturing alone, units have to conform with 6,796 compliance items, which is a “tedious and time-consuming task”, the survey noted, adding that burdensome documentation must be removed.