Economic Survey 2020: It is easier to get a gun in India than starting a restaurant

The Economic Survey 2020, released on Friday, highlighted the need for rationalisation of regulatory hurdles to start a business in India.

Setting up and operating services or manufacturing businesses in India faces a maze of laws, rules and regulations.

“Many of these are local requirements, such as burdensome documentation for police clearance to open a restaurant. This must be cleaned up and rationalised one segment at a time,” the Survey document said.

The survey showed that the number of licenses required to open a restaurant in India are significantly more than elsewhere.

While China and Singapore require only four licenses, India requires several more mandatory licenses and approvals.

According to the National Restaurants Association of India (NRAI), a total of 36 approvals are required to open a restaurant in Bengaluru, Delhi requires 26, and Mumbai 22. Moreover, Delhi and Kolkata also require a ‘Police Eating House License’.

“The number of documents needed to obtain this licence from Delhi Police is 45 – far more than the number of documents required for a licence to procure new arms and major fireworks, 19 and 12 respectively,” the Survey said.

The services sector faces many regulatory hurdles even for routine businesses. Bars and restaurants sector is an important source of employment and growth everywhere in the world. It is also a business that, by its nature, faces a high frequency of starting new businesses and shutting old ones, it added.