I tried starting a manufacturing unit in India (2020)
superr.in
superr.in
One of the worst business-decisions of my life. The amount of red tape, stupid rules, corruption, signatures, stamps, showing up physically in a certain office etc etc... Mindblowing.
I will not tire you with all the details, but to this day, Indian tax authorities still hold money hostage, that they agree my Indian company is owed (GST refunds). But all attempts to actually get the money back falls on deaf ears. We have sent experts to the relevant tax offices etc, but the ONLY guy who can handle it is never there, refuses to deal with it, then says we need to go somewhere else - where we are sent back etc etc. Sent around in circles, basically - with everybody recognizing the money is in fact owed...
I will never do business in India again. Happy to work with Indian developers (I still do), but they will get paid as freelancers and deal with the red tape on their end.
5 years later, I'm yet to receive the refunds. First, they said that they were authorized to only sanction refunds for exporters of physical goods and then they said that this is handled by the State government, who said that it was handled by the Central. Finally Central accepted that they are in-charge of the refund, but by then COVID happened and I could not follow up for 2 years. In May, when I tried to claim the refund again, they said that this refund pertains to 2016 and it's difficult to "reopen" the accounts for that year and that's handled by yet another department. So, they have written to them to ask for the process. No replies after two emails. Story continues...
India’s legal systems and the enforcement of laws are one of the biggest drags on a country with immense potential.
I had to apply for Foreign Export of Services Certificate as well which turned out to be the PAN number.
They also made it impossible for services exporters to claim GST back on business expenses.
Do not set up a legal entity in India. It will become a never-ending void where money and time go to die. The bureaucracy is hilariously inept and bloated, and if you are not willing to pay the bribes or for some entity to navigate the systemic corruption on your behalf, you will end up in OP's situation.
Source: hired many Indian developers in recent years for a SV startup
It's very easy to read these requirements and agree that there are natural resources that (a) you don't want exploited and (b) want preserved, so all of these hurdles are necessary. But the timeline involved and the MULTIPLE bribes really drives home the fact that reforms are needed.
Edit: sorry, one person openly asked for a bribe, the Panchayat. I would like to understand more about this. Do they just ask for an amount?
Driving license is another. You'll see tens of touts in and around the govt office; you pay about INR 2-3K and get your drivers' license. Again, a tout/agent will handle it for you end to end.
Both are very well oiled machine; money goes all the way up to politicians. Getting a posting in those offices in turn requires millions of rupees of bribe, besides influence, caste angle etc.,
Speaking from personal experience.
Baksheesh, whereby people expect a tip ahead of time if you want decent service, is quite common in India and is essentially another form of corruption, especially when practiced by police, bureaucrats, etc.
Also, political parties are mostly funded by bribery, and rely on literally buying the votes of villagers to maintain power. Any political entity with the power to actually tackle corruption would have little incentive to do so.
I am curious to know how the Stripe Atlas-like services from razorpay.com and clear.in have worked out for folks here in dealing with govt-facing work?
Not only the ease of doing business is non-existent but also the entire running the company's operations is exhaustive and riddled with inconsistencies regulations. Plus, the amount of reporting required to stay compliant is never ending.
Every month you will have to file for multiple GST reports, then file quarterly GST reports again to reconcile. On the other hand, file for quarterly advance tax, then finally file for annual income tax. To top it of, GST rules changes so frequently that the entire book keeping process becomes complex & convoluted.
You will end up spending more time in keeping all the things in check with the regulation instead of spending time on growing the business itself.
It seems that whenever there's red tape, there's a business opportunity in paving over it and providing a sane interface on top of it instead.
Before this hiring internationally was a pure nightmare to the point that we simply didn’t accept international remote developers.
Thanks Remote!
In my experience, it added just enough of a layer of obscuration to perpetuate a caste system, similar to how full time temps and vendors are currently treated in tech. US FTE employees had full HR support while Indian subcontractors had really poor HR/payroll/benefits resources from Remote. YMMV
They have a much better understanding of my local laws, tax systems etc than the US-based HR and Payroll departments at companies I’ve worked for in the past.
They're hiring freelancers as employees, and take care of all the invoicing and tax stuff for them. The freelancers can focus on their craft as if they were employees, with no loss in autonomy.
- Have a local point of contact. If you are not Indian yourself or at least of Indian Origin, you will need to have a good local contact ideally your lead tech. who can be part of the entity
- Find a good Chartered Accountant/CA (equivalent to CPA in US) who can help you set it up. DO NOT DO IT by yourself
- For a US based company, I had to do something called "Appostille" which is equivalent of a Notary but for Foreign stuff.
I can recommend the company we used that we still use. We pay them about 20,000 INR per month (about $250/Month) for a team of roughly 15 developers and they do all the setup, taxes, payroll, filings etc etc. PM me if anyone is interested.
1) India's IRS still owes me tax-refund from 1998, 1999, 2000, 2001. I gave up trying to recoup long ago.
2) I inherited an inheritance in India from someone passing away (who died without a will). A family member managed to have everything put in their name.
Mindboggling.
That sounds exactly like they're needing a bribe, but you're too rooted in western ways of doing things that you don't realize it.
Ask a real lawyer, obviously.
[0]: https://fcpablog.com/2017/05/24/hyperdynamics-another-fcpa-i...
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 your company stamp.
The company stamp can be made by anyone for $1-2. It has no bearing on security at all. Yet, you need to carry it with you if you want to get anything done.
It's utterly baffling. I can access my corporate bank account online and make any number of transactions, yet if I want to apply for a debit card, I need my company stamp and signatures from all directors.
Why? I have no idea!
This usually fails for the reason you posted. I am not really sure how you are supposed to stop corruption once it gets rooted in your society. It is a vile and subversive menace that turns every one into a criminal, preying on their fellow man. A very unpleasant environment to live in.
The best article on corruption I have seen.(if you have time for an hour long power point presentation )
Well, guess what, the exact same thing happened in UK for PPE contracts:
"Within weeks of the company’s incorporation on 12 May 2020, PPE Medpro was awarded contracts worth £203m to supply millions of masks and gowns."
https://www.theguardian.com/politics/2022/jan/07/michelle-mo...
In Norway this road fund fee is collected automatically by the insurance company. This is obviously easier for the user (zero paperwork), less work for the state, and prevents scam artists from duping people.
And back on the subject of registering a company: in Norway this is done online and takes minutes.
Well, assuming that all people are roughly the same as each other, the answer would be to adopt traditions and systems from countries that aren't corrupt. Attempt the sisyphean task of convincing people that giving power to the middle class is going to lead to a better future.
As your comment reveals, the instinct when confronted with corruption is ... centralise power and try to force it to be used for good. That doesn't work, so try to convince people to decentralise power. Political and bureaucratic elites are regularly revealed to be corrupt, so stop making them the bottleneck for handing out the "allowed to run a business!" stamp. Centralising power just gives corrupt people a target to aim for and increases the blast radius when they worm their way in to a position.
How you convince people to do the sensible thing and decentralise power is beyond me though. The instinct to push power to a single leader is remarkably strong in humans.
Deregulation is the best cure for corruption, because it makes the gatekeepers obsolete. There would be no reason to bribe them because you don't need their approval in the first place.
For example, during British Raj almost any British who could, got a job to move these papers in India. India inherited that machinery and hasn't moved to economical right yet. The current government is trying but you can read how it is a bad government in western media since it came to power. The corruption in government allows foreign interference so of course.
- unhappy Indian
Paperwork really isn't to blame here because even if everything was digital, the people behind the operation and the policies that govern their behavior is still the same. The problem isn't the interface between citizens and the government, it is the backend source code of the government.
You are all barking at the wrong tree.
Automated systems can be quite awful (original research: Spain) but neither paper or digital systems would officially state the human factors involved in turning them over. There's simply less opportunity for these human factors in more automated digital systems.
I've had employees (in Brazil) who don't ever claim reimbursement on personal expenses because if their paycheck varies too much their bank freezes their funds (in the name of preventing money laundering) and then the employee has to go to the bank and bribe someone to get the funds unfrozen. Just showing the cause for the variation in payroll doesn't cut it. As the employee puts it, every requirement to show up in front of an official for anything requires a bribe.
Corruption is everywhere, it's just on different levels. Usually in more "developed" (I don't like that word) countries you see corruption on the highest levels, and people actually get away with it.
It hardly supports the thesis above. Germany is not rotten to the core by corruption. It's not a constant hindrance to someone trying to get things done.
Yeah, and long after that they decided to build a second pipeline (Nord Stream 2).
And before that, they've been received the same gas from the same foreign company over the ex-SU Ukrainian pipelines.
And five years later we will likely see Turkish pipelines (still bearing Russian gas) prolonged to Hungary, from where it will reach Germany once again.
And that foreign company isn't even running those Nord Stream pipelines - they were largely German, due to legislations requiring separation of the pipeline operator and the supplier.
Don't underestimate how much Germany had profited from all the cheap gas and infrastructure investments from the said foreign country, up until they managed to loose it all just for the sake of political appearance and no real substantial win.
I wonder if we would some day see Scholz in some American LNG company for which the nation now has to pay order of magnitude more, than it ever paid to Russia.
But at the large scale, we are absolutely a corrupt nation: our former Chancellor Schröder sold us out to Russia, there have been dozens of millions euros worth of (shockingly ruled legal) corruption during the pandemic, the large companies ("Deutschland AG") have an extremely cozy relationship with almost all parties in Germany, not to mention corporate donations and sponsorship of party gatherings (except far-right AfD whom no one serious wants to donate money to and far-left Linke who refuse to take corporate donations out of principle).
EDIT: Nobody wants to donate overtly to the AfD, that's why they had already multiple investigations into their finances and donations. A large part of which came from Switzerland. They do have those donation scandals in common with the CDU and CSU, those received anonymous donations in cash in briefcases. And Schäuble, who ended up as Finance Minister in the federal government later, got away with, I kid you not, "I do not remember that briefcase containing 100,000 bucks" (emphasize from me). So, it seems all parties in Germany are corrupt, some more than others, with the exact degree of corruption directly proportional to the time in actual power.
Oh that new building code or electrical code just so happens to only be fulfilled by using the latest (patented) product by company X?
Well it's the state of the art, we can't build below that standard anymore.
This is true in most highly industrialised countries. Can you name any where this is not true? I don't know any.
Another way to think about it: What is the polar opposite? "the large companies ... extremely unhealthy / combative relationship with almost all [political] parties". That sounds like the bad old days in 1980s India. Most economies would be a wreck if that were true.
If you follow the law to the letter, and you don't get what you want, the mere threat of hiring a lawyer will get it sorted.
The only issue is the speed. I see people lose their job offer before they even start, because the immigration office is too slow.
For Switzerland, well, a quick search for money laundering gives you all the information you need.
EDIT: Both the FIFA and the IOCI, probably the most corrupt organizations on earth, are having their seats in Switzerland.
I cannot find the word "corruption" anywhere. What am I missing?
Interpersonal networks and middlemen routers evolve over time into parallel tracks of shared understanding about how to achieve mundane process flows and solve problems when the official channels are broken.
Corruption is a weird thing. Why do some countries have more of it than others -- holding GDP per capita constant? I cannot explain it. Look at the United States -- "googols" of money spent to influence lawmakers. It cannot be healthy and looks like legalised bribery in comparison to other highly developed democracies.
In the article, the author needs to chase dozens of different bits of paperwork. Quite a few there were no problem. But quite a few incompetent, corrupt, or both. Now, how about a system where you submit one application in one place, and if other departments need to know or collect fees or approve it is the responsibility of the submission point to pay or collect approvals? One desk is held responsible.
the business model of corruption is : 1- slow the process as much as you can 2- some people will have deadlines and will be willing to pay to meet them 3- profit
the slowness is there on purpose, to be able to provide quick process as a paid service
The difference, and it's a major one, is that paperwork does not slow the pace of work in Japan. Once papers are there, progress is usually instantaneous.
So I was sent off and queued up to get my bag scanned and more importantly get my receipt stamped to say it'd been scanned walked back through the crowds where I could have done anything with the bag - to the luggage drop where the attendant checked that I had the correct stamps to say it had been checked! No seals on the bag, nothing to stop me giving them a different bag, just the essential stamp on a bit of paper!
You'll usually be frisked at the mall entrance. Women will only get frisked by a female security guard. If the female security guard is absent (pretty common), any female visitor can just walk through without getting frisked.
Was certainly not my experience 20 years ago.
We had that craze in Poland, but somehow managed to slowly crawl out of it over the last 20 years. It was a slow and painful process: even when the laws were changed not to require stamps, many places would ask for them and you would have to explain that your company stamp doesn't exist, so you can't place one on the form.
It's one of those bureaucratic viruses of the mind. We're lucky to have gotten rid of it, but there are others! Examples are "fill your forms with a BLUE pen" (supposedly because it looks less "photocopied"?), "sign legibly" (I never know if I'm supposed to use my signature or sign my name), "your national ID card number" (it's idiotic to ask for one, as it changes if you lose your ID and get a new one). There was also a period where every company would photocopy your ID (for example when signing up for a cellular plan), until the government stepped in and declared it illegal.
Bureaucracy is like barnacles on a ship: you have to constantly fight the growth.
I suppose they mean to say "don't make a squiggly line (parafka) and call it a signature".
Now they've brought them back again.
Once I ordered some drinks brought up to my hotel room around 10 in the evening. It took forever - turned out the guy who made the drinks was sent home for the day. So the hotel called him back and had him return just so he could come and make the drinks and bring them to my room. Because that was his job - nobody elses.
This was at a five star hotel in Amritsar.
Our driver slept in the car outside the hotel and was on call 24/7 for our entire stay.
Quite different from western countries for sure.
However, Amritsar is famous for the golden temple which is the the holiest of all Sikh shrines. They said it was most beautiful to view at night. So we went there late at night parking closeby , walking there there we passed by the rickshaw drivers sleeping in their rickshaws as far as i could gather they had no other place to sleep. So they had it even worse.
Not to mention the child beggars of New delhi or the makeshift camps you saw driving along the highway.
All of this was approx 10 years ago.
It for sure opened my eye to the destitute and poverty.
I think the funniest and most embarassing story I have about travel in India: The first day in downtown Mumbai, I go to the train stain to buy a ticket for a Churchgate station a few stops away. Honestly, I have no idea what the price will be, but I assume 20-30 rupees. I only have 100 rupee notes. I go to the ticket window: Lady tells me: "5 rupees". I gasped, and looked at my 100 rupee note. She rejects my 100 rupee note! (She was not disrespectful; said: you will take all my change! Wait here; after next person, I can sell it to you.) Next person pays with enough change, then me. All good. We both laughed. To put that in perspective, that is about 2-3 Euro CENTS to ride the train!
Edit- echoing a comment further down. I got an Indian visa. It was done online and was emailed to me in 24hrs.
I remember once my wife and I wanted to travel by train to a tourist town. After buying the tickets, we realized we had made a mistake (actually, _they_ had made a mistake). So we decided to cancel our tickets and just buy new ones.
We had to fill in an application, attach photos of ourselves, as well as our copies of our passports ... all to cancel a ticket! Boggles the mind.
It feels like a Kabuki theater, set up to keep the people busy and employed.
Legacy of British civil service and bureaucracy ?
See also, "no you don't understand, we had to start a war with the Muslims in the West because the British didn't tell them to be our second class citizens fast enough"
Rogers and his wife had left India's State of Manipur and were safely across the border in Myanmar. But wait, here comes an Indian official running after them, who says that they can't leave, because, they didn't have permission to be in Manipur. "He was telling us — I am not making this up — that we had to return to Manipur, because we were not allowed to be in Manipur, and thus we could not leave it," Rogers relates. The debate lasted for two hours before, "someone made a phone call and took the subinspector off the hook, and we were free to proceed."
Overall, kind of logic so, because how can you leave a place you didn't enter in the first place because you had no permit to enter it? Mind blowing!
The threat isn't "we're going to keep you here because you weren't allowed to be here," it's "we see you have overstayed your visa and now we're going to make sure you catch your flight out and ban you from ever coming back."
Please also provide two self attested photocopies.
(It’s interesting to think about why attestation is required.)
If you get a color print and get it laminated, your unofficial Aadhar suddenly becomes "official".
I've had so many arguments with officials about this its unreal.
> its a digital document and Aadhar website explicitly states that every copy of Aadhar is an "official" copy
part multiple times to people in my family, but had assumed this would be basic knowledge to government officials.
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
You do if you want outside investment. Or if you want professional management. Or if you want to seriously engage in international business.
What you say is true: most businesses are sole proprietorships. But that's a significant and manufactured barrier to growth.
As for funding and business strategy, it will get bit tricky because you will now have to think of different ways of financing instead of VCs. But it is nothing different than VC financing (and you get to keep 100% of your company).
Bureaucracy will remain obdurate as long as members of the bureaucracy are feted by society. Ideally, bureaucrats should be invisible. But in India, IAS/IPS officers make headlines regularly.
I won't get even started about the sheer amount of man hours wasted in preparing for administrative exams. Statistically, less than 0.1% of the people preparing for IAS exams will actually be selected. The remaining 99.9% waste YEARS of their lives in this futile endeavor instead of actually building and learning.
I remain bearish on India as long as the bureaucracy remains paramount.
If you are in UP and Bihar. That's not true for the rest of the country.
lets just say it is easier to "appropriate" the books as a sole proprietorship.
you have to pay mca fees for your authorized capital, one off but if you are doing serious business, it costs.
i know, 5% "might" sound a lot in taxes but by fudging some numbers, by not paying complaince fees, by not being on the hook for a "lot of compliance" and the penalties that come up, it does not sound worth the risk....
Look, if you are doing big business, want to raise money from the public, sure go ahead but not otherwise.
And this is the corruption mentality right there.
The author had added a correction to the post (12th August 2020) stating that this was a mistake, and that the actual procedure was much less cumbersome:
https://web.archive.org/web/20200812093618/https://superr.in...
> 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.
> [...] But PLEASE UNDERSTAND that “it was a mistake” in filing by an Entry Level Employee and normally this procedure takes less than 2 months and all the heavy lifting is done by the Revenue Department, Collector Office.
Tweet from the author about the correction: https://twitter.com/mrohanshah/status/1293170591441104902
But the correction was removed after a while, so maybe a bit of clarification will help.
That was the official response I got from the district administration so had to post it. Also was being pressured by the government (indirectly) to take it down. So that was all bs. Next update I'll give is when I will have solved the problem.
Why am I not surprised.
Do you mind sharing how?
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.
My father's has an orange field, so at some point he wanted to dig a well to get some water.
He went to the City Hall, got all the tricky paperwork and applied for permission to build it. Months passed by without hearing anything, and at some point he just forgot about it, assuming he'd be denied silently. There's some people in the city hall don't like him too much BTW.
Few years later an official from the government came, "I'm here to check on the well you built", to which my father was of course confused "what well? You never gave me permission to dig it!". Apparently and according to this official, the normal thing to do is that you apply for permission, then build the project and finally then you'll receive the permission eventually, so he'd assumed my father had the well built already. Since as mentioned some people were against him, he was also not gonna officially break the law and build it before getting permission.
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)
All this does is creates a set of entrenched local businesses which run hand-in-hand very transparently with local political interests. This is the whole reason Western folks never understand why China succeeded so fast, it is because they made the trade-offs necessary for growth. For rapid growth you cannot make everyone happy right away.
The good thing about India is that e-Governance initiatives have at least provided some transparency and understanding for the average person which did not exist before.
And then of course you can't just build on it. You may attempt to reclassify it into building land but from TFA it seems the process is just as tedious as in India and definietely not guaranteed to succeed.
Theres a big chance, once you get to the building, you will have to monitor the builders constantly otherwise they rob you blind. From my friend in India I was told they have the same problem.
Then you probably need a building permit, but they usually just need the plans for the building to be built for that.
I think in the US this is called Zoning and you need Zoning permissions or something similar.
Nobody will ever openly admit they want a bribe. They will just drown you in bureaucracy until you get the idea.
There are countries of which India is one of them where you can't do any serious business without paying bribes. Serious business is anything where a government official even suspects you may have money to pay the bribe. So maybe not a hairdresser, but if you have money to buy a piece of land you are expected to have money to pay bribes.
There is a lot of examples of large companies that came to the same conclusion. For example, Ikea tried to do business in Russia without paying bribes and gave up. They also decided they will not be supporting corruption but they failed, faced the choice to pay bribes or get out and decided to get out.
India is corrupt to the bone. Corruption is way of life. It is a reason for people to get government jobs which otherwise do not pay enough.
If government jobs do not pay enough and people self select themselves to get these jobs anyway only because they plan on getting bribes to supplement their salary, how prevalent corruption would be?
This actually is the reason why fighting corruption is so hard. Because people self select themselves and displace those who do not accept corruption from those jobs. Then these officials advance and take up high level jobs and pretty soon you have entire structure corrupt to the bone at every level.
This post and the OP's decisions seem to me to be part of an attempt to decrease corruption in India.
In what sense is the author trying to pull a fast one? They own agricultural land. It is legal to convert agricultural-use land to non-agricultural-use land. There is a legal procedure for doing so. The author is trying to follow the procedure. The procedure turns out to be very difficult, and they publicize this fact. Where is the 'fast one' being pulled and who is it being pulled on?
> 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.
Money paid illegally to gain an unfair advantage, that will result in local prosecution if discovered and is not the usual practise is a "bribe". No one should pay those.
Money paid illegally to gain normal access/approvals/licenses etc, where it is entirely normal to pay and unlikely to lead to local prosecution is "extortion".
Op isn't really paying a bride, he's being extorted.
Duh?
As I see it, cultures are different and one thing that is considered an absolute taboo in one culture might be customary in another. Tips in the US are customary yet at the same time they are offensive in Japan. Bribes are killing the economy in my country yet it makes economy moving in India.
PS: I personally hate corruption more than anything.
> Duh?
It's only "Duh" because you snipped the qualifier out. It's not "Duh" if you read until the end of the sentence like you normally do:
> in an area where bribery is customary
See?
Up to 1 year in prison.
This is a notoriously difficult process in any developed nation, and is often even impossible, because the state has decided that a particular area should be dedicated to agriculture (the nation has to feed itself, etc).
1) People succeed here inspite of the government, not cause of it.*
2) Indians can be successful anywhere except India.
*Unless you are rich enough to bend the laws to your needs.
However during the last years Ukraine is getting rid of corruption at an escape velocity and hopefully at that speed we will be able to be done with it within ten years or so.
I had a friend who worked at Kyiv since 2014, first as a nightclub owner, then as a security contractor salesman/manager, and he told me that low-level corruption there was divided by two overnight (during Covid).
I don't know what happened, but i guess it is easier to pass harsher or society-changing laws during a pandemic.
This is why the speed of reforms in Ukraine is mind-boggling. Absolutely nothing short of amazing.
Fine, so be it. Pay the bribes and get to work.
I once lived in such a country*. The unfairness is built in, but if you have the money, you can get whatever you need relatively quickly.
If you are trying to save money, fine. But you are willing to go to court, which is even more expensive. And all that time wasted you could have been earning revenue. So instead, pay the bribes, start the company, get workers and build clout, and have the power to make change!
* Said country has made huge strides to combat this and become legit in the past 30 years, and that has made everyone more wealthy - even those employees that can no longer collect bribes.
Since most people think like that, things don't change and everybody is miserable. Cudos to the author for not accepting this rampant corruption.
> If you are trying to save money, fine
If that's really what you think the authors motivation is then you may have missed the point of the article.
Up to 1 year in prison. Do you wish to be exposed to this?
https://edtimes.in/why-was-formula-1-racing-forced-out-of-in...
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).
This is an absolutely ridiculous demand to make. This is because of the very complicated way the GST structure works in India.
The systems in India are designed to complicate life for the ordinary person
[1] https://www.youtube.com/watch?v=3mnB5Q5Hay4 ... translated subtitles are decent. Money shot: "It's like that: We can't all sit with a MacBook in Berlin in a cafe, sipping on a chai latte and programming the tenth dating app. Sometimes, someone has to work with their hands."
They had all the connections so setting things up was quick. Then we needed a factory so I visited a bunch of factories owned by the conglomerate. We picked one and they set aside some space to build our stuff. We didn't get soaked in that deal; I think that was because the factory wasn't really making much money and they figured the JV would throw off more cash.
We also worked with some other suppliers; I visited them directly, negotiated terms, and only then brought in the big guns from our partner. I figured that would mean we'd get the best deal: either the special deal for a new customer or the special deal for one of the big guys, whichever was cheaper. The latter was always cheaper, but I always wondered: would that have been true had we not already negotiated a ceiling on the price?
And in the end...the person assigned to be the CEO of the JV by the partner, a nice guy who seemed to work hard...embezzled most of the capital!
But my big lessons were: 1 - work with a partner who already knows whose hand to shake and 2 - don't try to do anything new; modify an existing structure. In that, the latter case is similar to what apparently is the standard way to open a restaurant in America: don't rent an empty space and fit it out as a restaurant; instead take over the lease and permits from someone who went bankrupt doing that, and run your restaurant on their kitchen setup and permits.
> 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.
Seems strange to me that it is on you to check that the government isn't planning on building on the land you own.
The difficulty is not the manufacturing plant. It is the conversion of agriculture land to non agriculture land.
I find the title and the conclusion by the author very misleading.
It would make more sense to time-limit some of these things and make the various departments reapply every 2 years if they think the process serves a purpose still. Perhaps they pay $1M as well. As soon as the cost is more than the benefit, all of a sudden we realise that we don't really need 100 differnt people to sign off on everything.
Another easy win in this example would just be to make more of it electronic e.g. you apply in one place and they send out the relevant permissions to the various departments, some of whom could fill them in immediately/automatically and wire them back.
I don't understand why this is phrased as incredulous. Are there countries where this isn't the case? Just because you own the land -which you don't, you merely have a title that grants you the exclusive, but limited, usage rights of that land- does not mean you are free to just build whatever you want?
That said, Indian paperwork is famous for being Futurama levels of bureaucracy with Balkan levels of bribery. It's why giant corporations just don't bother with India, and why small store owners just don't even bother: just run your business until they crack down, which they won't as long as you keep a low profile.
Yeah think again.
Are there any countries where this isn't true? Where you can just build whatever you want on your own land with your own money?
British colonialism & its continued degeneration under Nehru's acolytes made sure that India would never ever rise again. What a tragedy.
It's amusing that my countrymen consider the Indian state legitimate at all - it's only agenda seems to be the destruction of the classical Indian civilization, together with all its inheritence (language, tradition, 'religion' ...).
Looks like the author wants to use land demarcated for agricultural use to build a factory.
That is a whole new story. In many cities, there are industrial development centers and you can buy land there and build a manufacturing facility easily.(The very fact that the govt. sold/leased you land in that zone means a lot of environmental and industrial clearances are de-facto fulfilled)
GBooks link: https://www.google.com/books/edition/The_Mystery_of_Capital/...
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.
Not as frustrating as what OP described. Still. Simple Administrative formality can fuck up your plan badly.
CF a fine piece of self reflection on our own adminstration. ( I love our admin, it's a fine piece of Napoleonic technology. But. yah. ) https://youtu.be/JtEkUmYecnk?t=34
Given "bribe" was mentioned 39 times in the article.. Good luck!
Over a period of 5-6 years, I brushed up with so much corruption that it sickens me to the core. I tried approaching the ACB(anti-corruption-bureau), and faced even more harassment. I believe their job is to protect corrupt officers who pay dues to their higher ups. And the supreme leaders are changing rules that are empowering such corrupt officers. If we talk about it to public - we are termed anti-nationals.
I grew up with "real goons and mafia" when I was a kid, but even those guys had better ethics relative to what most govt officers exhibit today.
In India, I used to have mild panic attacks when my mobile rang. I had sleepless nights and my work suffered so much.
I left India with my business just recently and came to UAE (because it was the shortest path). The freedom from stress was so good that I slept like a baby for a few days. (And I am an Hindu for the record). The only worry I have here is higher cost of living which leaves less savings, but I make enough. I have so much invested in India that I want to sell off, but I do not want to go back even for a moment. I have extended family back there, but I don't want to see them.
There are a few things I've realised over the past 20 years, and more so in the past 8 years. I may be wrong - but this is what I think, based on my own experiences:
1. GST is a HUGE RISK to any business in India. There are some businesses that actually benefit from GST - but they deal with "arbitrary ruling risk". Then there are other bureaucratic departments. India's GST was not successful in doing "one-nation-one-tax", but it became successful in bringing multiple levels of corruption and goonism together.
2. All taxation and govt departments are departments of white-collar greedy goons. No matter what people say about part of the system being corrupt. They are all corrupt goons because they work in unison.
3. Corruption in India is not like "some bad fish in water", but it is like a "glass of highly toxic liquid that has contaminated the container". Even if you put in multiple glasses of "clean water", the system stays "toxic" - you basically need to replace the container completely. And that really requires a big breaking change - which people of India will not support.
4. Indian govt officers (even the clerks) think of private Indian citizens as "slaves" and use divide-and-counquer policies. If we think India is a democracy, think again. The supreme "elected" leaders cannot do a lot, because they need them.
All the land in India is agricultural by default. Except in some desert states.