BUSINESS

ENVIRONMENT

DONE BY: SUBMITTED TO:

ERRAM PRAVEEN PROF.KISHORE
ROLL NO:05.
 UNION BUDGET 2020-21

This Union Budget is prepared according to the current scenario of

Indian economy growth.

Key areas to be looked in to boost the economy:

 Making India global manufacturing hub.
 Reviving banking sector, automobile industry, agricultural sector,
research, develop and innovate.
 Disinvestment policy, infrastructure development.
 Women empowerment, FDI reforms, soft power, msme’s,
start-up’s.
 Defence production in India.
 Solid waste management, income tax e- assessment, water
security.
 Enriching higher education, inter linking rivers for easing logistics.
 Boosting railways, transparency in governance, developing health
sector.
 Creating strong co-ordination between interstate and states.
 Taxation, space programme, enhancing urban e-governance.
 Rural empowerment.

Towards a 5 Trillion Dollar Economy:

 (Soch – punarvichaar - ya - pradarshan) that is think – rethink and
perform.

MAKING INDIA GLOBAL MANUFACTURING HUB :

Measures India can take to achieve this:

Need for factor cost reforms:

 Land reforms making it easier and affordable to acquire land.

 Allowing greater flow of FDI to reduce cost of borrowing.
 Moving from over-protective to Flexible labour laws.
 Predictable tax regime.
Investment in infrastructure:

 Well connected means of transport (road, rail, inland-waterway) to

keep transportation cost minimum.
 Development of industrial corridors would attract setting up new
industries.
 Adequate focus to ensure availability of hard and soft infrastructure
(Power supply, credit flow, man power and other).

Innovation:

 Innovation is necessary to come up with new technology, new

products and new brands.
 Therefore, Research and development needs to be given focus
by bringing together scientists-research institutes-industries.
 Strengthening patent regime.

Technology adoption:

 Need to support technology upgradation in MSME’s.

 Taclking new technologies like Artificial intelligence and making
country part industrial revolution.

Policy support:

 Setting up Special Economic Zones and Coastal Economic

Zones.
 Simplifying taxation system.

AUTOMOBILE INDUSTRY:

Steps to reach international standards of automation:

(anusandhaan- ya – vikasith) R&D.

 Providing incentives for R&D through weighted tax deductions to

boost R&D.
 Moving towards international environment and safety standards.
 Cutting logistics costs through improved river or rail transport.
 Income tax rebates for those buying EV’s that is electric vehicles
and incentives to Indian components.
  Industries should work closely with training institutions to produce
quality workers.
 By this it leads to job creation.

FOCUS ON MSME’S:

 Availability of Uncollateralized Credit

 Simpler Business Registration and Insolvency Regulations

INFRASTRUCTURE:

States have to actively participate in the road development project. Land

is a state subject and states have to cooperate with centre on this
aspect.

 If India were to achieve higher growth rates, then development of

world class infrastructure is a must.
 There is a need for integration of water grids, transmission grids,
and the green corridors along with the construction of roads.
 We also have to create integrated multi-modal transport systems,
where there has to be a connectivity of inland waterways, ports,
rails and roads.
 In the village roads sector, there has to be pucca roads connecting
the last mile villages. The PM GSY is doing well in this area.
 Priority should be given on expanding capacity and improving
operational efficiency. 
 Environmental clearances, Tariff norms, land acquisition etc. need
to be standardized and implemented for the port sector so as to
boost foreign investments.
 India’s cargo traffic handled by ports is expected to reach 1,695
million metric tonnes by 2021-22, according to a report of the
National Transport Development Policy Committee and to
capitalise on this potential, expedient development of port
infrastructure becomes vital which will further help in realising the
dream of $5 trillion economy by 2024.
 Improved industrial development along ports, tourism, cities, inland
waterways to connect ports will lead to employment generation
and revenue for government.
  Private sector participation in infrastructure delivery helps deliver
tangible benefits.
 In highways, airports, ports and renewables, the private sector’s
role has been landscape altering. The private sector has also
delivered efficiently both on project execution (where land and
clearances have not been a constraint) as well as operations.

Following steps should be taken to ensure efficient, affordable, speedy

construction of quality roads:

 Efficient dispute redressal mechanism.
 Reducing the gestation period.
 Faster and easy environmental clearances.
 Easy government approval for projects.
 Effective rehabilitation of distressed people affected due to the
project.
 Controlling levels of corruption and project escalation.

Boosting Indian exports:

 The government must draw on its political capital to push through

reforms that address the deeper structural issues distressing the
economy.
 India should look aggressively to expand its share in global
exports.
 Even during current economic environment of low domestic
demand and investment, exports could provide the much needed
boost to growth.

Tourism development: (Paryatan seva)

 Developing a portal for providing seamless service or experience

to internal and external tourists.
 Travel and tourism can drive economies, need to ensure proper
management of their tourism assets.
 Boosting tourism’s role in job creation.
 Prepare for the changing profile of the international tourist.

To promote a supportive ecosystem for innovators from all over

the country:

The Way Ahead – Setting rules for our tomorrows:

  Innovations have the potential to make India a collaborative
society, and there is a need to translate innovation to
entrepreneurship.

 Innovations by themselves are not enough. We must also build an

ecosystem for converting innovations into enterprises.

Agricultural sector:

Measures to boost agriculture as an engine of growth and job

creation:

 Liberalize constraints to marketing, transport, export and

processing: Improve access to domestic and international
markets.
 Increase investment in research: introduce new seeds,
introduce new farming techniques widely.
 Improve water resources and Irrigation/Drainage
Management: Piped conveyance, better on-farm management
etc. and increasing productivity over land usage.
 Avoid loan waiving: As it only diverts resources from needed
investment, focus should be on allocation for capacity building.
 Facilitate conversion of agricultural waste.
 Convergence of schemes: Integrate MGNREGA with Blue
revolution to promote aquaculture.
 Agriculture and private sector: Facilitates transition from
Agriculture to robust Agri-business systems.
 Creation of Agricultural Universities in every state.
 Enchancing farming techniques through R&D support.

Adoption of unique irrigation technology called System of Water for

Agriculture Rejuvenation (SWAR) in Telangana:

Benefits:

 SWAR uses a very less amount of water and there is zero

wastage of water. 
 SWAR desires to bring more low-rainfall areas under irrigation.
Jal samrakshan abhiyan:

 On the lines of the Swachh Bharat Mission, extensive information,

education and communication will be needed to create a jan
andholan for water management.
 The ongoing Jal Shakti Abhiyan will help in creating awareness
about the importance of integrating source sustainability and water
reuse with the provision of household water supply. 

ENVIRONMENTAL PROTECTION:

SOLID WASTE MANAGEMNET:

 Strict implementation of the rule, creating adequate awareness,

training for requisite skill sets and providing affordable
technology to the informal sector to be implemented.
 Up-gradation of the informal sector to reach environmentally
acceptable operations

The Way Ahead: to get rid of the plastic pollution:

 Promoting local government regulatory and other efforts to

tackle plastic pollution.

Enriching Indian higher education: (bharathiya Vidhya bodhan

portal):

A portal is developed to update about developments in enriching

education in India and also valid suggestions are welcomed on portal.

Steps to be taken:

 New education policy is urgently needed, which should make

Indian Educational system par with global standards.
 Interdisciplinary approach to higher educational courses should
be adopted on international standards, giving more
opportunities for innovative researches.
 Our goal should be resolving and restructuring of higher
education is must, then only we will be able to tackle the human
 potential and resources of nation to the maximum and
channelize it for the growth of the nation.

DISINVESTMENT POLICY:

 We should analyse every parameters before making disinvestment

of the profit making PSU's for achieving the budgetary deficit.
 Disinvestment process of AIR INDIA will be completed as soon as
possible.

REVIVING PSU’S BANKS:

Way forward:

 For banks, the raw material is capital that comes from

shareholders and right now the government is not much in position
to provide capital.
 The focus on NPA problems right now.  Policies should be made
wherein sectors such as infrastructure sector should be ideally
funded by debt market and not banks. The sum involved and the
loans sanctioned is huge.
 Private players which have network as well as human talent should
be encouraged to expand.
 There is a requirement of deep structural changes in the
ownership and running of banks.
 NBFC are needed to be under control of RBI’s regulatory
framework.

FOR ACCURACY AND FASTER DEVELOPMENTS IN GOVERNMENT

UNDERTAKEN PROJECTS:

 Framing strong resolution for Inter-ministerial coordination.

MEASURES TO INCREASE RAVENUE: 

Some measures for Direct Tax revenue:

 GST to increase compliance base.

  Stricter implementation of laws dealing with tax evasion and
avoidance such as IT act.
 Bringing prosperous farmers under taxation
 Strengthening infrastructural and human capacities of the states
and local governments as well, to improve tax collection.
 Exercise duty and compensation cess to be increased on the
tobacco.
 Increase in import duties and customs duties.
 Provisions for taxation on long term capital capital gains(LTCG) BY
extending period.
 Corporate tax rate remains to be unchanged.
 No Change in income tax slab rates.

For Indirect Tax revenue:

 One of the objectives of GST was enhanced revenue collection,

but still there are challenges in its implementation and
compliance. Removal of these barriers will help to achieve
targeted revenue collection.
 Devolution of powers to local governments for imposing taxes.
 Petrol and diesel should be considered to bring in the ambit of
GST.

Non tax revenue:

revenue can be increased by:

 Reviving of ailing PSUs through more autonomy, capitalisation

and increasing competition within and with private sector.
 Public-private partnerships (PPP’s) will enhance the efficiency
of public sector units.
 Improving business atmosphere in India (ease of doing
business) which will result in higher credit rating and higher
confidence in investment in government bonds etc.
 Government has done well to implement tax-side reforms in the
form of GST that will enhance the tax revenues in the long term.
A similar reforms-oriented approach towards indirect taxes and
non-tax revenues can help it do a better job at balancing the
fiscal deficit and public expenditure, ensuring that the growth
momentum is not lost.
  Bringing more awareness on equity linked savings scheme.

TAX COMPLIANCE:

 Increasing tax compliance base.

 Immediate action to interlink adharcard with bank account and pan
card with same mobile number. (to monitor every transaction)

SPORTS:

Administrative reforms:

 Highlighting kabaddi and kho kho needs to be boosted through

funding.
 Developing and encouraging backward states infrastructure
reforms like sports universities.

RAILWAY SECTOR:

Measures to be taken:

 100% electrification of tracks to save fuel.

 Start new trains on busy routes to tap the demand.
 Rationalize railway traffic as per efficiency.
 Improve pre-board facilities such as hassle-free booking, clean
station platforms, coaches and toilets, standardised packaged
food, trains running on time, and so on.
 Beautify Railway station and provide world-class passenger
amenities such as waiting for lounge and high-speed internet.
 Provide for high-capacity, speedy, intercity passenger trains.
Start more semi-high-speed train such as Humsafar, Tejas,
Antodhaya and Uday.
 More dedicated freight corridors required.
 Needs to perform as a corporate entity to carry the nation’s
freight and passengers adequately, efficiently and
economically.
  Boost Non-Fare Revenues sources such as Rail Neer and
Catering services. Can promote Train Branding which will
include both external and internal advertising on trains.
 Integrate its rail network with other modes of transport and
develop a multi-modal transportation network.

SAGARMALA:

 Sagarmala project not only helps in port led development and

trade but it will also enhance employment opportunity, increase
foreign exchange earnings for country.
 And providing proper compensation in the process of acquisition of
lands for project development.
 Enhancing NDRF to tackle problems in process of developing
project chances rivers changing their course and leading to floods.

IMPROVING HEALTH SECTOR:

Way Forward:

 Strengthen regulatory framework such as IRDA for insurance

companies.
 Raise the percentage of GDP allocated to health from 1.2%
today to 2.5% by 2022.
 Inform people and spread awareness about government
initiatives in the health sector.
 Incentivize medical personnel to work in rural areas.
 Private hospitals participation is a must for UHC.
 Awareness of PM-JAY APP

MAHILA SASHAKTIKARAN:

SHG act as a catalyst effective and serious efforts are necessary,

specifically by ensuring successful participation by SHGs in nation’s
development.

Opportunities:

 The dependency on service sector has created many

entrepreneurial opportunities for women that they can utilize to
enhance their social standing and reputation.
  promotion for women entrepreneurship through various schemes
by providing capital support.

 There is a need for more Awareness programme, training

Programmes, skill development, loans and subsidies, grievance
forums etc., promoting women entrepreneurship.

DEFENCE SECTOR:

Customs duty exemption:

 Defence has an immediate requirement of modernisation and

upgradation. For this purpose, import of defence equipment that
are not being manufactured in India are being exempted from the
basic customs duty.

 To provide greater momentum to the modernisation of the armed

forces, there is a need to enhance defence spending in how it
generates the funds:
 A case in point being, the MoD, being the largest landholder in the
government.
 A larger portion of land is not used or not creating any income or
not useful for any purpose for defence can be used to generate
income or revenue to defence.
AGR:
 Telecom operators are required to pay licence fee and spectrum
charges in the form of ‘revenue share’ to the Centre.

EASE OF DOING BUSINESS:

 Starting the business is one important component which will be

simplified.  But there are certain constraints like enforcement of
contract, registration of property, getting construction permit etc.
 So further ease of doing business requires active support from
state government. It also requires active support from judiciary.
 Then only the global rank in ease of doing business can be
expected to improve.
Thus, Ease of doing business, Make In India, FDI all are interrelated.

CENTRE STATE CORDINATION CELL: (KENDRIYA - RASHTRIYA

-SAMANVAY):

 Most important aspect of fiscal federalism is the division of

resources and functions between different levels of
government. 
 Issues between Centre and States should be sorted out by
solving vertical fiscal imbalance and horizontal fiscal imbalance
at different levels of government.

REVIVING BANKING SECTOR:

 India’s PSB count has now brought down from 27 in 2017 to 12. 
 The government’s move to merger state-owned banks aims to cut
cost of operations and achieve global scale to support fresh
investments.
 which in return helps in reviving growth to meet target of 5 trillion
dollar economy.
 The administrative problems managing the NPAs and aggressively
looking for lending opportunities.
 We will become a $5-trillion economy not by growing at our current
potential growth rate but by raising it. That requires structural
reforms. Structural measures will take time to work their way
through the system. 
 Capable banks need to be infused with capital.

The Way Forward:

 To reduce government’s stake to below 49% so that the banks

can work without any political influence.

BOOSTING HOUSING SECTOR:

Welcome step to private sector for public-private-partnership(ppp

model):

Among other initiatives, the government needs to:

 Grant infrastructure status to the entire real estate industry
making long-term financing easy for the industry.
 Fix GST rate for all types of housing at 6%.
 Reduce time taken and cost of permissions and clearances.
 Work on the mass housing model, bringing economies of scale
into the picture.
 The government could facilitate the development of affordable
housing by making surplus land held by PSUs (Public Sector
Undertakings) available for affordable housing projects.
 Also, local government’s property that is no longer useful can
be monetised by selling to developers.
 It is also recommended to incentivise developers for
infrastructure and last mile connectivity development in semi-
urban centres.

ENSURING GOOD GOERNANCE:

 Enhancing urban e- governance by improving its transparency,

accountability.
 Enhancing rural empowerment and employment.
 Providing employment oppurtunities under MNRRGA with the
implementation of infrastructure developments like highway
projects, port development.
 And also laying stepping stone to improve R&D for making india
global manufacturing hub which provides employment
oppurtunities to skilled people.
 Ensuring transparency in e- tax assessment.

SPACE PROGRAMME:

 Encouraging space programmes and focusing on moon mission

programmes.