New platform for compliance relief
NEW DELHI: Taking forward the government’s efforts to reduce compliance burden on companies, finance minister Nirmala Sitharaman on Tuesday announced the launch of a “trust-based governance” model as the second version of Ease of Doing Business, which will also incentivise states to simplify regulations.
“For the ‘Amrit Kaal’, the next phase of Ease of Doing Business (EODB 2.0) and Ease of Living, will be launched. In our endeavour to improve productive efficiency of capital and human resources, we will follow the idea of ‘trust-based governance’,” she said in her Budget speech.
Amrit Kaal is a term being used for the 25 years beyond Azadi ka Amrit Mahotsav or the 75th year of India’s Independence.
The 25-year period leading up to the 100th anniversary of Independence was mentioned by the Prime Minister in his August 15 address.
So far, the Narendra Modi government has reduced over 25,000 compliances and repealed 1,486 Union laws.
“Now the objective is to involve state governments in reducing bureaucratic processes and redundant laws by nudging them though incentives for digitalisation to make lives easy for both businesses and people,” one finance ministry official said, requesting anonymity.
Speaking in Parliament, Sitharaman said: “This [ease of compliances] is the result of our government’s strong commitment to ‘minimum government & maximum governance’, our trust in the public, and ease of doing business (EODB).”
“In our endeavour to improve productive efficiency of capital and human resources, we will follow the idea of ‘trust-based governance’,” she said.
This new phase will be guided by an active involvement of the states, digitisation of manual processes and interventions, integration of the central and state-level systems through IT bridges, a singlepoint access for all citizen-centric services, and standardisation and removal of overlapping compliances, she said.
Crowdsourcing of suggestions and ground-level assessment of the impact with active involvement of citizens and businesses will be encouraged, she added.
The EODB will include continuing policy reforms and a predictable tax regime.
“Drawing wisdom from our ancient texts, we continue on the path to progress. The proposals in this Budget, while continuing with our declared policy of a stable and predictable tax regime, intend to bring more reforms that will take ahead our vision to establish a trustworthy tax regime,” she said.
“This will further simplify the tax system, promote voluntary compliance by taxpayers, and reduce litigation,” the finance minister added.
Nilaya Varma, co-founder and CEO of consultancy firm Primus Partners, said, “The overall focus of the FM’s speech was on improving ease and the cost of doing business is important.”
“We have improved significantly over the last five years but a lot more needs to be done. The government is one of the largest buyers and end-to-end digitisation of billing to ensure timely payment is most welcome as it supports MSMEs, who are the largest suppliers to the government,” she said.
“Accelerated corporate exit to speed up voluntary winding up for companies from two years to under six months: this is a big bottleneck currently and would really help companies looking to wind down. Ease of exit is as important as ease of setting up under the ease of doing business objectives of the government,” said Maulik Doshi, senior executive director-direct tax and transfer pricing services at Nexdigm.