Calling for a complete overhaul of the factory inspection system, the industry body Confederation of Indian Industry (CII) has said that the excessive number of inspections in India weighs down on the competitive advantage and the 'ease of doing business' of Indian businesses. It said that system needs a complete overhaul to bring India among the top 50 countries in terms of 'ease of doing business' in the next two years.
The industry body in its white paper titled 'Inspections and Regulatory Enforcements for Micro Small and Medium Enterprises (MSMEs) in India' pointed that a manufacturing company in India has to comply with around 70 laws and regulations. It further said that 40 inspectors and government officials visit factories on an average “with the ulterior motive to fleece the company promoters and owners.
The white paper furthers stated that inspections in India have been found to be excessive, duplicate and complicated, imposing significant costs on businesses, especially MSMEs,” the paper noted. While most inspections are selected locally, “without any objective criteria”, inspectors act “over-zealously” and make “extortionist demands from factories,gaming companies leverage the benefits of speed, efficiency aligned with its testing and development goals.
CII while urging the central government to encourage the states to pursue a process for simplification of labour laws and compliance, called for an integrated inspection system and emphasized on need to inculcate a risk-based approach in the inspection system which will rationalise the number of inspections and weed out the redundancy and duplicity.