The Government of India has made it mandatory to provide Aadhar number along with the application in order to register a new business of an entrepreneur.
With this new rule, the startups cannot fill a new online form for registering new enterprises which was introduced last month unless the Aadhaar credentials of their promoters are validated online.
The ministry for micro, small and medium enterprises had last month notified Udyog Aadhaar after Prime Minister talked about simplifying procedures to start a business with a single-page registration form.
Official commenting on the one-page form initiative said, “A large chunk of enterprises in India are simply not registered due to the cumbersome paperwork involved in the process and, therefore, can’t tap the government schemes for them. The KV Kamath panel on financing the MSME sector, that has been the biggest job creator in recent years, had recommended that the registration should be universalized.”
Some state governments had already voiced apprehensions about the need to ask only for entrepreneur’s Aadhar number rather than other identification proofs to register their businesses. One of them is Assam where the Aadhar enrollment has begun in three districts only. Thus, they have advised the central government to consider allowing PAN cards or other identity documents as well.
As per the experts, this move is a violation of the Supreme Court order on Aadhaar that made Aadhar card to be used voluntarily for few social welfare schemes only.
Pavan Duggal, Supreme Court lawyer, said,
“The Supreme Court has been crystal clear on the Aadhaar number being voluntary for now. So this would be a violation of the apex court’s order and could be a fit case for contempt of court. This would also infringe on citizens’ right to equality, as it would discriminate against people who don’t have Aadhaar numbers yet.”
On the ease of starting a business, India ranks 179th. The World Bank report notes that it takes around 27 days to start a business in India, and there are 12 procedures that need to be completed before one can start a business in India.