Now, MSMEs won’t need approvals to start biz in Rajasthan

JAIPUR: Rajasthan has become the first Indian state to allow MSMEs to start projects without any approvals or clearances. Moreover, for three years no inspectors or officials will knock on the doors of their factories.

Attempting to attract investment, the Rajasthan government notified rules last week under the Micro, Small and Medium Enterprise (Facilitation of Establishment and Operation) Ordinance, 2019, that require an investor to submit only a “declaration of intent” to set up a new enterprise and start work after receiving an “acknowledgment certificate”.

“Delays in obtaining approvals and clearances had forced some investors to shelve projects in the past. It has also slowed project implementation. That’s why most of the proposals for new enterprises fail to take off. We expect the new rules will remove hurdles and enhance ease of doing business,” said Subodh Agarwal, additional chief secretary, state industries department.

The ordinance provides exemptions from approvals and inspections under any Rajasthan law but enterprises are required to follow the prevailing rules and regulations. It also empowers state government departments to exempt any enterprise from any approval or inspection under any Central law that allows the state to exercise such powers.

However, after the expiry of three years, the enterprise will have to obtain required approvals within six months.

Companies incorporated after March 5, when the ordinance was promulgated, will be eligible. Agarwal said the department will soon launch a website for submission of applications and receiving acknowledgment certificates. So far, two companies have shown interest.