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I tried starting a manufacturing unit in India (2020)

superr.in

11–20 of 456 posts

Re: I tried starting a manufacturing unit in India (2020)

#11
post #6

> Yes, you need to obtain “permission” before you build any manufacturing structure on your own land with your own money. This permission is called the NA or Non-Agricultural Certificate. Well, I though it was this way everywhere in the world. In Europe, at least, you cannot build anything on agricultural land unless it is a n agricultural structure or you get the classification changed, which is not easy.

The idea itself is sound and reasonable. If you let people built wherever you'll find yourself out of arable land in an instant.

What seems overly complex and inefficient is the amount of permissions and the subpermissions.

Even to my German bueorcracy adjusted ears this sounds like a great way to extract bribes and fees. At least the process here is quite clear (but not always fast)

Re: I tried starting a manufacturing unit in India (2020)

#13

India's obsession with paperwork is unceasing and baffling. Everything requires an application, even when everything can be done digitally. You need letters and stamps to get anything done. Case in point: the "company stamps" that are required for everything you do with your business. From getting a debit card to changing the maturity instructions for a corporate deposit, you need to sign your name AND stamp it with…

Countries with high paperwork and bureaucratic burden are famous for also being highly corrupt. This is probably not a coincidence. Likely all the excess paperwork makes it easier to hide what's really going on, easy to provide roadblocks for those who don't pay, and easier to generally hide bad activity in a sea of noise.

[deleted]

Re: I tried starting a manufacturing unit in India (2020)

#14

India's obsession with paperwork is unceasing and baffling. Everything requires an application, even when everything can be done digitally. You need letters and stamps to get anything done. Case in point: the "company stamps" that are required for everything you do with your business. From getting a debit card to changing the maturity instructions for a corporate deposit, you need to sign your name AND stamp it with…

dude. unless you are doing some space age shit or something, you don't need to set up a company in india to do business. sure the whole "limited liability" and that but in reality that is just a smokescreen.

just use your personal pan card to open a bank account, get a GST registration, do income tax audit and you will be done. No compliance, no nothing.

i do taxes and books for businesses with 250+ Crore turnover and they are all sole proprietorships. Why? the simple answer is why bother? you can have all the employees,all the corporate hierarchy and still be a proprietorship...

One part of the problem is all the professionals milking companies for "compliance management fees" but in the end of the day, my suggestion to businesses is unless you REALLY REALLY need a company, please don't bother

Re: I tried starting a manufacturing unit in India (2020)

#15
post #4

If building something on agricultural land is hard, it is good: it is called agricultural for a reason. Maybe buying a parcel of industrial or commercial land would have ended up cheaper?

Author of the article here:

All the land in India is agricultural by default. Except in some desert states.

Re: I tried starting a manufacturing unit in India (2020)

#16
While this post is specifically about a manufacturing unit and usually will involve land, acquisition (if not already), NOCs (as shown in the post). This is standard and can / should / would be done digitally in near future, once all the units and officials have the awareness.

To offer an alternative, starting business in India is extremely easy (at least Software Business), People have been running a business, filing GST, owning trademarks without leaving their apartment - Thanks to online services which ease these things. But yes, things are still difficult for manufacturing and land related things (and I assume it would be similar in other parts of the world, granted not so difficult).

Re: I tried starting a manufacturing unit in India (2020)

#17

India's obsession with paperwork is unceasing and baffling. Everything requires an application, even when everything can be done digitally. You need letters and stamps to get anything done. Case in point: the "company stamps" that are required for everything you do with your business. From getting a debit card to changing the maturity instructions for a corporate deposit, you need to sign your name AND stamp it with…

I remember buying a train ticket in Goa. This involved showing the passport and filling out multiple forms. It was pretty crazy.

Re: I tried starting a manufacturing unit in India (2020)

#18
It seems like the problem is that the author has a moral objection to paying bribes in an area where bribery is customary:

> Obviously, they are playing “hard to get” to get me to pay some bribe and initiate the process. But after going through all this, I am not going to pay any bribe to anyone.

And:

> And they openly demanded bribes after waiting for four months.

> So the Gram Panchayat NOC is stuck because of non payment of bribe.

Re: I tried starting a manufacturing unit in India (2020)

#20
post #2

(from August 2020, FWIW) I wonder what it would take to digitize this whole process, so that a single application can trigger all the relevant approval requests, and the overall status can be tracked -- both by the applicant, and at the systemic level to see whether certain departments become (cough) bottlenecks.

The biggest bottleneck is the power sharing between Central, State and local Govts with the judiciary acting as its own entity sometimes. By design a lot of entities would not want to cede power and control. This has been happening with the implementation of Goods and Service Tax (GST) in India which was considered politically unfeasible as recently as 10 years back
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