As a significant step towards restoring faith amidst the doom and gloom scenario prevailing in many quarters, the Finance Minister unveiled a new policy designed to speed up government processes and compliance obligations titled the “Less Government, More Governance” scheme.
Fundamentally, the goal is to simplify legal and finance compliances which all businesses need to comply with, but are today especially onerous for young businesses and SMEs.
These sector(s) typically contribute to most of the growth in the economy and a lion’s share of the job creation.
A good example to illustrate the challenges in the present scenario would be the rent control laws, which have rightly been called archaic. There is a proposal to simplify them by passing a Model Tenancy law which will be finalized and circulated among the states. This law is likely to cover the following,
- A rent ceiling to be fixed in consultation with the state government to avoid arbitrary hikes.
- The law is likely to safeguard and prevent landlords from being able to evict tenants impulsively
- Also, the Government will be adding 1.95 crore houses as proposed to be provided under the PMAY scheme- Phase 2.
Another example would be corporate bond trading, which is going to be made more accessible to business owners.
Along with these policy recommendations above, the Less Government, More Governance Policy also envisages:
- Automatic pre-filing of Income tax returns
- Consolidating all Labor Laws into 4 Labour codes
- Simplifying GST and automating the refund process
- Faceless assessment in Income tax and GST
- Proposal of Direct Tax Code (DTC) to simplify complex Income Tax laws
- Addressal of the Angel Tax issue
- Interchangeably using Aadhar and PAN for tax purposes, thereby avoiding multiple applications for both cards
- A window for all businesses to clear pending cases
- Easing of local sourcing procedure for retailers
- Streamlining the existing KYC norms for foreign investors
- Improve the user-friendliness of corporate trade bond platforms
- Absorption of digital transaction fees by banks
- Implementing electronic invoicing from January 2020
- Interoperability between RBI and SEBI
Only time will tell the extent to which the policy recommendations see the light of day, but there have been precious few times as ripe for budding entrepreneurs to launch their business as right now.
BY: Hrishikesh Datar is the CEO of Vakilsearch