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.
Reading Time: 5 mins
Many foreign investors have pulled out of China in response to the tensions arising from the Trade War. This was made use of by countries like Vietnam, Singapore, etc., for their economic development.
India, in 2015, scraped the 2013 BIT model and brought in a new model which was in effect in 2017. This has caused an unfavourable investment environment within the country. India has also pulled out of BITs with 58 countries.
This model according to a Brookings Report is Pro-State with limited security to the foreign investors in India. India’s pulling out of BITs have created uncertainty amongst the foreign investors in India and Indian investors abroad.
Reading Time: 5 mins Recently, the World Bank has released the Ease of Doing Business Index. India has jumped 23 places in the ranking at 77th position as the country made it easier to start a business, deal with construction licenses and enabled faster cross-border trading.