Headaches of Manufacturing in India

Transitioning to business – A whole new set of responsibilities

Dealing with government departments is a big part of managing a manufacturing business in India.
Our manufacturing business is neither big nor small and we get hit from all sides. Customers want reduced prices and these can’t be delivered if we comply with all government departments. Our small time competitors take greater risk, do not pay excise and that alone saves them 12.5% on costs.
Now…. We have to deal with the following departments:
  • Excise
  • ModVAT
  • Labour
  • Gratuity
  • PF
  • Income Tax
at both the factories. Both factories need a full time accountant to maintain books and manage compliance issues. This also adds costs as all departments want to be paid off on a monthly basis.
So.. the choice is to invest now in hiring this support staff and setting up controls so that we don’t falter or continue to “wing” it. I prefer the former.