Thiruvananthapuram: Panchayats in Kerala will soon be empowered to issue licences for small-scale enterprises operating within homes, with up to 50% of residential houses permitted to host such ventures.

These provisions form part of an upcoming government notification that will introduce a comprehensive revision of The Kerala Panchayat Raj (Issue of Licence to Factories, Trades, Entrepreneurship Activities and Other Services) Rules, 1996, which currently governs the licensing of factories and enterprises in panchayats.

The proposed revision will empower Panchayats to issue licences for a wide range of enterprises, including new-generation businesses, as long as they comply with the law. At present, small-scale industries and commercial services operating within homes are not eligible for Panchayat licences. The updated rules will also help entrepreneurs overcome barriers in availing bank loans, GST registration, and government grants.

Currently, the rules cover only about 150 types of services and enterprises. The entrepreneurship licensing rules for municipalities and corporations will be revised at a later stage.

Key changes proposed
Transferability of licence: A licence, once obtained, can be transferred if the nature of the enterprise remains the same, even if the entrepreneur changes.
Faster renewals: A fast-track system will enable same-day licence renewals.
Capital-based fee structure: Licence fees will be calculated solely on the basis of capital investment.
Exemptions for small enterprises: For ventures with low capital investment, the cost of land and building will be excluded while assessing special slabs and overall investment.
Grievance redressal: A system will be introduced to resolve complaints against enterprises with the help of expert advice and in a time-bound manner.
Year-to-year validity: Licences will be issued on a year-to-year basis instead of being linked to the financial year.

Two categories of enterprises
In the revised rules, enterprises will be classified into two categories. The category one comprises manufacturing units, and among these, units falling under the white and green categories of the State Pollution Control Board will not require a Panchayat licence. Instead, they only need to register with the local body. Units under the red and orange categories, however, must obtain a licence.

Category II comprises trade and service units. For all trade and service-related enterprises, obtaining a licence will be mandatory.