MoEA and MoF recommend ways to cut red tape for doing business

The Ministry of Economic Affairs (MoEA) and the Ministry of Finance (MoF) as part of their reports to help the economy revive from the COVID-19 impact has suggested cutting red tape for businesses as one of the key recommendations.

According to a reliable source the government is taken up by this and is giving it serious thought.

 The MoF has recommended to revisit and simplifying the regulatory measures and norms applicable to process trade licenses irrespective of the scale of investment. 

It has said the approval process should move online with reduced turn around time (TAT). 

It has called for allowing first and regulating later with loose procedures and tight outcome for specific investment projects. The MoF has also asked for policy and technical backup. 

With MoEA handling most of the approvals it has come up with the bulk of suggestions to reduce red tape both broadly and in greater detail too.

MoEA wants to reduce the turn around time by 50% for business clearances across all sectors.

It also wants to adopt a policy of “silence is consent” after that reduced TAT is published.

It wants to adopt a negative list of restricted or prohibited activities by all sectors to facilitate business start-ups so that everything else would be allowed.

The ministry wants to start a registration system for business start ups for cottage and small industries instead of lengthy clearances.

MoEA wants standardized national guidelines for all local governments to adhere for business approvals.

The ministry would like to digitize all public services and complete last mile digital connectivity of services that are online and so eliminate paper based requirements, enable self printing of approvals

They also want to ease access to land for industries.

The MoEA has gone into greater detail on the issue of reducing red tape or at least reducing it in both in its own ministry and across agencies.

It says that the post-COVID-19 situation reinforces the urgency of creating a conducive investment environment through collective efforts of the various RGoB agencies responsible for such activities.

It says concerted and collaborative efforts will be necessary to boost economic activities through initiation of various policy and support measures.

Short term measures in MoEA

It says relevant agencies under the MoEA should endeavor to reduce the TAT to enhance service delivery by instituting a one stop center for processing of proposals including sector clearances.

The other is fast track issuance of Letter of Interest (LoI) for State Reserved Forest Land within 3 days from the existing TAT of 5 days and fast track issuance of LoI for land in industrial estates within 2 weeks from current TAT of 4 weeks 

It asks to announce industrial plots and CSI spaces within one week of vacancy instead of the current 1 month.

It asks for fast track issuance of environment clearance for projects delegated to Department of Industry (DoI) within a period of 3 days except for those requiring site visit instead of the current one week. 

It calls for fast track incorporation of companies within 2 days instead of the current 5 days and fast track issuance of project approval within 7 days instead of the current 14 days.

The ministry says the Department of Industry and the Department of Cottage & Small Industry (DCSI) should endeavor fast tracking of post approval services.

It asks to reduce TAT from current 5 days to 1 day for issuance of value addition certificate, issuance of recommendation for fiscal incentives and issuance of recommendation for visa.

 Time for approval for ownership transfer is recommended to be reduced from the current 7 days to one day, up gradation approval within 10 days from current TAT of 14 days, issuance of import license within 3 days from current TAT of 5 days and approval for additional activities within 10 days from the current 14 days 

Mid to long term measures

The ministry says the proposed reforms may also require amendment of the FDI Policy (2019).

Currently, priority projects are approved by Department Level Project Approval Committee and non-priority projects by Ministerial Level Trade and Industry Committee. 
It asks for approval of priority projects to be delegated to the respective Divisions to fast track the process. Similarly, non-priority project approval is to be delegated to the respective Department.

It asks for identifying and delegating medium and large-scale projects to the Regional Trade and Industry Office (RTIO) for direct issuance of license online where clearances are not required or are issued by Local Governments like transport, real estate etc. 

It asks to extend renewal period of license for cottage scale industries to three years similar to micro trade registration.  

The ministry also wants to explore possibilities of exempting startup incubates in the Startup Centers from having to obtain sector clearances for nurturing their business ideas and prototype products during the incubation period. 

The ministry has recommended to extend current fiscal incentives beyond 31st December, 2020 until a revised Act is enacted. 

It has asked to provide fiscal incentives to startups based on recommendation from DCSI without the requirement to obtain a business license 

It has asked that visa recommendations to Department of Immigration be processed directly by the respective Departments.  

The ministry has recommended reviewing and revising the Licensing Rules and Regulations 1995.

It calls for online filing services for statutory documents filing by Companies through the up gradation of Online Registry system for Companies.

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