The Press Note also clarifies preconditions

The Modi Government, on Wednesday, announced its first step towards greater ease of doing business by addressing the industry’s demand on the simplification of the process for the extensions of industrial licences.

In a new Press Note, the government extended the period of validity of industrial licences from two years to three years and relaxed the requirement for companies to have to go back to the Licensing Committee for the extensions. The extensions will now be done with the approval of the Joint Secretary concerned of the administrative ministry, it said.

“In supersession of all earlier Press Notes, the period of validity of industrial licence is being extended from two years to three years as a measure for ease of doing business,” the official release issued here said. The new guidelines will apply to those cases where even three years after the issue of the industrial licence, the licence holder has not commenced production. The renewals would be allowed for a period of two years. The Press Note also clarified the preconditions for the extensions. These include: Land should have been acquired, either under ownership or on lease for a minimum period of 30 years and the orders for plant and machinery for the project should have been placed. Certificates from an appropriate local body such as the Municipal Corporation stating construction on the project has commenced will also be required.

The Press Note clarified that applications involving transfers, suspensions or cancellations of licences will not be considered for extensions. Also, a licence will be treated as having automatically lapsed if even five years after it is issued commercial production not start.

The Confederation of Indian Industry (CII) welcomed the notification. In a statement, CII Director-General Chandrajit Banerjee said: The Ministry of Commerce and Industry has sent a strong signal that the government is committed to enhance ease of doing business in India. “Industrial Licence has been one of the biggest pain points of the Indian defence industry… In various representations to the government, the CII has recommended that industrial licences should be simplified, and the period of validity should be increased.” Mr. Banerjee said in the statement.

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