food for thought

To make it easier to start an enterprise, the rendra Modi government has begun the Startup India initiative. It plans to plug critical gaps in the economy and streamline processes for startups to grow and develop at good pace. So when we talk of startups, the question turally arises — how easy is it to start and run a business in India? According to the World Bank’s ‘Doing Business Report 2016’, India ranks 130 out of 189 countries in the ease of doing business. This certainly does not seem much, considering that communist Chi is ranked 84th in the list. In fact, India’s ranking has actually improved by four places compared to the preceding year. Whether in starting a business, getting construction permits and accessing electricity — India’s position has definitely improved. However, on two counts its performance has worsened — in accessing credit and ease of paying taxes. It is hardly surprising that the bank sector with its huge non–performing assets burden and some regressive practices, has not been up to the mark in lending effective credit support to startups. And despite all governmental talk about simplifying the tax system, only the entrepreneur knows what hell it is to go about paying a bewildering variety of taxes. It is worse in Assam where the entrepreneur has to expend 90 percent of his time and energy in taking care of permit and tax hassles. He has to consult a battery of tax experts to go about paying sales tax, income tax, central excise duties and service taxes. Complicated calculations need to be done to take care of tax deducted at source (TDS). Provident fund and ESIC contributions have to be worked out for employees. As if the myriad departments and agencies constantly on his back are not enough, the entrepreneur in Assam has to regularly pay out goonda tax to sundry mafias and syndicates. There are allegations that some political parties too have fine–tuned their tactics of making entrepreneurs cough up contributions, particularly before elections. Yet when these same parties run the government — instead of overhauling this pernicious system, they preach to the people not to look for government jobs but to start their own enterprises!