[avishar]

It's a story that we have heard many times and a lot of us has experienced it first hand. The story is about the monster called Indian bureaucracy and how its only purpose in life is to make things as difficult as it can get.

This young man wanted to start a manufacturing unit in a small town in Maharashtra. This is exactly what we want manufacturing jobs in smaller towns. That's what he though too, but soon he was buried in mountains of paperwork, NOCs, bribes, fees and running from pillar to post.

While I am sure that the "Ease of Doing Business" has certainly improved in India over the years - a lot of paperwork has been condensed, digitised, approved fast - but "Ease of Doing Business" in India is not single standard which can be applied everywhere. It depends a lot on how corrupt your local councillors are, the level of digitisation changes from district to district, what is one's political connections and how deep is one's pockets.

And usually the segment which finds itself the worst affected are the small- scale and medium-scale enterprises, which incidentally create the bulk of the manufacturing jobs. From lack of ease of getting capital to archaic laws and complicated taxations, the MSMEs are usually the most ignored lot.

I wonder how can we ever improve.


Here is the blog entry, it has been doing the rounds of twitter and has been getting a lot of eyeballs.

I tried starting a manufacturing unit in India…

So this is the story of me trying to start a manufacturing unit in India…

Quick facts:
Land Size: 3 Acres OR 1,20,000 sq.ft.
Factory Shed / Warehouse Building.
State: Maharashtra
District: Sangli

Do note that, Maharashtra state is considered to be one of the most liberal and best states in terms of “ease of doing business” in India.

I started the process around November 2019. It’s been more than 9 months and I am still at least 4 months away from getting the permission that allows me to construct anything on my agricultural land.

The NA Permission
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.

So let’s get this certificate!

To get that, I went to the Sangli District Administration Office. The building looks quite good.

A photo of Sangli District Collector Office
Collector Office, Sangli
After asking around a bit, I was told that I could get the NA permission from the “Revenue Department” office.

And so I went there.

There I was told to get a list of documents.

Level 1 – The Application:
Documents Required:

7/12
8A
Affidavit (Self)
Application Form (Self)
All Land Records Since 1950 (Tahshildar Office)
Official Plot Map (Gat Nakasha)
9/3 – 9/4 (Document showing ownership of land and other details as on 1950)
The first two documents are available online and easy to get. The 3rd and 4th documents were also easy as the format was already available, I just had to fill them up and sign on them.

The last three documents were not easy to get. It took me more than 3 months and 2000 Rs in legal fees and more than 20 visits to different offices more than 10 kms apart.

But I finally got them. I thought this was it. I was now going to get the prestigious NA certificate.

And so I bought a file and filed all these papers in it and went to the “Revenue Department” Office.

I submitted the file. And was told that the application will be reviewed, discussed in a meeting and then if the application is approved, the procedure for NA-ing the land could be started.

After about a month, I got a call from the Revenue Department asking to visit them for further procedure.

There I was handed a letter, addressing 11 different departments and asking those departments to give me a NOC (No Objection Certificate). I was told to get all the 11 NOC’s by showing this letter to each department and any other additional documents they might ask.

Level 2 – The 11 NOCs:
Actually, there are more than 13 NOC’s required to be obtained but this letter only mentions 11 of them.

After applying to each of these places, they give their own list of documents which require one or two more NOC’s each.

The letter from the Collector Office addressing 11 departments to grant me No Objection Certificates to start a manufacturing unit.

• Public Works Department
• MahaVitaran
• Gram Panchayat NOC
• Clear Land of Any Transmission Lines
• MahaTransco
• Irrigation Department
• Gram Panchayat NOC
• Pay the Irrigation Tax – 1,89,000 Per Hectare
• Map showing distance from nearest River
• Legal Form showing the Agreement by Adjoining Farm Land Holders
• Health Department, Zilla Parishad
• Gram Panchayat NOC
• Primary Health Center NOC
• Forest Department
• MIDC
• Business Center
• Maharashtra Pollution Control Board
• Tehshildar (Taluka)
• Town Planning Department
• Gram Panchayat NOC
• MSEB NOC
• Building Plan – Layout
• Mojni Nakasha (90 days)
• Legal Form showing the Agreement by Adjoining Farm Land Holders

Okay cool. I said to myself. After 4 months, all I had to do was to take this letter to each of these offices (after finding their address, located somewhere in the district) and then get their letter. Easy peasy, I thought.

But no! Once I reached the first “PWD” office, they gave me a list of documents required by them to grant me NOC.

And so did MahaVitaran. And Mahatransco. And the Irrigation Department…!

1. The PWD NOC
I understand the reasoning behind the need for a PWD NOC. What if they’re planning to build a road through the land on which we intend to do our construction. It’s certainly worth notifying the public works department before we do any construction activity.

And the PWD NOC was easy to get. It took more than 4 months but no one asked for any bribe nor did anyone ask for any extravagant documents or signatures.

I have no problem with this one.

2. Mahavitaran NOC
Again, Mahavitaran is the Maharashtra state owned company. It owns the low-tension electricity transmission lines which provides electricity to houses, commercial spaces and farms. (Not industries).

The requirement for the Mahavitaran NOC is that “if” there are any lines going through the farm land, then the land owner must get them removed. I also agree with this idea.

Even though removing these lines cost a lot, it is an important step for safety. So again, not a problem.

3. MahaTransco NOC

Again Mahatransco is the same as Mahavitaran except that it provides high-tension electricity transmission for industrial use.

But there’s a problem here.

If there are no high-tension lines, as is the case in our land, a self-declaration by the farm owner that there is no Mahatransco line should be sufficient.

The problem I face:

I applied for NOC. They came and checked. Their person signed and wrote that there is no Mahatransco line. And then they gave me that paper and asked me to get signatures from two village authorities. The Talathi and The Circle Officer.

And both of them denied it.

And that’s it.

Mahatransco would not accept it without the signatures. And these two people would not sign it at any cost.

What should a mere mortal with no government or political connections do about this?!

And that’s it. Stuck there forever.

4. Irrigation NOC
Documents required by irrigation department to grant a No Objection Certificate
Not only do they need 11 documents, each of which requires almost a month to obtain, they also want us to pay Rupees 2,89,000 (That is more than twice the Average Per Capita National Income of India ~1,35,000) “because” our land falls within the area served by a canal from the Irrigation Department.

Now, to begin with, Indian farmers don’t pay for electricity and water. So they just keep the Switch for the water pump turned ON always. Whenever electricity is available, the water keeps getting pumped into the farm, flooding the farm with unnecessary water.

Anyway, let’s assume that I don’t care at all about the water and electricity being wasted by the farmers.

All I care about is that I should get a water and an electricity connection and I should be billed at whatever price that prevails and I will pay the bill.

But no. Someone is taking the pain to setup a manufacturing unit. Someone is taking the pain to provide employment. “So let’s just milk out as much as we can from this person so that we can continue giving free things to these “majority” farmers and keep getting elected.”


5. Health Department, Zilla Parishad NOC

Why do you need the health department’s “permission” to start a manufacturing unit on your land? Well maybe because the government is interested in creating as many hurdles as possible so that these “public servants” can milk as much money as possible from the fool who wants to start a business and create employment.

Also, they gave me a list of documents. These documents were to be uploaded on to a website. And as always, the website doesn’t work.

So it’s stuck because the website isn’t working.

6. Forest Department NOC
No problem.

7. MIDC NOC
MIDC NOC is understandable. They procure land and offer it for cheap prices for manufacturing purposes. Therefore it is necessary to confirm that the land on which you are building is not a part of any upcoming MIDC project.

And the process was fast here. No one asked for any bribes. So I have no problem with this one.

8. Udhyog Kendra NOC
This office was created to facilitate the creation of business capacity in the district. But now it just adds to the burden by being in the list of barriers to be completed before you can start a business.

But fortunately I got it with one application and within one week, so it should just be removed anyway.

9. MPCB NOC
Got it within a few days without the need of any documents. And it’s the Pollution Control Board, which is necessary to save the environment. So I am fine with it. As long as it’s fast.

10. Tahsildar NOC
Applied for this NOC in the Tahshildar Office at Miraj. No response. No letter. No communication. And no person is willing to talk about what one should do next.

It’s been more than 4 months. Just total silence.

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.

So, it’s just stuck there. Been more than 4 months.

11. Town Planning Department NOC

This is one of the most important NOC according to many experienced “agents” who have been in this N.A. game. A lot of money needs to be sprinkled for this NOC or they can delay your project infinitely.

They require the following documents:

Gram Panchayat NOC
MSEB (Mahavitaran NOC)
Land Counting Map (Mojani Nakasha)
Land Co-holders Affidavit
12. Gram Panchayat.
So as this is a requirement in almost all the NOC’s mentioned above, I went and applied for the Gram Panchayat NOC.

And they openly demanded bribes after waiting for four months.

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

And many other NOC’s depend on the Gram Panchayat NOC, so they are stuck too.

And this is how, ladies and gentlemen, brother and sisters, India will treat you if you try starting a small manufacturing unit to create jobs, useful products and prosperity for yourself and a few others.

It’s been more than 9 months, I went from one office to another. From one Taluka to another, most of the times to find out that the concerned person has decided to stay at home that day.

The office in the village, the “chavdi” as it is called in Marathi runs on the whims of one person and this one person could appear at the office any day and disappear any day. All you can do is sit and wait till the evening and “hope” that this person arrives before 6 PM.

So what next?
Well, I have found out that the law governing these rules is based in the “Maharastra State Land Revenue Code”. I will try to challenge this process in the court as well as protest for change so any one could start or construct anything of their choice on their land without much delay.

My request to you is join me in this mission to really make India a place where Businesses come up like weeds grow on fertile land. Currently even though there is a lot of aspiration in the people and lot of people want to start something, laws like these act as a concrete layer on fertile land to completely halt any entrepreneurial willpower in the rural and the poor people of India.

[ABHI_1512]

'Ease of doing business'- the term itself is a misnomer in India. I personally know of folks who have faced the brunt of the official-dom while either setting up or after setting up some business. The amount of frustration and harassment one goes through is to be seen to be believed. What more indictment one needs when a group as big as VW says something like this-

https://www.moneycontrol.com/news/bu...d-5680271.html

[airbus]

Saw this tweet from Arun Mukherjee, whom I follow for investments:

[avishar]

So Rohan (the promoter) updates on Twitter that he has been called by everyone of those departments and files will move faster.

https://mobile.twitter.com/mrohansha...33531200155648

Update update:

I have recd a call from almost all concerned departments and they have promised to finish this very very fast.
I will keep updating about all the stuff, people who made this happen, etc. Currently busy visiting the offices.
Thank every one for everything.
(1/2)

On Twitter and in other discussion boards, there is different train of thought going on.

Which is this that this is not unusual and actually the bare minimum amount of paperwork needed. Many are advising that the mistake was so try and convert agricultural land into non-agricultural land and such a process will take many months at any location across the world.

Infact I read a comment that the paperwork is going along at "too fast" a pace and stuff like forest clearance should not have been given without proper survey.

The story has been picked by loads of Social Media friendly industry heads so it's getting a lot of traction. Some have even asked this fellow to forget about MH and move to Telengana or Karnataka where approvals are apparently given out much faster.

[AZT]

Originally Posted by avishar

The story is about the monster called Indian bureaucracy and how its only purpose in life is to make things as difficult as it can get.

Thanks for sharing. My best friend is a builder and he was telling me how there is no way around unless you bribe, there are so many approvals required and even one of those offices has the power to delay your project indefinitely. This is probably why there is no incentive for bureaucrats to cut the red tape, they are the biggest beneficiaries.

I hope this goes viral and we remove some redundant regulations in place now.

[Dieseltuned]

This is in Stark contrast to what the government keeps publishing on the ease of doing business. The ground reality is cash rules. Also got me thinking how the big corporates manage this process ? Do they have designated 'agents' and do they also resort to bribing as many corporates also browbeat about ethical practices.

[pratmitt]

For now, the post has been removed from the link. I think him openly saying that Panchayat asks for bribe was the part they wanted removed.

[AtheK]

Atamanirbhar India and make in India, sounds like a joke when you read all this. How do they plan to compete with china, with such ways probably we will compete with them maybe after 100 years from now. It's easy to come and speak out aloud in front of a camera.

Sorry to hear about the ordeal your friend had to go through and still continue to endure.

[wildsdi5530]

Having started a consultation chamber at my home in Bangalore in Jan 2020, I also had to face all these issues. I was not ready to pay any more than the minimum bribes requires.

1. Commercial tax paid
2. Got the electricity wiring for the room changed and got a separate meter from the BESCOM. Had to pay the requisite bribes.
3. Applied for trade license and was rejected by the health officer who didn't have the courtesy to visit me for the bribe but had mentioned on the rejection that the health officer had to be contacted. Instead contacted the medical officer who is his superior and got it cleared. Still to be issued the certificate though.
4. Had to get Biomedical waste disposal services though the only waste I might possibly generate is paper. Got the minimum subscription at Rs. 750/- per month.
5. Clearance from PCB - Pollution control board. First visit was sent back to get more documents. 2nd visit got cleared after some shouting.
6. Fire safety - Didn't get it, Is it a joke?
7. The moment the board came up, BWSSB Water and sewage board, doubled my water bill citing commercial rates. Had to take him on a tour of my chamber showing him that no water point was there. And then to explain how no sewage is generated.
8. KPME - Karnataka private medical establishments act - supposedly online and easy to get. Applied in Jan where all documents submitted and design done. No progress at all. Even mails to the respective officers have yielded no results. They really want my Rs. 2500/-.
However the upside is that since I'm not registered, the govt cannot harass me saying that they will cancel my KPME like they have done for 60% of medical establishments in Bangalore during the COVID19.

Lot of other clearances required - 48 in toto for clinic and ~150 for a hospital. But these are the basic ones. All this to have a board at my house declaring that I will consult patients from my arm chair. And more than half of these are free patients so there is really no profit motive involved.

In Tamil Nadu, where I had a clinic with 4 beds and day care facilities, they didn't demand a single thing. The JE said that I don't even need to pay commercial rates since I saw a lot of patients for free. Of course this was 10 years ago.

[interest]

The ease of doing business rankings are a combination of several parameters such as- getting electricity, paying taxes, registering property, enforcing contracts, getting credit etc. India's rank has improved in some of the parameters quite significantly such as getting electricity (rank 22 in the world), protecting minority investors (rank 13 in the world) or securing construction permits (rank 28). Where it is abysmally low is - registering property (rank 154 in the world), paying taxes (rank 115), enforcing contracts (rank 163). The above mentioned incident is very much in line with the rankings of these parameters.

https://www.doingbusiness.org/en/rankings


I have been in infrastructure sector for more than a decade and as you can imagine, land, contracts and taxes are a fundamental aspect of an infrastructure project (road/power plant etc). All I can say is that it is enough to drive you crazy. you may have a 7-8 yr old well functioning power plant but the title of the land on which it is built still has defects (i.e. formalities left). This is the case simply because the state level system does not move. Land digitisation hasn't happened. What is laughable is that registration of a sale deed does not mean that you are the undisputed owner of the land (unlike in most of the countries). Your ownership can be brought into question depending on how the title of the land has changed hands during past 20-30yrs. Every time you buy land, you have to look at 30yrs of title data (lender's lawyers typically do this before lending to an infrastructure project) unlike in other geographies. I am currently financing a solar project in Malaysia and it is such a smooth interaction regarding land (Malaysia ranks 33 on registering property)

[v1p3r]

Govt has finally woken up and reacted. Babus are busy scrambling. Post has been taken down.

All of this is SOP. Or SNAFU, depending on your perspective.

[anjan_c2007]

Harrowing to read ! Can sense what the enterpreneur goes through. The so many slogans coined by our rulers including massive improvements in the "ease of doing business", granting "single window clearance", "all-round & multi-sectoral reform push", "boost to investment sentiment", "speed at which reforms have been happening"," bold reform measures including Goods and Services Tax, Insolvency and Bankruptcy Code, digital drive and involvement of states in faster clearance of projects" and more remain just slogans uttered by the policy makers and their yes-men for media consumption to only befool the public.

Mr Irfan Razack's speech extract from September 2015, but nothing appears to have perceptibly changed !

“Ease of doing business is still a slogan,” said Irfan Razack, CMD, Prestige Group of Companies, here today.

Speaking after receiving Sir M Visvesvaraya Memorial Award of the Federation of Karnataka Chambers of Commerce & Industry (FKCCI), Razack said, “Governments and individuals in influential positions should be enablers for economic growth and help drive economic growth.”

Else, can we explain the post-Corona flight of capital of MNC's out of China to destinations like Taiwan, Malaysia, Vietnam, Indonesia and Thailand, preferring them all over India. We have had several conclaves and think-tank committees of experts to attract investments here lately, during the "Corona-China investment allergy" by MNC's, preferring India to China but the success rate to attract capital here is abysmal.

Quoting from a recent blog in intouch-quality.com, stating about disadvantages of sourcing from India

Another concern for India is its large geographic size and relatively decentralized governance system, which can complicate business dealings. Sourcing from different regions in India could bring very different concerns, legal requirements and challenges.
For instance, working conditions are known to be generally worse for informal workers in northern India than southern India. This difference has implications for social compliance, especially if you’re distributing through major retailers and expect an official supplier audit.

This complicated business environment is reflected in India’s lower rank compare to China in ease of doing business. India also ranks lower than all four other MITI-V countries by this metric. Enforcing contracts remains a particular concern where India lags far behind China in the time and fees required for resolving disputes in court. India also ranks below many of its competitors in Southeast Asia, including Thailand, Vietnam and Malaysia.

India did introduce some reforms in 2018 that will make trading easier. These reforms included implementing electronic container sealing, upgrading port infrastructure and allowing electronic submission of supporting documents with digital signatures.

[AkMar]

Now there is an update on the link

It has been bought to my attention that there was a mistake by an entry level employee.

So the Revenue Department itself was supposed to get all the NOCs required by going to all those offices, but an entry level employee forgot to add my file to the list of NA’s to be done.

So now I have been told that all the NOC’s will be taken care of by the Revenue Department, Collector Office.

If any legal fees need to be paid, I will be informed by the Collector office (without me requiring to go to every office) and everything will be done in less than 2 months.

I am thankful to everyone for sharing my experience far and wide. But now my experience stands cleared and so does this post.

A lot of people have helped reach this post to very very high-in-the-hierarchy people in the state and central government as well as major national political parties. I am really very thankful to everyone.

[libranof1987]

This part from the post had me going l-o-l.

It has been bought to my attention that there was a mistake by an entry level employee.

So the Revenue Department itself was supposed to get all the NOCs required by going to all those offices, but an entry level employee forgot to add my file to the list of NA’s to be done.

So now I have been told that all the NOC’s will be taken care of by the Revenue Department, Collector Office.

Like, seriously?! It is almost impossible to imagine that this fellow did not raise a stink right at the Revenue Dept.'s office about the circus he was made to go through. At no point during this entire ordeal did anyone from any of the several Depts. he went get surprised at this fellow, and not an official from the Revenue Dept., being the one asking for a NOC?!

I'm happy that social media helped him get his work done, legally and by process. I also understand that this message might be requested/ordered by someone from the "State" since the work was now being done swiftly. We see the same on our forum as well where settlements are bound by confidentiality.

My skepticism remains on whether this will actually change anything in these offices and someone will be forced to run around until they can get some attention on social media / bribe / some pull through "contacts".

"Mistake by an entry level employee". C'mon dude, we're adults, we can handle the truth.

[Cessna182]

I am curious about the procedures for getting a factory space in the ready made industrial estates in different states. The spaces are advertised online as having electric and water connections built in, and one has to submit a proposal to be evaluated following which one can get the rights to rent the space. Is this true, or does one have to waste a similar amount of time in permits etc even for that?

Off topic: most government employees in India are just bureaucrats with very little value addition to the economy. I wish that the Govts recruit more teachers, doctors, engineers, scientists rather than these paper hoarding folks who impede our progress. Govt jobs should be restricted to the productive occupations, not these obsolete bureaucratic procedures. Unfortunately, there are fewer professors and scientists in India, than highly paid paper hoarders with no constructive purpose.