2 October, 2008 - A study commissioned by the Anti Corruption Commission (ACC) has pointed out that ‘administrative burden’, arising from licensing regulations of trade, industries and commercial ventures, is costing the Ministry of Economic Affairs Nu 98.025 million a year.

“Ninety one percent of this regulatory burden is born by the clients and 9 percent by the ministry,” the study said. The total monetary value has been calculated by multiplying the average time taken into the average wage and cost. The major portion of this burden (61%) was due to financial or performance statements required by businesses for applying for any business.

Another major area was in registration and approval (25%), (7.5%) in renewal and (5%) in inspections. It was also found that, sector wise, the heaviest burden was on large commercial and industrial ventures, bearing 93% of the administrative burden.

The study was done by a Multi Sectoral Task Force (MSTF), on the initiative of the ACC to prevent corruption and enhance good governance by simplifying regulatory procedures, according to a MSTF official. The task force is a mix of ACC, Finance, Economic Affairs, Works and Human Settlement ministries, RIM and private stakeholders.

The task force has made some specific recommendations to reduce administrative burden. The committee recommended that time taken can be reduced if financial statements generated by accounting software of business be accepted, and also called for a review on whether these statements were meaningfully used.

The report states that the time taken for clearing license is too long and should be handled through a one-service centre with standardised procedures and services. It has also asked for doing away with some multiple clearances for contractors, clear, simple and easy regulation to attract FDI inflow.

The task force also discussed with the ministry specific issues and agreed to do away with location clearances for a further list of cottage industries (cobbler, saloon, tailor, tyre repair) after identifying them. The MSTF has said that currently too much time was taken in approving large and medium scale investments due to three rounds of approval meetings.

MoEA has agreed that such meetings did delay project clearances and has suggested that certain proposal without any issues can be cleared directly by the department, while projects requiring commitments of power, foreign currency and large power requirements be discussed by the committee. The MoEA has also agreed to simplify import procedures and do away with the import house registration.

“The MSTF will do an impact assessment of all the above measures agreed to by MoEA a year after their implementation” said an MSTF official.

The project, run as a pilot study, will be implemented in other agencies. The task force will also look at around 135 Acts and laws to reduce administrative burdens.