Reading Time: 7 mins The Economic Survey of 2019-20 argued for the need to eliminate crony capitalism in order to ensure public welfare. It suggested the promotion of pro-business policies that does not let companies and businesses form monopolies and survive even in the absence of efficiency and growth. The elimination of cronyism with strong political will is vital now more than ever as there is a high possibility of large businesses making use of their economic muscles to influence political decisions amid the coronavirus-led economic crisis.
Reading Time: 6 mins The COVID-19 crisis has affected businesses across India in various ways like a drop in demand, labour shortage, supply chain disruption, etc. One of the impacts of the crisis is on the firms’ ability to fulfil obligations under various contracts in India. In this context, firms are looking at the ‘Force Majeure’ clause to provide respite in times of such unforeseen crises not only in the present but also in the future.
Reading Time: 15 mins Despite the slowdown in the global economy, inflows of foreign investment into India has not been impacted. In fact, India is among the top 10 recipients of the FDI in 2019, attracting $49 billion inflows, a 16% increase when compared to last year. However, the majority went to the service sector. India has failed to attract investments in other vital sectors like the manufacturing sector that is currently facing a crisis. To add to the woes of these sectors, recently, new modifications were made in India’s FDI policy as a countermeasure to “opportunistic takeover” of domestic firms by foreign entities. This new rule targets China in particular as it is currently making use of the economic crisis by investing in stressed sectors in many countries across the world.
Reading Time: 8 mins Startups are a vital part of the Indian economy as they promote economic growth, create employment and foster a culture of innovation. The Indian government launched the Startup India Campaign, recognising entrepreneurship as an increasingly important strategy to fuel productivity growth and wealth creation in India. During the Union Budget 2020, the Finance Minister gave high emphasis on measures taken to promote and support startups as they are going to the driver of the Indian economy in the near future. From infrastructure boost to easing tax burdens, the budget has proposed numerous benefits for the startups. The recent economic survey pointed out an increase in startups in India. However, many are opting to register overseas due to complicated compliance norms and loss-inflicting laws. Necessary reforms to ensure ease of doing business for the startups is vital for the success of the startup India initiative.
Reading Time: 6 mins India is largely an agrarian economy. More than 50% of its population is dependent on the agricultural sector for its livelihood and survival, though the returns are very low. The service sector, on the other hand, employs very few of the Indian labour force and its return nearly 60% of the Indian GDP. This is highly unfavourable for the Indian economy. To change this current trend, it is necessary to enhance the manufacturing sector. This can greatly boost India’s economic growth and solve the current unemployment crisis. The Make in India is a major step towards this direction.
Reading Time: 6 mins
The Competition Commission of India (CCI) had turned a decade old recently. 10 years since its establishment, the Commission is undertaken numerous measures to assure ease and freedom of trade and prevention of unfair practices in the Indian market. However, the current development of technology and business models is posing new and varied challenges to the CCI.
Reading Time: 8 mins
The parliament had passed Special Economic Zone Amendment Bill, 2019. This Amendment allowed “trusts and any entity” to set up units in the SEZ. It aims to boost investment and generate employment in a wide range of economic activities, including in the infrastructure sector. This Bill opens up the possibility for all types of trusts to operate from the SEZs – public charitable trusts, private trusts run by big and small corporate houses, business trusts like the real estate investment trusts and infrastructure investment trusts and port trusts run by the government. The SEZs are of importance to the Indian economy as they are the catalyst for its growth. However, in India, its full potential is not being utilized like that of China. This new step may boost the SEZs’ potentials. However, necessary steps must be taken by the government to ensure that there is equal economic growth of the nation and not just in the SEZs.
Reading Time: 5 mins In September 2019, the Finance Minister Nirmala Sitharaman had made a deep cut in the corporate tax rate from 30% to 22%. India’s combined effective tax rate was among the highest in the world. After the tax cut, the effective tax rate for all domestic companies has been reduced to 25.17%. India’s base corporate tax, due to this move, is now on par with most Asian countries – increasing its competitiveness in the global market. This move comes in response to the brewing problem of the economic slowdown in the country. The cut in the corporate tax rate was seen as a boon by the corporates in the midst of the growing crisis within the Indian economy.
Reading Time: 4 mins
Indian judiciary, according to National Judicial Data Grid Statistics, has about 3 crores pending cases. Due to its slow pace, many prefer arbitration to solve the issues of dispute settlement, monetary recovery, etc. To encourage foreign investments and promote ease of doing business, faster judicial procedures and efficient dispute resolution are essential. Provisions to settle disputes through arbitration are provided in Arbitration and Conciliation Act, 1996. This law was amended twice: in 2015 and during the recent parliament session.