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Scams throughout India a threat to Modi’s ‘ease of business’ policy

I had just finished registration of my company a few days back. Normally company registration in India is done in 3 steps:
1. Digital signature verification

2. Director Identification Number

3. VAT registration
Thanks to steps taken by the central government, now registration of a start-up/company has become digital. This is a big shift from the usual filing of paper-applications at the local Company Registrar office. In the past, budding company founders were taken advantage of by brokers/middlemen and clerks. Sometimes they even fell victim to corruption (so I am told by my Dad). Now that this avenue of earning has stopped for these people, they have resorted to scamming innocent Indians ( Company Incorporation VPP scam in India ).

I received a V.P.P (Value Payable Post) delivered by India Post on a Saturday. It looked like it had something to do with the Director Identification Number registration and I had no-one to consult on a Saturday (stupid me). I knew from past experiences not to return packages to India Post because it ended-up in a bad shape. So, I paid the postman Rs.998. To my surprise I am told by my auditor on the next Monday that it is a commonly recurring scam that occurs throughout India. I was angry and had to go through 4 clerks to finally get some answer. I was shocked to learn the Post office couldn’t even track the money order being sent back to the sender.

W/reg to past experiences:

I build and innovate on high tech devices. I had sourced some testing equipment from Australia and upon receiving it by India Post, was asked to pay a customs duty of Rs.950. I refused because customs didn’t have a relative Indian device to compare to and hence charge me such a hefty amount. Unable to have my customs query answered, I headed-off to the local post office to collect it. I found it below a heap of parcels with the original packing ripped-off and just cardboard + torn bubble-wrap for protection. I protested only to be threatened by the postman that if I didn’t pay then and there, he would send it back to customs. I paid the amount.

IMG_20160519_140838_1

India is not yet a manufacturing economy but people have taken the first steps already. Government is still lagging behind and we still face problems when it comes to sourcing raw-material, equipment and tools. In my case, I source 90% of my equipment from abroad because India still doesn’t make such machinery. For us ‘lead time’ and ‘cost’ are highly critical parameters and our survival depends on ‘ease-of-sourcing’.

What can you do to avoid getting scammed?

Question everyone and look for accountability. The hierarchical structure of departments makes accountability a big problem. ‘Make in India’ should also be looked at from a startup point of view. Manufacturing is a follow-up of innovation and RnD.

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