Ease Of Doing Business: Small Biz Struggles With Compliance Norms

“We have to send one sample per batch for testing at designated labs. This is a costly and time-consuming affair,” said Jitendra Shah, president of Federation of Associations of Maharashtra (FAM).

Shah added, "Now, even raw materials are subjected to BIS standards. If the final product is BIS compliant, it means that proper raw materials are used. So, there is no need to independently certify every raw material. Such norms increase undue interference of the bureaucracy."

He also said that the government practice, to penalise sellers if the buyers are not registered under FSSAI, is becoming a challenge for ease of doing business. “There is no way for a seller to know the buyers’ bona fides. Yet, if a buyer's licence has expired, the seller is penalised,” he said.

Shah is not alone. Traders and small manufacturers from across the country are voicing serious concerns over the mounting weight of compliance, ambiguous policies and distressing conditions of running small businesses. 

At a recent meeting organised by Bharat Vyapar Udyog Mandal (BVUM) in New Delhi, they said excessive bureaucratic control, arbitrary enforcement, and frequent policy changes, stand in direct contrast to the government’s claim of promoting ‘ease of doing business’.

The event saw Union Law Minister Arjun Ram Meghwal, several MPs, MLAs, MLCs, and leaders from prominent trade bodies in attendance. The traders are also contemplating protests to safeguard their interests, in case central and state governments do not respond swiftly.

Frequent Policy Changes, Financial Frauds

Representing the voice of small traders, Shah told The Secretariat, “An entrepreneur invests lakhs or even crores to set up a factory. Arbitrary changes in policies can lead to shutting down these units, leaving tens of people jobless.”

Drawing the attention of nearly 700 attendees, he highlighted the problem of buyers not clearing dues, a practice that blocks essential working capital and stalls growth.

“Fraudulent buyers use various tactics to evade the judicial process. Resolution of such disputes is time-consuming and costly. This is a major harassment for traders. The government should intervene and help us resolve the issue,” he noted.

Small Shops Buckle Under Retail Discounts

Small neighbourhood retailers, also known as kiranas, say that they are also being pushed to the brink by predatory pricing by big retail and online giants. “We have sought a level playing field for traditional retail players from the government.

If necessary, there should be a law to ensure fair play,” said BVUM president Babulal Gupta. “We have resolved to intensify our engagement with both state and central governments, to ensure that policymaking becomes inclusive, practical, and reflective of ground realities.”

The Big Fixes Traders Want

Trade bodies are pushing for a simpler GST regime with just three slabs — exempt (zero per cent), five per cent and 18 per cent — to reduce compliance confusion, said Gupta.

They have also proposed a unified half (0.5) per cent "mandi tax" across the country on agricultural goods being brought to the Agricultural Produce Marketing Cooperatives (APMC), replacing the patchwork of state rates.

The move, leaders say, would level the playing field for traders nationwide. “We also seek removal of stock limits on goods, as it blocks free trade,” said Gupta.

At the same time, BVUM secretary Mukund Shyambihari Mishra noted that without prompt action, traders might be compelled to initiate a large-scale democratic protest at Delhi's Ramlila Maidan and mobilise nationwide support to safeguard their interests.