Advertisements
Monday, June 1, 2020
Home Opinions Ease of business under the Modi Government

Ease of business under the Modi Government

Also Read

monishs
Monish Shete is the CEO of Elscint Automation, a leading manufacturer of vibratory bowl feeders, part feeders and small part handling products in India. He has almost 3 decades of experience, with the last 20 years being with Elscint. Since joining Elscint, he has consciously shifted the focus of Elscint towards exports and now more than 50% of Elscint's revenues.

Lately, especially with elections round the corner, there has been a lot of talk by various opposition parties about how small businessmen are suffering, especially due to the after effects of demonetization and GST. Further, even eminent economists are saying that there is jobless growth in India. Further, all the analysts mention about how industry itself is suffering. I am a small businessman having a manufacturing unit with 35 people working under me. I sell my goods all over India as well as export too. I would like to mention my experiences about these various points –

  1. DEMONITISATION: 100% of the business transactions we make are accounted even though we deal with small companies as well as big corporates. The reason being that everyone requires tax set-off, even in the earlier excise and vat regime. Hence, all dealings are by cheque / bank transfers. Even all vendors and employees are paid by cheque / bank transfers. Cash is required only for minor day to day petty cash purchases. Earlier the major cash expenses were octroi charges paid to various courier boys, who used to get the material by paying octroi. With octroi being abolished, this component of cash expense has been eliminated. With regard to minor day to day expenses for items bought from nearby shops, after demonetization, we set a practice of weekly cheque payments with these shops, reducing the cash outflow. Further, as I did not have any excess cash lying with me, the problem of depositing the same did not arise!

Another advantage was- after demonetization, everybody started accepting cheques and credit cards, to the extent that even the local grocery shop and vegetable vendor, further reducing daily cash expenses.

Who has suffered are the businessmen who dealt mainly in cash. But then Demonetization put them on the the track.

  1. GST – The advantages are GST are numerous.
    1. First and foremost, as complete credit can be availed, there is an incentive for all businesses to purchase with bill, reducing the cash component.
    2. Earlier, for out of state purchases, one had to get C Form from the buyer. This was a huge problem for companies like mine who deal in capital goods and have one time transactions with a lot of customers. Every year, the C Form not received liability came in lakhs of rupees to be paid to the sales tax department. With GST, the whole requirement of getting C Forms is gone, resulting in a lot of savings in time and money. Nobody is highlighting this advantage!
    3. Return filing is now smooth and can be done by any lay person. Earlier, there were Excise returns, VAT returns (in fact, one for CST and one for VAT) – monthly/quarterly as well as annually, LBT Tax etc. Further, along with the returns, there were the mandatory audits and scrutinies, which resulted in corruption and huge wastage of time. Plus consultants had to be paid for the returns as well as audits.
 

With GST, all this is gone and the return filing, though 2 returns a month, is quite smooth. A lot of service providers too have cropped up with very reasonable fees. Average fee per return is just Rs. 300 to 600 per month. This is very reasonable and affordable even for small businessmen.

Hence, the contention that small businessmen are suffering due to GST and filing of returns is a head ache is totally wrong and agenda driven.

Opposition leaders are saying that traders are under distress due to GST implementation. I meet a lot of businessmen and traders on a day to day basis. However, none has ever complained about GST. Problems of small traders due to GST are figment of the imagination of journalists, economists and opposition leaders.

 

Further, there are lot of compliances for most factory owners. The first and foremost being getting pollution control certification. Earlier, one had to go to the relevant office, get the forms, fill them and submit them with a demand draft. Then they would visit for inspection, expect something in return when the certificate was ready! Now, this time, I had to fill the form on their website, pay the fees by credit card / bank transfer and the certificate came by e-mail and that too for 5 years! If this is not ease of business, what is!

Every business has to pay various things like ESI, PF etc. Now this too is online along with the returns.

Forming a company results in you automatically getting PAN, TAN etc. within 2 days. Hasn’t this made life easy for businessmen?

 

In case of exports, earlier proof of exports had to be submitted to the excise dept who would disallow the same in case of late submission. Now, one just has to mention the shipping bill no. in the GST return, eliminating the need for providing hard copies to the excise dept.

As against the hullabaloo of jobless growth, on the contrary it is the reverse, there is a paucity of good people. It is next to impossible to get good quality skilled workers. As against this, the number of fresh Engineers inquiring for jobs is huge. Hence, the problem right now is that people are overqualified. 20 years back, there were ITIs looking for jobs, then there were diplomas who were asking for jobs and now its qualified Engineers who are looking for jobs. Most engineers are not ready to work with their hands and want jobs which involve checking and working on the computer. Now the problem is that there are jobs but not the right candidates.

Does this mean, everything is hunky dory and there are no problems? Of course, businessmen suffer a lot but there life has certainly improved due to the various initiatives of the Modi government. Below is a wish list on behalf of small businessmen –

  1. In case customers don’t pay, it’s a huge loss for the business who has spent time, money and taxes on manufacturing. Making it compulsory for customers to pay and penalizing willful defaulters should be the next step of reforms for the 2nd term of Modi Government.
  2. The number of returns, other than GST i.e. ESI / PF / Factory Act etc. is huge. Can’t these be eliminated in some way and making self-declaration mandatory, especially for smaller businessmen having turnovers upto say 25 crores.
  3. As mentioned above, getting good employees is a problem and Modi government’s Skill India initiative is the most appropriate but needs to be made more popular.
  4. Number of audits and scrutinies should be reduced and preferably eliminated at least for small businesses who do not have the infrastructure and people to complete all such things.
  5. Payment of toll is a pain, not for the expense but for the time which goes in the line. Can’t there be a single toll for a complete stretch. In China, one gets on the expressway and there are no obstructions and toll is applicable when one exits the expressway. Depending upon where one gets out, toll is applicable. Not a difficult system to implement!
  6. Inflation is a huge problem as customers do not increase prices and costs keep on rising. Reducing subsidies and further reducing the fiscal deficit would go a long way in helping out businesses.
  7. The government should not get into providing minimum income guarantee as it will eliminate the urge to work, resulting in increase in wages and Indian products being uncompetitive.
  8. The government should also work towards increasing the strength of the Rupee. Economists as well as IMF talks about depreciating the currency to increase export competitiveness but it is not so. Most input materials are related to global rates and any depreciation in the currency results in increase in input costs. Even being a net exporter, I am for Rupee appreciation. An appreciating currency will result in reduction in costs and prices.

With this, I appeal to all to vote for the Modi government.

- advertisement -

  Support Us  

OpIndia is not rich like the mainstream media. Even a small contribution by you will help us keep running. Consider making a voluntary payment.

Trending now

monishs
Monish Shete is the CEO of Elscint Automation, a leading manufacturer of vibratory bowl feeders, part feeders and small part handling products in India. He has almost 3 decades of experience, with the last 20 years being with Elscint. Since joining Elscint, he has consciously shifted the focus of Elscint towards exports and now more than 50% of Elscint's revenues.

Latest News

George Floyd, another forgotten soul

Everybody worried about and discussing the riots in multiple cities, looting of designer stores, rioting the streets. In all these noises, George Floyd is shouting “I can't breathe, please save me”

Is Trump right to take China on?

Trump has gone ballistic. His bellicose utterances are typically reflective of America First retinue. Would he stay the course? Or he has raised a feverish pitch, so that he can negotiate a sweet trade deal with China, just in time for Nov, 2020 elections.

The one way secularism and why tolerance is it’s necessary evil

So, Indians' tolerance level is directly proportionate to the govt they elect. If they want to be tolerant, they will elect a non BJP govt., if they want to decrease, they will elect Modi govt!

The politics and commerce of anti-Hindu content in mass media

In the past few years in India, we have come across an unusual situation where a number of mass media outlets seem to be “two timers” as in one branch of the organization will support the nationalist narrative and the other will support the leftist narrative.

कोरोना की यात्रा और कोरोना के बाद की यात्रा

सकारात्मक खबर के बावजूद अभी भी कई चुनौतियां बना हुआ है जैसे-अप्रवासी मजदूर के समुचित खाने की व्यवस्था, बन्द पड़े शिक्षण संस्थान में पढ़ाई शुरू करने की चुनौती, कोरॉना के बाद अर्थवयवस्था के पुनरुद्धार की चुनौती, साथ वैक्सीन बनने की चुनौती, भविष्य में प्रसार रोकते हुए जनजीवन सामान्य बनाने की चुनौतीl

The one difference between the Congress of today and that of before 2014

For the sake of the future generations, for the sake of our children, please read more books about how Congress had been ruling the country and be aware of the dangers.

Recently Popular

MNS bares its anti-Hindu fangs

Raj Thackeray’s haphazard attempt to relaunch his party as Hindu outfit has failed, leading to desperation and cheap politics.

साउथ कोरिया में संघ जरूरी क्यों

मैं विग़त 8 महीनो से साउथ कोरिया में रह रहा हूँ। यहाँ भारतीय लोगों की संख्या क़रीब 13 हज़ार हैं। पर एच॰एस॰एस न होने के आभाव में मैंने महसूस किया है, कि भारतीय लोग संगठित नहीं हैं। और संगठित नहीं होने के कारण लोग अपनी संस्कृति से दूर जा रहे हैं।

The one difference between the Congress of today and that of before 2014

For the sake of the future generations, for the sake of our children, please read more books about how Congress had been ruling the country and be aware of the dangers.

In conversation with Nehru: On Savarkar’s mercy petitions

This conversation is only an attempt to present the comparative study of jail terms served by both Savarkar and Jawaharlal Nehru.

भगवान श्रीराम का वनवास जो 500 वर्षों के बाद समाप्त हुआ: श्रीराम मंदिर निर्माण की अनंत कथा

अंततः श्रीराम विजयी हुए, भारतवर्ष विजयी हुआ, हिन्दू विजयी हुए और इस संघर्ष में दिए गए सहस्त्रों बलिदान सार्थक हुए।