Describing the country’s business structure as very complex and unjust, the Confederation of All India Traders (CAIT) while referring a recent report of Observer Research Foundation ( ORF) said that business spectrum is highly gripped with cobweb of laws & corresponding rules which have distorted & complicated the business structure in India.
During past 75 years from my independence, traders across the country were not only harassed but also made subject to thousands of rules and regulations and all kinds of restrictions due to which the business structure of the country has suffered badly.
CAIT has urged the Central Government that the business of the country should be simplified under the Ease of Doing Business vision of Prime Minister Narendra Modi. This responsibility lies on both the central government and all the states because the laws of the center as well as the states are imposed on the traders. It is to be noted that Prime Minister Narendra Modi under ease of doing business program has already destroyed more than 3500 irrelevant laws.
CAIT National President BC Bhartia and National Secretary General Praveen Khandelwal said that the ORF report while giving the reference of a recent research report titled “Jailed for Business” said that there are 1,536 governing laws in India on the various businesses, out of which 678 are of Central Government and 858 laws are of State Governments. These laws prescribe 69,233 compliance provisions are of Central Government and 43496 are of State Governments and 25,537 are of Central Government. It is very surprising that in all these business laws there is a provision of imprisonment under 26,134 sections.
Khandelwal and Bhartia also added that it has also been said in the report that compliance of laws keeps changing from time to time which makes the structure of business even more uncertain. In the 12 months till December 31, 2021, there have been 3,577 regulatory changes; Ina three year period from 1 January 2019 to 31 December 2021, there were 11,043 changes in compliance requirements, meaning an average of 10 regulatory changes every day which makes the business structure more complex. Itâ€™s almost difficult for the traders to know frequent changes and cope up with the same. Even the officials do not understand implication of frequent changes.
Of the 1,536 laws governing business in India, more than half have provisions for imprisonment. Of the 69,233 compliances that businesses have to comply with, 37.8 percent (or about two out of every five) have imprisonment clauses. More than half of the clauses causing imprisonment carries a sentence of at least one year. With these complications, the trade find it difficult to grow in proportion if the capacity which halt promotion of entrepreneurship in the country, generation of more employment, smooth conduct of business which has a direct opposite effect on the country’s GDP.
Referring to the report, Bhartia and Khandelwal said that in five states Maharashtra, Gujrat, Punjab, Tamil Nadu and Karnataka have more than one thousand imprisonment sections .It has also been said in the report that an MSME which works in the manufacturing sector and has about 150 employees, has to do 500 to 900 types of legal compliance in a year, due to which an additional burden of 12 to 18 lakh rupees is being imposed on them. These are unwanted expenditures for the trading community which can not be reimbursed from any quarter.
The report also states that criminalizing trade laws violates Indian business practices. Since the time of Mahabharata to the Arthashastra, in ancient India, criminal action against businesses was never a part of punitive action – there were only financial punishments that made people more fearful. Expressing gratitude to ORF, Bhartia and Khandelwal said that for the first time after independence, any organization has done such vivid research on this issue. They further added that CAIT will soon confer with ORF and will conduct a national debate in the country on this subject in collaboration and will demand Central and State Governments that the laws which have become irrelevant at present, should be abolished and all the laws should be reviewed. Provision of imprisonment should be imposed on only such laws whose violated are causing injury to the health of a person or injury to the sovereignty of the country, and in all other laws, only fines should be imposed for wrongdoing.