Plan to abolish trade licence stymied

Urban Development Dept says move will delink industries from local bodies

Plan to abolish trade licence stymied

The State government might have decided to abolish trade licence for industries, but a State Industries Department’s proposal in this regard has hit a hurdle with the Urban Development Department (UDD) opposing the move.

The UDD recently informed the government that abolition of trade licence would result in completely delinking the industries from the local bodies. If abolished, it would become difficult to monitor the functioning of industries at the local level.

Official sources said the Karnataka Municipal Corporation Act and the Karnataka Municipalities Act have to be amended in order to abolish the trade licence system.

Trade licences are issued by local bodies and they have to be renewed at regular intervals. A majority of the industrial areas are located in the jurisdiction of urban local bodies (ULBs), and the licences are the only link between industries and the ULBs, sources said.

If the Acts are amended and the system abolished, it would become difficult to monitor the industries and maintain records. Currently, local ward offices keep in touch with industrial units. It might be difficult for other government departments or agencies to do this job as they lack resources, officials pointed out.

The government has in its industrial policy 2014-19 released in October last year announced that the trade licence system would be abolished.

Subsequently, the Industries Department circulated a copy of the policy to all the departments concerned, including the UDD and the Rural Development and Panchayat Raj Department, to take appropriate action to implement it.

When contacted, Urban Development Department Secretary T K Anil Kumar said the UDD was looking into the proposal. There are a number of issues involved. There is a need to amend the Karnataka Municipal Corporation Act and the Karnataka Municipalities Act for this purpose. The government will take appropriate decision in this regard, he added.

FKCCI president S Sampathraman said the views of the UDD were untenable. “The government should work towards improving ease of doing business. It will enable flow of investments, especially from local entrepreneurs. A country

cannot prosper without the flow of investments. Ease of doing business can be improved by doing away with unnecessary approvals and licences,” he said.

He said a recent World Bank report had stated that India had slipped to the 142nd rank from 138 as far as ease of doing business was concerned. This is because of enormous number of sanctions, regulations, approvals and licences required for starting a business.

The trade licence should be abolished as announced. Industries are already registered under a number of Acts such as the Factories Act and the Shops and Establishments Act.

Any information about an industry can be obtained from any of these agencies. There is no need for local bodies’ control over industries, he added.
DH News Service

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