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Manufacturing companies in India may now be required to comply with over 2000 compliances under the various laws and regulations, including approvals and filings, as were told by the industry lobby group Ficci to the Union government functionaries ahead of the Union Budget. This would not only be time consuming but will also be adding to the cost of manufacture.
Statistics show that maximum compliances under both the Central and state Laws would be required under the Companies Act with a figure of 287 compliances to be done. Next SEBI and SCRA with 125, under the Factories Act 112, FEMA and Income Tax Act accounting to 91 compliances, Foreign Trade Act with 59 and so on. The issue had been flagged before the Finance Minister , Nirmala Sitharaman before the Pre-Budget Sessions. Officials from the department for promotion and industry and internal trade were directed to look into the issue.
However studies suggests that not all manufacturing companies shall be required to do with all the compliances such as a company engaged in the food and manufacturing sector may have to comply with the food and safety standards but now with those compliances that are applicable to engineering sectors. Companies have to look after compliances, filings and approvals under all the Environmental Laws, Labor Laws, GST, Companies Act, etc.
Quoting the words of Sandeep Somany, Vice-President and MD of sanitary products company Hindware , who recently completed his term as the vice-president of FICCI said, “ The process can be streamlined as businesses need to go to agencies multiple times.” He also pointed out that several environmental clearances are required to be obtained under various laws as adding the example of pharmaceuticals and food processing sector companies with Pan-India operations which may have to obtain several more compliances.
An official added that the idea over the years had been to reduce compliances and move towards a system of self-certification pointing out that the government has been looking to the need to do away with the need of renewal of several licenses.
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