ONE YEAR OF THE GOVERNMENTMAJOR REFORMS & POLICY ACTIONS

AND AGENDA GOING FORWARD

May 2015

ONE YEAR OF THE GOVERNMENTMAJOR REFORMS & POLICY ACTIONS

AND AGENDA GOING FORWARD

May 2015

ONE YEAR OF THE GOVERNMENTMAJOR REFORMS & POLICY ACTIONS

AND AGENDA GOING FORWARD

May 2015

Content

I Reforms Undertaken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 01

II Reforms Going Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

II Annexure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

1. Maintaining Fiscal Discipline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 01

2. Addressing the Subsidy Situation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 02

3. Promoting Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 03

4. Boost domestic manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 08

5. Ease of doing business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 09

6. Environment /Forest Clearances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

7. Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

8. Financial Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

9. Boost Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

10. Initiatives taken by SEBI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

11. Tackling Price Rise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

1. Economy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

2. Energy Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

3. Manufacturing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

4. Land Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

5. Infrastructure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

6. Labour laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

7. Skill Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

8. Companies Act, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

9. Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

10. Financial Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Content

I Reforms Undertaken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 01

II Reforms Going Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

II Annexure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

1. Maintaining Fiscal Discipline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 01

2. Addressing the Subsidy Situation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 02

3. Promoting Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 03

4. Boost domestic manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 08

5. Ease of doing business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 09

6. Environment /Forest Clearances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

7. Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

8. Financial Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

9. Boost Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

10. Initiatives taken by SEBI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

11. Tackling Price Rise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

1. Economy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

2. Energy Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

3. Manufacturing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

4. Land Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

5. Infrastructure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

6. Labour laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

7. Skill Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

8. Companies Act, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

9. Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

10. Financial Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

01

Reforms Undertaken

IThe last fiscal year witnessed a slew of reforms by the new government with the aim to boost industrial

growth and improve business confidence. The emphasis of the government has been on rapidly

improving ease of doing business and launching fresh initiatives like Make in India and Digital India,

streamlining environment and forest clearances, labour reforms, financial inclusion, removing critical

constraints holding up use of land and natural resources to revive investments and manufacturing.

Some of the major initiatives taken in the past one year are -

1. Maintaining Fiscal Discipline

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Roadmap for

achieving FRBM

targets

Work-in-

progress.

The fiscal deficit

has been

contained at 4%

of GDP during

2014-15, beating

its own financial

target of 4.1%.

The additional

fiscal space will be

utilized for funding

infrastructure

investment.

In the Union Budget 2014-15, the government

laid out a roadmap for achieving the fiscal

deficit target of 3 % over the next three years.

However keeping in view the need for

additional fiscal space for funding

infrastructure investment, the targets in the

Union Budget 2015-16 have been revised to:

3.9% of GDP for 2015-16; 3.5% for 2016-17 and

3.0% for 2017-18.

Clear funds held up in

disputes.

Ongoing Clearing funds

stuck in tax

disputes would

help reduce fiscal

deficit. It would

also help in

creating a

conducive

environment for

business.

A six member committee consisting of officials

from Central Board of Direct Taxes has been

set up by Ministry of Finance to suggest ways

to reduce mounting disputes at various tax

appellate forums.

Set up Expenditure

Reforms Commission

in order to contain

wasteful expenditure

of the government in

a systematic manner

every year

In progress

Interim report

submitted

before the

Budget for 2015-

16 and final

report would be

presented

before the

Budget for 2016-

17.

To contain non-

productive

expenditure.

Government has constituted an Expenditure

Management Commission under the

chairmanship of Dr. Bimal Jalan to look into

the issue of expenditure reforms

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

01

Reforms Undertaken

IThe last fiscal year witnessed a slew of reforms by the new government with the aim to boost industrial

growth and improve business confidence. The emphasis of the government has been on rapidly

improving ease of doing business and launching fresh initiatives like Make in India and Digital India,

streamlining environment and forest clearances, labour reforms, financial inclusion, removing critical

constraints holding up use of land and natural resources to revive investments and manufacturing.

Some of the major initiatives taken in the past one year are -

1. Maintaining Fiscal Discipline

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Roadmap for

achieving FRBM

targets

Work-in-

progress.

The fiscal deficit

has been

contained at 4%

of GDP during

2014-15, beating

its own financial

target of 4.1%.

The additional

fiscal space will be

utilized for funding

infrastructure

investment.

In the Union Budget 2014-15, the government

laid out a roadmap for achieving the fiscal

deficit target of 3 % over the next three years.

However keeping in view the need for

additional fiscal space for funding

infrastructure investment, the targets in the

Union Budget 2015-16 have been revised to:

3.9% of GDP for 2015-16; 3.5% for 2016-17 and

3.0% for 2017-18.

Clear funds held up in

disputes.

Ongoing Clearing funds

stuck in tax

disputes would

help reduce fiscal

deficit. It would

also help in

creating a

conducive

environment for

business.

A six member committee consisting of officials

from Central Board of Direct Taxes has been

set up by Ministry of Finance to suggest ways

to reduce mounting disputes at various tax

appellate forums.

Set up Expenditure

Reforms Commission

in order to contain

wasteful expenditure

of the government in

a systematic manner

every year

In progress

Interim report

submitted

before the

Budget for 2015-

16 and final

report would be

presented

before the

Budget for 2016-

17.

To contain non-

productive

expenditure.

Government has constituted an Expenditure

Management Commission under the

chairmanship of Dr. Bimal Jalan to look into

the issue of expenditure reforms

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

03

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Use of JAM- trinity

Jan Dhan Yojana,

Aadhaar and Mobile

numbers to offer

subsidy support to

poor households in a

targeted and less

distortive way.

Ongoing Better targeting of

Beneficiaries

Government, since the last one year, has taken

several steps to widen the scope of DBT that

was launched in January 2013.

According to UIDAI, around 10 crore Aadhaar

numbers have been linked to bank accounts of

Aadhaar holders, enabling these individuals to

digitally receive government welfare subsidies

and other payments directly into their bank

accounts and ensure that welfare schemes

reach the targeted beneficiaries.

Centre has made Electronic transfers

mandatory to beneficiaries of all schemes that

involve any kind of cash benefits. All

ministries have been asked to use DBT for all

Central sector as well as Centrally sponsored

schemes from April 2015.

The Centre has now also begun to roll out

modified DBTL or Pahal for transfer of cooking

gas subsidy directly into beneficiary's

accounts.

3. Promoting Investments

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Encourage FDI in real

estate, defence,

construction

Changes

notified

It would make it

attractive for

foreign companies

to set up

manufacturing

facilities in the

sector

To have a multiplier

effect on the

economy as the

sector has strong

backward and

forward linkages.

FDI in defence sector raised to 49% from 26% with full Indian management and control through the FIPB route.

Railways - Allowed 100% private and FDI investment under automatic route in Rail infrastructure ( construction, operation and maintenance of (i) Suburban corridor projects through PPP, (ii) High speed train projects, (iii) Dedicated freight lines, (iv) Rolling stock including train sets and locomotives/coaches manufacturing and maintenance facilities, (v) Railway Electrification, (vi) Signaling systems, (vii) Freight terminals, (viii) Passenger terminals, (ix) Infrastructure in industrial park pertaining to railway line/sidings including electrified railway lines and connectivity to main railway line and (x) Mass Rapid Transport Systems) subject to meeting sectoral laws and with the condition that FDI beyond 49% in sensitive areas from security point of view will be approved by the Cabinet Committee on Security on a case to case basis.

02

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Introduction of GST In progress. Referred to select committee of Rajya Sabha Government has indicated that the likely date for the introduction of GST is 1. 04. 2016

GST will lead to the

creation of a unified

market for

facilitating

seamless

movement of goods

across states and

reduce the

transaction cost of

businesses.

Government has introduced the Constitutional

amendment Bill on GST on December 19, 2014.

It has been passed in the Lok Sabha.

Disinvestment in

public sector

undertaking (PSUs)

Ongoing Stake sale to add to

revenue receipts,

contain fiscal

deficit and help

channelize funds

for developmental

priorities like

infrastructure.

The Disinvestment target has been raised to

Rs.69, 500 crores for the current fiscal, of

which Rs.41,000 is to be raised from stake sale

of PSU's.

Recently the government has secured

approval to sell stake worth Rs.50,000 crore in

20 PSUs. Apart from a 10% stake sale in Indian

Oil Corp. (IOC) and 5% in National Thermal

Power Corp (NTPC), other companies included

in the list are ONGC, Dredging Corporation of

India, Power Finance Corp., NMDC, Nalco,

BHEL, MMTC, National Fertilizers, Rashtriya

Chemicals and Fertilizers, Hindustan Copper,

Coal India, State Trading Corp, India Tourism

Development Corp, Engineers India, MOIL,

SJVN, Mangalore Refinery Petrochemicals,

Rural Electrification Corp, among others.

Additionally, in order to make stake sale in

ONGC, IOC and GAIL more attractive, the

government has decided to scrap the fuel

subsidy sharing mechanism and bear the

entire subsidy burden of the oil marketing

companies for 2015-16

2. Addressing The Subsidy Situation

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Diesel Price

Deregulation to Phase

out subsidies for fuels

Complete To reduce key fiscal

risks and phase out

subsidies.

Diesel prices were deregulated in October

2014.

At present PDS Kerosene and Subsidized

Domestic LPG are being regulated by the

Government. Prices of all other petroleum

products, including Petrol and diesel, are now

decided by the Public Sector Oil Marketing

Companies (OMCs) as per market conditions.

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

03

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Use of JAM- trinity

Jan Dhan Yojana,

Aadhaar and Mobile

numbers to offer

subsidy support to

poor households in a

targeted and less

distortive way.

Ongoing Better targeting of

Beneficiaries

Government, since the last one year, has taken

several steps to widen the scope of DBT that

was launched in January 2013.

According to UIDAI, around 10 crore Aadhaar

numbers have been linked to bank accounts of

Aadhaar holders, enabling these individuals to

digitally receive government welfare subsidies

and other payments directly into their bank

accounts and ensure that welfare schemes

reach the targeted beneficiaries.

Centre has made Electronic transfers

mandatory to beneficiaries of all schemes that

involve any kind of cash benefits. All

ministries have been asked to use DBT for all

Central sector as well as Centrally sponsored

schemes from April 2015.

The Centre has now also begun to roll out

modified DBTL or Pahal for transfer of cooking

gas subsidy directly into beneficiary's

accounts.

3. Promoting Investments

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Encourage FDI in real

estate, defence,

construction

Changes

notified

It would make it

attractive for

foreign companies

to set up

manufacturing

facilities in the

sector

To have a multiplier

effect on the

economy as the

sector has strong

backward and

forward linkages.

FDI in defence sector raised to 49% from 26% with full Indian management and control through the FIPB route.

Railways - Allowed 100% private and FDI investment under automatic route in Rail infrastructure ( construction, operation and maintenance of (i) Suburban corridor projects through PPP, (ii) High speed train projects, (iii) Dedicated freight lines, (iv) Rolling stock including train sets and locomotives/coaches manufacturing and maintenance facilities, (v) Railway Electrification, (vi) Signaling systems, (vii) Freight terminals, (viii) Passenger terminals, (ix) Infrastructure in industrial park pertaining to railway line/sidings including electrified railway lines and connectivity to main railway line and (x) Mass Rapid Transport Systems) subject to meeting sectoral laws and with the condition that FDI beyond 49% in sensitive areas from security point of view will be approved by the Cabinet Committee on Security on a case to case basis.

02

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Introduction of GST In progress. Referred to select committee of Rajya Sabha Government has indicated that the likely date for the introduction of GST is 1. 04. 2016

GST will lead to the

creation of a unified

market for

facilitating

seamless

movement of goods

across states and

reduce the

transaction cost of

businesses.

Government has introduced the Constitutional

amendment Bill on GST on December 19, 2014.

It has been passed in the Lok Sabha.

Disinvestment in

public sector

undertaking (PSUs)

Ongoing Stake sale to add to

revenue receipts,

contain fiscal

deficit and help

channelize funds

for developmental

priorities like

infrastructure.

The Disinvestment target has been raised to

Rs.69, 500 crores for the current fiscal, of

which Rs.41,000 is to be raised from stake sale

of PSU's.

Recently the government has secured

approval to sell stake worth Rs.50,000 crore in

20 PSUs. Apart from a 10% stake sale in Indian

Oil Corp. (IOC) and 5% in National Thermal

Power Corp (NTPC), other companies included

in the list are ONGC, Dredging Corporation of

India, Power Finance Corp., NMDC, Nalco,

BHEL, MMTC, National Fertilizers, Rashtriya

Chemicals and Fertilizers, Hindustan Copper,

Coal India, State Trading Corp, India Tourism

Development Corp, Engineers India, MOIL,

SJVN, Mangalore Refinery Petrochemicals,

Rural Electrification Corp, among others.

Additionally, in order to make stake sale in

ONGC, IOC and GAIL more attractive, the

government has decided to scrap the fuel

subsidy sharing mechanism and bear the

entire subsidy burden of the oil marketing

companies for 2015-16

2. Addressing The Subsidy Situation

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Diesel Price

Deregulation to Phase

out subsidies for fuels

Complete To reduce key fiscal

risks and phase out

subsidies.

Diesel prices were deregulated in October

2014.

At present PDS Kerosene and Subsidized

Domestic LPG are being regulated by the

Government. Prices of all other petroleum

products, including Petrol and diesel, are now

decided by the Public Sector Oil Marketing

Companies (OMCs) as per market conditions.

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

05

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Approval to

innovative

mechanism for

utilization of stranded

gas based generation

capacity-

An estimated capacity

of 28,000 mw of coal

capacity has been

lying idle impacting

investors and banks as

there is no gas to

operate these power

plants. Gas production

in the country has

fallen sharply and

these plants lie idle

and investors are left

with little option.

To benefit investors

who are servicing

high debt that has

been taken for the

power plants which

have been sitting

idle. Gas is a leaner

fuel and this will

also ensure greater

grid stability as

these power plants

can be ramped up

faster.

Government has now decided to help these

stranded plants begin operations by

facilitating imported gas or LNG which will be

given as fuel to these power plants. The

government is also providing a subsidy to

distribution companies so that the power

generated through imported gas can be made

affordable. This is being done through a gas

pooling mechanism by which cheaper

domestic gas and imported LNG will be

pooled together to offer a lower average price

of gas.

04

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Construction Development - The Government has issued the Press Note No. 10 on 3rd December, 2014 amending the FDI policy regarding Construction Sector. Amended policy includes easing of area restriction norms, reduction of minimum capitalization and easy exit from project.

Further, in order to give boost to low cost affordable housing, it has been provided that conditions of area restriction and minimum capitalization will not apply to cases committing 30% of the project cost towards affordable housing.

The Cabinet Committee on Economic Affairs (CCEA) has approved the proposal of DIPP to review the investment limit for cases requiring prior approval of FIPB/ CCEA.

Review of investment limit for cases requiring prior approval from FIPB

Completed The decision is a significant step to further liberalize FDI policy. Domestic and global perceptions would get a fillip and so would the environment for doing business in the country.

The Union Cabinet has given its approval to review FDI policy for investments by Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs). The investments by the above mentioned entities will now be treated as domestic investment but they will not be allowed to repatriate the money overseas.

The government has also approved an amendment to Schedule 4 of the Foreign Exchange Management Act (FEMA) Regulations, that NRI investments would be 'deemed to be domestic investment made by residents'.

FDI norms for overseas Indians relaxed

Completed In this effect, overseas Indians would fall outside the FDI ceilings and the space vacated by them can be filled by foreign investors thereby attracting more foreign investments and greater inflow of foreign exchange remittances.

For management and reallocation of 204 coal mines/blocks cancelled by Hon'ble Supreme Court of India, Government had promulgated 'the Coal Mines (Special Provisions) Second Ordinance, 2014' on 26.12.2014.

E auction of Coal Blocks

Government has promulgated 'the Coal Mines (Special Provisions) Second Ordinance, 2014' on 26.12.2014 for management and reallocation of 204 coal mines/blocks cancelled by Hon'ble Supreme Court of India,.

Ongoing.

Completed

auctioning of

large number of

cancelled coal

blocks through

a transparent

mechanism that

can now be

used for

allocation of

other natural

resources.

The entire process of e-auctioning through a nominated authority, who may engage experts to recommend re-allotment, is likely to provide the much-needed transparency to the coal allocation process to boost investor confidence due to transparency in the process and reduce fuel availability risks.

New Gas pricing

Formula

The new price has been notified by the government.

The Government

ended the impasse

and uncertainty on

domestic gas

pricing and has

taken the first step

towards gas sector

reform with the

announcement of

gas price

guidelines in

November 2014.

The Government has approved new gas pricing formula and issued Gas price guidelines which hiked the gas prices to USD 5.61 per mmscmd and these prices are likely to be revised every six months.

Mainstreaming PPP

by setting up 3P

institute

Ongoing 3PI when

implemented

would provide

project

implementation

and contract

management

support and would

consequently

strengthen

capacities for

executing projects,

advocacy and

communication.

3PI would be a not-for-profit professional body

which would serve as a repository of

information for PPPs in India. The objective of

this institution would be to look at issues

relating to project structuring, valuation,

financing structures etc.

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

05

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Approval to

innovative

mechanism for

utilization of stranded

gas based generation

capacity-

An estimated capacity

of 28,000 mw of coal

capacity has been

lying idle impacting

investors and banks as

there is no gas to

operate these power

plants. Gas production

in the country has

fallen sharply and

these plants lie idle

and investors are left

with little option.

To benefit investors

who are servicing

high debt that has

been taken for the

power plants which

have been sitting

idle. Gas is a leaner

fuel and this will

also ensure greater

grid stability as

these power plants

can be ramped up

faster.

Government has now decided to help these

stranded plants begin operations by

facilitating imported gas or LNG which will be

given as fuel to these power plants. The

government is also providing a subsidy to

distribution companies so that the power

generated through imported gas can be made

affordable. This is being done through a gas

pooling mechanism by which cheaper

domestic gas and imported LNG will be

pooled together to offer a lower average price

of gas.

04

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Construction Development - The Government has issued the Press Note No. 10 on 3rd December, 2014 amending the FDI policy regarding Construction Sector. Amended policy includes easing of area restriction norms, reduction of minimum capitalization and easy exit from project.

Further, in order to give boost to low cost affordable housing, it has been provided that conditions of area restriction and minimum capitalization will not apply to cases committing 30% of the project cost towards affordable housing.

The Cabinet Committee on Economic Affairs (CCEA) has approved the proposal of DIPP to review the investment limit for cases requiring prior approval of FIPB/ CCEA.

Review of investment limit for cases requiring prior approval from FIPB

Completed The decision is a significant step to further liberalize FDI policy. Domestic and global perceptions would get a fillip and so would the environment for doing business in the country.

The Union Cabinet has given its approval to review FDI policy for investments by Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs). The investments by the above mentioned entities will now be treated as domestic investment but they will not be allowed to repatriate the money overseas.

The government has also approved an amendment to Schedule 4 of the Foreign Exchange Management Act (FEMA) Regulations, that NRI investments would be 'deemed to be domestic investment made by residents'.

FDI norms for overseas Indians relaxed

Completed In this effect, overseas Indians would fall outside the FDI ceilings and the space vacated by them can be filled by foreign investors thereby attracting more foreign investments and greater inflow of foreign exchange remittances.

For management and reallocation of 204 coal mines/blocks cancelled by Hon'ble Supreme Court of India, Government had promulgated 'the Coal Mines (Special Provisions) Second Ordinance, 2014' on 26.12.2014.

E auction of Coal Blocks

Government has promulgated 'the Coal Mines (Special Provisions) Second Ordinance, 2014' on 26.12.2014 for management and reallocation of 204 coal mines/blocks cancelled by Hon'ble Supreme Court of India,.

Ongoing.

Completed

auctioning of

large number of

cancelled coal

blocks through

a transparent

mechanism that

can now be

used for

allocation of

other natural

resources.

The entire process of e-auctioning through a nominated authority, who may engage experts to recommend re-allotment, is likely to provide the much-needed transparency to the coal allocation process to boost investor confidence due to transparency in the process and reduce fuel availability risks.

New Gas pricing

Formula

The new price has been notified by the government.

The Government

ended the impasse

and uncertainty on

domestic gas

pricing and has

taken the first step

towards gas sector

reform with the

announcement of

gas price

guidelines in

November 2014.

The Government has approved new gas pricing formula and issued Gas price guidelines which hiked the gas prices to USD 5.61 per mmscmd and these prices are likely to be revised every six months.

Mainstreaming PPP

by setting up 3P

institute

Ongoing 3PI when

implemented

would provide

project

implementation

and contract

management

support and would

consequently

strengthen

capacities for

executing projects,

advocacy and

communication.

3PI would be a not-for-profit professional body

which would serve as a repository of

information for PPPs in India. The objective of

this institution would be to look at issues

relating to project structuring, valuation,

financing structures etc.

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

0706

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Ports Implemented

“Policy for

Determination

of Tariff for

Major Port

Trusts, 2015”

has come into

effect from 13

January 2015

The new policy would lead to better standards and fairer competition between major and non-major ports, improve India's port sector's investment climate and operational efficiencies

To promote port-led direct and indirect development and to provide infrastructure to transport goods to and from ports quickly, efficiently and cost-effectively.

“Policy for Determination of Tariff for Major

Port Trusts, 2015”

Issue of policy guidelines by Tariff Authority

for Major Ports (TAMP) to determine market-

linked rates for major ports.

TAMP's guidelines suggest major ports adhere

to performance standards committed by them

in order to get the indexation benefits, where

the rates would be automatically indexed to

the Wholesale Price Index every year. If a

particular port trust does not fulfil the

performance standard, no indexation would be

allowed in the next year.

'Sagar Mala' project approved.

Insurance Bill Passed by parliament

The increase in FDI limit from 26 to 49 per cent will help attract the much needed long term capital for the sector and would have multiplier effect on the economy especially for meeting the huge infrastructure financing requirements

Insurance - The Union Cabinet had approved the promulgation of the Insurance Laws (Amendment) Ordinance 2014 to amend the Insurance Act, 1938, the General Insurance Business (Nationalization) Act, 1972 and the Insurance Regulatory and Development Authority Act, 1999, in accordance with the Insurance Laws (Amendment) Bill 2008, and for suitably introducing it in the Parliament in the next session for consideration and passing.

Mines and Minerals

(Development and

Regulations)

(Amendment) Bill,

2015

Passed by

parliament.

Facilitate auction of major mineral bearing mines

Owing to a variety of issues (mining scams, court judgments, administrative delays leading to lack of investor interest), mining output in the country contracted for three consecutive years of FY12, FY13 and FY14 by 2.0%, 2.2% and 0.6% respectively.

The Government promulgated the Mines and

Minerals (Development and Regulations)

(Amendment) Ordinance, finally paving way

to amend the 57-year old MMDR Act, in order

to introduce competitive bidding through the

auction route for allocation of notified

minerals.

Introduce the system of auction of mines to

enhance transparency in mineral allocations.

The Act empowers the Centre to prescribe

terms and conditions and procedures for

bidding which include production sharing or

royalty payment or a combination of both.

Railways It would make it

attractive for

foreign companies

to set up

manufacturing

facilities in the

sector

To have a multiplier

effect on the

economy as the

sector has strong

backward and

forward linkages.

100 per cent foreign direct investment (FDI) to

build a variety of rail infrastructure

New initiatives like bullet/semi high speed

trains and modernization of stations and

timely completion of major projects like

Dedicated Freight Corridors being monitored

closely

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Roads Speedy

implementation of

highway projects in

the north-east

Would encourage

fresh investments

and free up equity

for future projects.

Would revive

investor interest in

road building.

Set up of National Highways and

Infrastructure Development Corporation Ltd

with a mandate to develop 10,000 km of roads

in the country with a special focus on North-

East.

A comprehensive exit policy for roads has

been put in place which permits

concessionaires or developers to divest 100%

equity two years post construction.

Hybrid annuity model of highway

development introduced. Under this

innovative model, investors would be required

to contribute only 60% of the project cost

thereby relieving them of the burden of

collecting tolls.

Real Estate

Investment Trusts

(REITs)/Infrastructure

Investment Trust

(InvITs) - Government

has announced REITs

and InVITs –

innovative financing

instruments for

financing real estate

and infrastructure

projects.

Guidelines/

Regulations

issued by SEBI.

Budget 2015-16

has rationalized

capital gain tax

regime for the

sponsors of

REITs by

providing them

pass-through

benefit.

REITs have been successfully used as instruments for pooling of investments in several countries. InvITs seeks to facilitate similar structure for infrastructure projects. This will allow original equity investor to exit their investments which is expected to give a fillip to both, cash strapped real estate projects and infrastructure projects.

REITs are investment vehicles that have an

important role to play to revive construction

activity and a large quantum of funds locked

up in various completed projects

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

0706

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Ports Implemented

“Policy for

Determination

of Tariff for

Major Port

Trusts, 2015”

has come into

effect from 13

January 2015

The new policy would lead to better standards and fairer competition between major and non-major ports, improve India's port sector's investment climate and operational efficiencies

To promote port-led direct and indirect development and to provide infrastructure to transport goods to and from ports quickly, efficiently and cost-effectively.

“Policy for Determination of Tariff for Major

Port Trusts, 2015”

Issue of policy guidelines by Tariff Authority

for Major Ports (TAMP) to determine market-

linked rates for major ports.

TAMP's guidelines suggest major ports adhere

to performance standards committed by them

in order to get the indexation benefits, where

the rates would be automatically indexed to

the Wholesale Price Index every year. If a

particular port trust does not fulfil the

performance standard, no indexation would be

allowed in the next year.

'Sagar Mala' project approved.

Insurance Bill Passed by parliament

The increase in FDI limit from 26 to 49 per cent will help attract the much needed long term capital for the sector and would have multiplier effect on the economy especially for meeting the huge infrastructure financing requirements

Insurance - The Union Cabinet had approved the promulgation of the Insurance Laws (Amendment) Ordinance 2014 to amend the Insurance Act, 1938, the General Insurance Business (Nationalization) Act, 1972 and the Insurance Regulatory and Development Authority Act, 1999, in accordance with the Insurance Laws (Amendment) Bill 2008, and for suitably introducing it in the Parliament in the next session for consideration and passing.

Mines and Minerals

(Development and

Regulations)

(Amendment) Bill,

2015

Passed by

parliament.

Facilitate auction of major mineral bearing mines

Owing to a variety of issues (mining scams, court judgments, administrative delays leading to lack of investor interest), mining output in the country contracted for three consecutive years of FY12, FY13 and FY14 by 2.0%, 2.2% and 0.6% respectively.

The Government promulgated the Mines and

Minerals (Development and Regulations)

(Amendment) Ordinance, finally paving way

to amend the 57-year old MMDR Act, in order

to introduce competitive bidding through the

auction route for allocation of notified

minerals.

Introduce the system of auction of mines to

enhance transparency in mineral allocations.

The Act empowers the Centre to prescribe

terms and conditions and procedures for

bidding which include production sharing or

royalty payment or a combination of both.

Railways It would make it

attractive for

foreign companies

to set up

manufacturing

facilities in the

sector

To have a multiplier

effect on the

economy as the

sector has strong

backward and

forward linkages.

100 per cent foreign direct investment (FDI) to

build a variety of rail infrastructure

New initiatives like bullet/semi high speed

trains and modernization of stations and

timely completion of major projects like

Dedicated Freight Corridors being monitored

closely

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Roads Speedy

implementation of

highway projects in

the north-east

Would encourage

fresh investments

and free up equity

for future projects.

Would revive

investor interest in

road building.

Set up of National Highways and

Infrastructure Development Corporation Ltd

with a mandate to develop 10,000 km of roads

in the country with a special focus on North-

East.

A comprehensive exit policy for roads has

been put in place which permits

concessionaires or developers to divest 100%

equity two years post construction.

Hybrid annuity model of highway

development introduced. Under this

innovative model, investors would be required

to contribute only 60% of the project cost

thereby relieving them of the burden of

collecting tolls.

Real Estate

Investment Trusts

(REITs)/Infrastructure

Investment Trust

(InvITs) - Government

has announced REITs

and InVITs –

innovative financing

instruments for

financing real estate

and infrastructure

projects.

Guidelines/

Regulations

issued by SEBI.

Budget 2015-16

has rationalized

capital gain tax

regime for the

sponsors of

REITs by

providing them

pass-through

benefit.

REITs have been successfully used as instruments for pooling of investments in several countries. InvITs seeks to facilitate similar structure for infrastructure projects. This will allow original equity investor to exit their investments which is expected to give a fillip to both, cash strapped real estate projects and infrastructure projects.

REITs are investment vehicles that have an

important role to play to revive construction

activity and a large quantum of funds locked

up in various completed projects

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

09

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

5. Ease of doing business

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Introduce e-

governance &

technology based

initiatives to simplify

processes.

On-going

In February, the

government

launched e-Biz

IT based single

window

platform, a G2B

portal with

eleven

government

services. (14

services are

available)

To fast-track

approvals and put

in place a

transparent system

to minimise

processing delays

and approvals in

time bound

manner.

E-biz project of DIPP aims to digitise all central and state level approvals on a single platform.

Simplify and

rationalize labour

laws

Implemented. The planned changes are expected to help small firms reduce paperwork, end harassment, encourage entrepreneurship and help create jobs.

To Streamline the cumbersome compliance process, the labour ministry launched Shram Suvidha Portal where employers can submit a self-certified single compliance report for 16 labour laws, a new web-based labour inspection system, and unique account numbers for members of the EPFO, a revamped Rashtriya Swasthya Bima Yojana as well as a new skill development and apprenticeship scheme.

08

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Reduce cost and increase availability

of credit

Implemented Positively impact the Indian economy as banks will lower their lending rates. Would facilitate the turn of the investment cycle

After a yearlong pause the RBI in January 2015, reduced the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 8.0 per cent to 7.75 per with a view to boost growth. The RBI further reduced repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 7.5 percent in March.

RBI reduced the Statuary liquidity ratio (SLR) by 50 bps in second, third and fifth bi monthly review. The SLR currently stands at 21.5% of NDTL.

4. Boost domestic manufacturing

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Launch of “Make in

India” with an aim to

make India a global

manufacturing hub,

by government.

The Union Budget 2015-16 has provided a tremendous impetus to `Make in India' through budgetary allocations in different sectors.Tax incentives on both direct and indirect side extended to business.A number of changes in the customs and excise duty structure including rectification of inverted duty structure have been done

Increasing the

share of

manufacturing in

national GDP and

create new job

opportunities.

Make in India’ campaign aims at developing, promoting and marketing India as a leading manufacturing and investment destination and as a hub for design and innovation. The programme seeks to radically improve the Ease of Doing Business and boost up the manufacturing sector.

New Urea Investment

Policy

Ongoing Increase domestic urea production. The shortfall between demand and production of urea is around 8 million tonne which is met through imports.

New Urea Investment Policy for setting up and expansion of urea plants has been notified by the Fertilizer ministry.

Companies will get a subsidy on production only if urea production starts in the next 5 years. The subsidy will continue till 8 years after the commencement of production.

De-Reservation of remaining 20 items reserved for Micro and Small Enterprises Sector

Implemented To encourage greater investment, including the existing MSME units, to incorporate better Technologies, Standard and Brand Building to enhance Competition in Indian and Global markets for these products.

On the recommendation of Advisory Committee, Government of India vide Notification S.O. 998 (E) dated 10.04.2015 have decided to deserve remaining 20 (Twenty) items presently reserved for exclusive manufacture by MSE Sector. Accordingly following items are de-reserved:-

(i) Pickles and Chutneys, (ii) Bread, (iii) Mustard Oil (except solvent extracted), (iv) Ground Nut Oil (except solvent extracted), (v) Wooden furniture and Fixtures, (vi) Exercise Books and Registers, (vii) Wax Candles, (viii) Laundry Soap, (ix) Safety Matches, (x) Fire works, (xi) Agarbatties, (xii) Glass Bangles, (xiii) Steel Almirah, (xiv) Rolling shutters, (xv) Steel chairs – all types, (xvi) Steel tables – all other types, (xvii) Steel Furniture – all other types, (xviii) Padlocks, (xix) Stainless steel utensils, (xx) Domestic utensils – Aluminium.

For ensuring timely supply of Urea to farmers and rationalized subsidy burden. The objective is to maximize urea production and promoting energy efficiency in urea units

New Urea Policy 2015. Aims to cut fertilizer subsidy by Rs 4829 crore

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

09

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

5. Ease of doing business

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Introduce e-

governance &

technology based

initiatives to simplify

processes.

On-going

In February, the

government

launched e-Biz

IT based single

window

platform, a G2B

portal with

eleven

government

services. (14

services are

available)

To fast-track

approvals and put

in place a

transparent system

to minimise

processing delays

and approvals in

time bound

manner.

E-biz project of DIPP aims to digitise all central and state level approvals on a single platform.

Simplify and

rationalize labour

laws

Implemented. The planned changes are expected to help small firms reduce paperwork, end harassment, encourage entrepreneurship and help create jobs.

To Streamline the cumbersome compliance process, the labour ministry launched Shram Suvidha Portal where employers can submit a self-certified single compliance report for 16 labour laws, a new web-based labour inspection system, and unique account numbers for members of the EPFO, a revamped Rashtriya Swasthya Bima Yojana as well as a new skill development and apprenticeship scheme.

08

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Reduce cost and increase availability

of credit

Implemented Positively impact the Indian economy as banks will lower their lending rates. Would facilitate the turn of the investment cycle

After a yearlong pause the RBI in January 2015, reduced the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 8.0 per cent to 7.75 per with a view to boost growth. The RBI further reduced repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 7.5 percent in March.

RBI reduced the Statuary liquidity ratio (SLR) by 50 bps in second, third and fifth bi monthly review. The SLR currently stands at 21.5% of NDTL.

4. Boost domestic manufacturing

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Launch of “Make in

India” with an aim to

make India a global

manufacturing hub,

by government.

The Union Budget 2015-16 has provided a tremendous impetus to `Make in India' through budgetary allocations in different sectors.Tax incentives on both direct and indirect side extended to business.A number of changes in the customs and excise duty structure including rectification of inverted duty structure have been done

Increasing the

share of

manufacturing in

national GDP and

create new job

opportunities.

Make in India’ campaign aims at developing, promoting and marketing India as a leading manufacturing and investment destination and as a hub for design and innovation. The programme seeks to radically improve the Ease of Doing Business and boost up the manufacturing sector.

New Urea Investment

Policy

Ongoing Increase domestic urea production. The shortfall between demand and production of urea is around 8 million tonne which is met through imports.

New Urea Investment Policy for setting up and expansion of urea plants has been notified by the Fertilizer ministry.

Companies will get a subsidy on production only if urea production starts in the next 5 years. The subsidy will continue till 8 years after the commencement of production.

De-Reservation of remaining 20 items reserved for Micro and Small Enterprises Sector

Implemented To encourage greater investment, including the existing MSME units, to incorporate better Technologies, Standard and Brand Building to enhance Competition in Indian and Global markets for these products.

On the recommendation of Advisory Committee, Government of India vide Notification S.O. 998 (E) dated 10.04.2015 have decided to deserve remaining 20 (Twenty) items presently reserved for exclusive manufacture by MSE Sector. Accordingly following items are de-reserved:-

(i) Pickles and Chutneys, (ii) Bread, (iii) Mustard Oil (except solvent extracted), (iv) Ground Nut Oil (except solvent extracted), (v) Wooden furniture and Fixtures, (vi) Exercise Books and Registers, (vii) Wax Candles, (viii) Laundry Soap, (ix) Safety Matches, (x) Fire works, (xi) Agarbatties, (xii) Glass Bangles, (xiii) Steel Almirah, (xiv) Rolling shutters, (xv) Steel chairs – all types, (xvi) Steel tables – all other types, (xvii) Steel Furniture – all other types, (xviii) Padlocks, (xix) Stainless steel utensils, (xx) Domestic utensils – Aluminium.

For ensuring timely supply of Urea to farmers and rationalized subsidy burden. The objective is to maximize urea production and promoting energy efficiency in urea units

New Urea Policy 2015. Aims to cut fertilizer subsidy by Rs 4829 crore

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

11

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

The Indian Parliament has cleared 16 important amendments to the Companies Act 2013 that correct issues with provisions relating to winding up of companies, board resolutions, bail provisions and utilization of unclaimed dividends to bring the law in tune with the global standards

Implemented To effect procedural simplification, rectify certain inadvertent errors and enhance ease of doing business

Amendments to Companies Act 2013 cleared by the Parliament

6. Environment /Forest Clearances

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Transparency ensured by starting online submission of application for Environment and Forest Clearances successfully

Implemented Reduce delays and increase transparency.

To ensure that the proposals seeking grant of forest clearance are processed in time-bound and transparent manner, a web portal for online filing and monitoring the forest clearance proposal applications has been launched.

On-line submission of applications for Terms of Reference (ToRs) and Environment Clearance (EC) has been mandated w.e.f. 1st July, 2014 with a view to increasing transparency in the system and facilitating early decision making.

Process of granting permission for forest diversion upto 40 hectares for developmental projects decentralized. 90% files for this purpose won't come to the Ministry.

Implemented.The Ministry has decided to delegate powers to the Regional Empowered Committees (REC) to be constituted at each Regional Office of the Ministry to finally dispose of all forest clearance proposals seeking diversion of forest land upto 40 hectares, except the proposals relating to mining, regularization of encroachments and Hydel Projects. Draft Forest (Conservation) Second Amendment Rules, 2014 to provide for inter-alia constitution of the RECs at each Regional Office of the Ministry under Chairmanship of the concerned Addl. Principal Chief Conservator of Forests (Central) and having inter-alia three non-official experts in forestry and allied disciplines and two representative of the State/ UT concerned have been formulated and sent to the Ministry of Law and Justice for vetting before its publication in the Official Gazette

10

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

The bill (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Amendment Bill, 2014, passed in Parliament, aims at simplifying the procedures of filing returns for small firms.

Labour Implemented The amendment will exempt small industries with many of the cumbersome compliance procedures

Labour Laws Exemption from Furnishing

Returns and Maintaining Registers by

Certain Establishments Amendment Bill,

2014

Labour Implemented Encourage small manufacturing units to move toward employing an organized workforce.

Small Factories (Regulation of Employment

and Other Conditions of Service) Act, 2014.

It increases the number of laws under which

small establishments are exempt from

furnishing returns and maintaining registers

from nine to 16.

The seven Acts that are added to the list

include the Motor Transport Workers Act,

1961, the Payment of Bonus Act, 1965, the

Inter-State Migrant Workmen (Regulation of

Employment and Conditions of Service) Act,

1979, and the Building and Other Construction

Workers (Regulation of Employment and

Conditions of Service) Act, 1996.

Secondly, the Bill amends the definition of

“small” establishments to cover units

employing between 10 to 40 workers, as

against the limit of 19 workers at present.

Review antiquated laws and regulations and make them relevant to changing times

Ongoing Improve governance, facilitate ease of doing business

The government has tabled The Repealing and Amending Bill (2014) in the Lok Sabha, recommending revisions of 36 obsolete laws.

In August 2014, Prime Minister has appointed a committee to identify obsolete laws.

The Law Commission of India has submitted its report to the ministry of law & justice in September, identifying 72 such obsolete laws that warrant immediate repeal.

Single form to incorporate new enterprises

Implemented Make setting up of new business and incorporation easier for corporates and facilitate ease of doing business

The government has launched an integrated

company incorporation form which will

replace the earlier system of filling eight

separate forms. Name availability, allotment of

Director Identification Number (DIN), company

incorporation and commencement of business

will all be possible through one form- INC-29-

which is available on MCA website.

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

Reduce delays and simplify clearance process.

Process of granting permission for forest diversion for all linear projects like Road, Rail, Canals, Transmission and Pipelines decentralized.

ImplementedTo expedite grant of forest clearance to linear

projects like Road, Rail, Canal, Transmission

Lines and Pipelines, most of which are of

public utility nature, the Ministry has decided

to delegate powers to grant forest clearance to

such projects irrespective of the area of forest

land involved to the Regional Empowered

Reduce delays for

projects of public

utility.

11

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

The Indian Parliament has cleared 16 important amendments to the Companies Act 2013 that correct issues with provisions relating to winding up of companies, board resolutions, bail provisions and utilization of unclaimed dividends to bring the law in tune with the global standards

Implemented To effect procedural simplification, rectify certain inadvertent errors and enhance ease of doing business

Amendments to Companies Act 2013 cleared by the Parliament

6. Environment /Forest Clearances

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Transparency ensured by starting online submission of application for Environment and Forest Clearances successfully

Implemented Reduce delays and increase transparency.

To ensure that the proposals seeking grant of forest clearance are processed in time-bound and transparent manner, a web portal for online filing and monitoring the forest clearance proposal applications has been launched.

On-line submission of applications for Terms of Reference (ToRs) and Environment Clearance (EC) has been mandated w.e.f. 1st July, 2014 with a view to increasing transparency in the system and facilitating early decision making.

Process of granting permission for forest diversion upto 40 hectares for developmental projects decentralized. 90% files for this purpose won't come to the Ministry.

Implemented.The Ministry has decided to delegate powers to the Regional Empowered Committees (REC) to be constituted at each Regional Office of the Ministry to finally dispose of all forest clearance proposals seeking diversion of forest land upto 40 hectares, except the proposals relating to mining, regularization of encroachments and Hydel Projects. Draft Forest (Conservation) Second Amendment Rules, 2014 to provide for inter-alia constitution of the RECs at each Regional Office of the Ministry under Chairmanship of the concerned Addl. Principal Chief Conservator of Forests (Central) and having inter-alia three non-official experts in forestry and allied disciplines and two representative of the State/ UT concerned have been formulated and sent to the Ministry of Law and Justice for vetting before its publication in the Official Gazette

10

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

The bill (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Amendment Bill, 2014, passed in Parliament, aims at simplifying the procedures of filing returns for small firms.

Labour Implemented The amendment will exempt small industries with many of the cumbersome compliance procedures

Labour Laws Exemption from Furnishing

Returns and Maintaining Registers by

Certain Establishments Amendment Bill,

2014

Labour Implemented Encourage small manufacturing units to move toward employing an organized workforce.

Small Factories (Regulation of Employment

and Other Conditions of Service) Act, 2014.

It increases the number of laws under which

small establishments are exempt from

furnishing returns and maintaining registers

from nine to 16.

The seven Acts that are added to the list

include the Motor Transport Workers Act,

1961, the Payment of Bonus Act, 1965, the

Inter-State Migrant Workmen (Regulation of

Employment and Conditions of Service) Act,

1979, and the Building and Other Construction

Workers (Regulation of Employment and

Conditions of Service) Act, 1996.

Secondly, the Bill amends the definition of

“small” establishments to cover units

employing between 10 to 40 workers, as

against the limit of 19 workers at present.

Review antiquated laws and regulations and make them relevant to changing times

Ongoing Improve governance, facilitate ease of doing business

The government has tabled The Repealing and Amending Bill (2014) in the Lok Sabha, recommending revisions of 36 obsolete laws.

In August 2014, Prime Minister has appointed a committee to identify obsolete laws.

The Law Commission of India has submitted its report to the ministry of law & justice in September, identifying 72 such obsolete laws that warrant immediate repeal.

Single form to incorporate new enterprises

Implemented Make setting up of new business and incorporation easier for corporates and facilitate ease of doing business

The government has launched an integrated

company incorporation form which will

replace the earlier system of filling eight

separate forms. Name availability, allotment of

Director Identification Number (DIN), company

incorporation and commencement of business

will all be possible through one form- INC-29-

which is available on MCA website.

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

Reduce delays and simplify clearance process.

Process of granting permission for forest diversion for all linear projects like Road, Rail, Canals, Transmission and Pipelines decentralized.

ImplementedTo expedite grant of forest clearance to linear

projects like Road, Rail, Canal, Transmission

Lines and Pipelines, most of which are of

public utility nature, the Ministry has decided

to delegate powers to grant forest clearance to

such projects irrespective of the area of forest

land involved to the Regional Empowered

Reduce delays for

projects of public

utility.

13

7. Taxation

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Non-adversarial tax

regime:

The government

made it clear that

sovereign right of the

Government to

undertake

retrospective

legislation to be

exercised with

extreme caution and

judiciousness keeping

in mind the impact of

each such measure on

the economy and the

overall investment

climate.

Implemented The Central Board

of Direct Taxes has

issued detailed

instructions to its

field formations to

ensure that the

dignity of the

taxpayers is

respected while

dealing with them,

no frivolous

demands are raised

and no

unnecessary

litigation is

continued.

The government clearly spelt out policy of the

Government in respect of retrospective

taxation in the speech of the Finance Minister

while present the Finance (No.2) Bill, 2014 in

the Lok Sabha on 10.7.2014 wherein it was

stated that:

lThe Government will not ordinarily bring

about any change retrospectively which

creates a fresh liability;

lCases which have come up in various

courts and other legal fora consequent

upon certain retrospective amendments to

the Income-tax Act, 1961 undertaken

through the Finance Act, 2012 are at

different stages of pendency and will

naturally reach their logical conclusion; and

lAll fresh cases arising out of the

retrospective amendments of 2012 in

respect of indirect transfers and coming to

the notice of the Assessing Officers will be

scrutinized by a High Level Committee to

be constituted by the CBDT before any

action is initiated in such cases.

Tax clarity and

Dispute Resolution:

Implemented Resolve thousands

of transfer pricing

disputes

Introduction of a “Roll Back” provision in the

Advanced Pricing Agreement (APA) scheme

so that an APA entered into for future

transactions is also applicable to international

transactions undertaken in previous four years

in specified circumstances

Implemented Align transfer

pricing regulations

in India with the

best available

practices

Introduction of range concept for

determination of arm's length price in transfer

pricing regulations.

Tax regime made

more predictable and

investor friendly

through improved

system of advanced

ruling and dispute

settlement.

Implemented Align transfer

pricing regulations

in India with the

best available

practices

To allow use of multiple year data for

comparability analysis under transfer pricing

regulations.

Implemented Address the

proliferation of

litigation in

domestic taxes.

Resident taxpayers enabled to obtain an

advance ruling in respect of their income tax

liability above a defined threshold.

12

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Committee being constituted at each Regional

Office of the Ministry.

The Ministry has also issued guidelines to provide that in case of linear projects in-principle approval under the Forest (Conservation) Act, 1980 may be deemed as the working permission for tree cutting and commencement of work, if the required funds for compensatory afforestation, Net Present Value, wildlife conservation plan, plantation of dwarf species of medicinal plants, and all such other compensatory levies specified in the in-principle approval are realised from the user agency.

Decentralization of powers to State Level Environment Impact Assessment Authorities (SEIAAs) for granting Environment Clearance

Implemented More projects to get appraised at state level reducing delays.

Vide Notification S.O.1599 (E) dated 25th June, 2014, more powers have been delegated to SEIAAs to grant EC to various projects. Earlier, the projects in Category 'B' were being appraised as Category 'A' at MoEF level if they were located within 10 km. of Protected Areas, Critically Polluted Areas, Eco Sensitive Areas, and Inter-state / International boundaries. Now, this distance has been reduced to 5 km. subject to stipulations stated in the aforesaid notification, implying thereby that more projects can now be considered by SEIAAs for granting ECs. Apart from this, the capacity up to which non-molasses based distilleries and mineral beneficiation activities could be considered as Category 'B' has been increased. Also, all bio-mass fuel based thermal power plants with capacity greater than or equal 15 MW have been put in Category B'. Earlier, such projects were considered as Category 'A' projects, if their capacity exceeded 20 MW.

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

Exemption from Public Consultation for the projects/activities located within the Industrial Estates/Parks.

Implemented Projects located in notified industrial estates/parks will be benefitted in terms of reduced EIA appraisal

The MOEFCC vide its Office Memorandum No.J-11013/36/2014-IA-I dated 10th December, 2014 has clarified that the exemption from public consultation, as provided for under para 7(1) III. State (3) (i) (b) of EIA Notification, 2006 is available to the projects or activities or units located within the Industrial Estates or Parks, which were notified prior to 14.09.2006, i.e., the EIA Notification, 2006 coming into force.

Clarification regarding Amendment to EIA Notification 2006: Exemption of "Industrial Shed" from

requirement of Environment

Implemented Construction of Industrial sheds as defined under Schedule of EIA notification 2006 shall not be required to undertake Environment clearance.

MOEFCC has notified S.O. 3252(E) dated 22nd December, 2014 for amendment to schedule of EIA Notification, 2006. ?The MOEFCC clarified vide its office order dated 5th March 2015 that the word 'Industrial Shed' implies building (whether RCC or otherwise) which is being used for housing plant and Machinery of industrial units and shall include Godowns and buildings connected with production related and other associated activities of the unit in the same premise.'"

13

7. Taxation

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Non-adversarial tax

regime:

The government

made it clear that

sovereign right of the

Government to

undertake

retrospective

legislation to be

exercised with

extreme caution and

judiciousness keeping

in mind the impact of

each such measure on

the economy and the

overall investment

climate.

Implemented The Central Board

of Direct Taxes has

issued detailed

instructions to its

field formations to

ensure that the

dignity of the

taxpayers is

respected while

dealing with them,

no frivolous

demands are raised

and no

unnecessary

litigation is

continued.

The government clearly spelt out policy of the

Government in respect of retrospective

taxation in the speech of the Finance Minister

while present the Finance (No.2) Bill, 2014 in

the Lok Sabha on 10.7.2014 wherein it was

stated that:

lThe Government will not ordinarily bring

about any change retrospectively which

creates a fresh liability;

lCases which have come up in various

courts and other legal fora consequent

upon certain retrospective amendments to

the Income-tax Act, 1961 undertaken

through the Finance Act, 2012 are at

different stages of pendency and will

naturally reach their logical conclusion; and

lAll fresh cases arising out of the

retrospective amendments of 2012 in

respect of indirect transfers and coming to

the notice of the Assessing Officers will be

scrutinized by a High Level Committee to

be constituted by the CBDT before any

action is initiated in such cases.

Tax clarity and

Dispute Resolution:

Implemented Resolve thousands

of transfer pricing

disputes

Introduction of a “Roll Back” provision in the

Advanced Pricing Agreement (APA) scheme

so that an APA entered into for future

transactions is also applicable to international

transactions undertaken in previous four years

in specified circumstances

Implemented Align transfer

pricing regulations

in India with the

best available

practices

Introduction of range concept for

determination of arm's length price in transfer

pricing regulations.

Tax regime made

more predictable and

investor friendly

through improved

system of advanced

ruling and dispute

settlement.

Implemented Align transfer

pricing regulations

in India with the

best available

practices

To allow use of multiple year data for

comparability analysis under transfer pricing

regulations.

Implemented Address the

proliferation of

litigation in

domestic taxes.

Resident taxpayers enabled to obtain an

advance ruling in respect of their income tax

liability above a defined threshold.

12

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Committee being constituted at each Regional

Office of the Ministry.

The Ministry has also issued guidelines to provide that in case of linear projects in-principle approval under the Forest (Conservation) Act, 1980 may be deemed as the working permission for tree cutting and commencement of work, if the required funds for compensatory afforestation, Net Present Value, wildlife conservation plan, plantation of dwarf species of medicinal plants, and all such other compensatory levies specified in the in-principle approval are realised from the user agency.

Decentralization of powers to State Level Environment Impact Assessment Authorities (SEIAAs) for granting Environment Clearance

Implemented More projects to get appraised at state level reducing delays.

Vide Notification S.O.1599 (E) dated 25th June, 2014, more powers have been delegated to SEIAAs to grant EC to various projects. Earlier, the projects in Category 'B' were being appraised as Category 'A' at MoEF level if they were located within 10 km. of Protected Areas, Critically Polluted Areas, Eco Sensitive Areas, and Inter-state / International boundaries. Now, this distance has been reduced to 5 km. subject to stipulations stated in the aforesaid notification, implying thereby that more projects can now be considered by SEIAAs for granting ECs. Apart from this, the capacity up to which non-molasses based distilleries and mineral beneficiation activities could be considered as Category 'B' has been increased. Also, all bio-mass fuel based thermal power plants with capacity greater than or equal 15 MW have been put in Category B'. Earlier, such projects were considered as Category 'A' projects, if their capacity exceeded 20 MW.

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

Exemption from Public Consultation for the projects/activities located within the Industrial Estates/Parks.

Implemented Projects located in notified industrial estates/parks will be benefitted in terms of reduced EIA appraisal

The MOEFCC vide its Office Memorandum No.J-11013/36/2014-IA-I dated 10th December, 2014 has clarified that the exemption from public consultation, as provided for under para 7(1) III. State (3) (i) (b) of EIA Notification, 2006 is available to the projects or activities or units located within the Industrial Estates or Parks, which were notified prior to 14.09.2006, i.e., the EIA Notification, 2006 coming into force.

Clarification regarding Amendment to EIA Notification 2006: Exemption of "Industrial Shed" from

requirement of Environment

Implemented Construction of Industrial sheds as defined under Schedule of EIA notification 2006 shall not be required to undertake Environment clearance.

MOEFCC has notified S.O. 3252(E) dated 22nd December, 2014 for amendment to schedule of EIA Notification, 2006. ?The MOEFCC clarified vide its office order dated 5th March 2015 that the word 'Industrial Shed' implies building (whether RCC or otherwise) which is being used for housing plant and Machinery of industrial units and shall include Godowns and buildings connected with production related and other associated activities of the unit in the same premise.'"

15

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Day Speech on 15th August, 2014 was formally

launched on 28th August, 2014 at National

level by Hon'ble Prime Minister.

Gujarat International

Finance Tec-City

(GIFT)

Ongoing Will help the transition of the Indian financial markets to the next stage of development and establish it as a global capital raising hub

Offshore financial centres like GIFT are

financial centres with deep, liquid &

sophisticated capital markets and world

competitive tax & regulatory regimes with

foreign investment and offshore business flow

9. Boost Savings

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Offer incentives to

encourage savings in

different financial

instruments

Implemented Channelize

household savings

into more

productive sectors

rather than from

idle assets like

gold.

Following measures were taken to increase

savings will help promote rebalancing.

lInvestment limit under Public Provident

Fund increased from Rs 1 lakh to Rs 1.5 lakh

lA scheme exclusively for the girl child has

been notified. The scheme will provide

funds at the stage of “Education” and

“Marriage” of the girl child.

lGovernment reintroduced Kissan Vikas

Patra (KVP)

14

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

ImplementedThe scope of the Income-tax Settlement

Commission enlarged.

Implemented Improve Business confidence and encourage investments

Set up of a High Level Committee has to

interact with trade and industry on a regular

basis and ascertain areas where clarity in tax

laws is required and based on their

recommendation the Central Boards of Direct

and Indirect Taxes would issue appropriate

clarifications in a time bound manner,

wherever considered necessary.

Disclosure of Black

Money

Implemented The law will help target black money and bring transparency into the system.

The Black Money (Undisclosed Foreign Income

and Assets) and Imposition of Tax Bill, 2015

was passed by the Parliament

8. Financial Sector

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Licensing small

banks, payments

banks and other

differentiated banks:

Guidelines

issued

Deepening

financial inclusion

and inculcate

saving habits

The Reserve Bank of India (RBI) formulated

and released guidelines for licensing of

payments banks and small finance banks in

the private sector on November 27, 2014.

Cabinet Approval for

Revival of 23 District

Central Cooperative

Banks:

Ongoing The scheme for revival of unlicensed DCCBs will help in revival of these cooperative banks.

This will result in protecting the interests of depositors and catering to the credit needs of farmers.

The Cabinet approved the Scheme for revival

of 23 unlicensed District Central Cooperative

Banks (DCCBs) in four States, comprising 16 in

Uttar Pradesh, 3 in Jammu & Kashmir, 3 in

Maharashtra and 1 in West Bengal.

Under the Scheme, the total capital infusion

envisaged would be Rs. 2375.42 Crore, of

which the commitment from the Central

Government would be Rs. 673.29 Crore. State

Governments would provide Rs. 1464.59 Crore

and NABARD Rs.237.54 Crore.

Financial Inclusion

and Pradhan Mantri

Jan Dhan Yojana

(PMJDY):

Implemented Increase banking penetration and promoting financial inclusion

To increase banking penetration and

promoting financial inclusion and with the

main objective of covering all households with

at least one bank account per household

across the country, a National Mission on

Financial Inclusion named as Pradhan Mantri

Jan Dhan Yojana (PMJDY) announced by

Hon'ble Prime Minister in his Independence

A step towards creating a universal social security system in India, especially for the poor and the under-privileged and the workers in the unorganised sector.

Launch of Pradhan Mantri Suraksha Bima

Yojana (PMSBY), Pradhan Mantri Jeevan Jyoti

Bima Yojana (PMJJBY) and Atal Pension

Yojana (APV)

MUDRA Bank created with a corpus of Rs

20,000 crore and credit guarantee of Rs 3,000

crore

Will help fund the unfunded small enterprises and promote entrepreneurship in India

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

15

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Day Speech on 15th August, 2014 was formally

launched on 28th August, 2014 at National

level by Hon'ble Prime Minister.

Gujarat International

Finance Tec-City

(GIFT)

Ongoing Will help the transition of the Indian financial markets to the next stage of development and establish it as a global capital raising hub

Offshore financial centres like GIFT are

financial centres with deep, liquid &

sophisticated capital markets and world

competitive tax & regulatory regimes with

foreign investment and offshore business flow

9. Boost Savings

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Offer incentives to

encourage savings in

different financial

instruments

Implemented Channelize

household savings

into more

productive sectors

rather than from

idle assets like

gold.

Following measures were taken to increase

savings will help promote rebalancing.

lInvestment limit under Public Provident

Fund increased from Rs 1 lakh to Rs 1.5 lakh

lA scheme exclusively for the girl child has

been notified. The scheme will provide

funds at the stage of “Education” and

“Marriage” of the girl child.

lGovernment reintroduced Kissan Vikas

Patra (KVP)

14

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

ImplementedThe scope of the Income-tax Settlement

Commission enlarged.

Implemented Improve Business confidence and encourage investments

Set up of a High Level Committee has to

interact with trade and industry on a regular

basis and ascertain areas where clarity in tax

laws is required and based on their

recommendation the Central Boards of Direct

and Indirect Taxes would issue appropriate

clarifications in a time bound manner,

wherever considered necessary.

Disclosure of Black

Money

Implemented The law will help target black money and bring transparency into the system.

The Black Money (Undisclosed Foreign Income

and Assets) and Imposition of Tax Bill, 2015

was passed by the Parliament

8. Financial Sector

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Licensing small

banks, payments

banks and other

differentiated banks:

Guidelines

issued

Deepening

financial inclusion

and inculcate

saving habits

The Reserve Bank of India (RBI) formulated

and released guidelines for licensing of

payments banks and small finance banks in

the private sector on November 27, 2014.

Cabinet Approval for

Revival of 23 District

Central Cooperative

Banks:

Ongoing The scheme for revival of unlicensed DCCBs will help in revival of these cooperative banks.

This will result in protecting the interests of depositors and catering to the credit needs of farmers.

The Cabinet approved the Scheme for revival

of 23 unlicensed District Central Cooperative

Banks (DCCBs) in four States, comprising 16 in

Uttar Pradesh, 3 in Jammu & Kashmir, 3 in

Maharashtra and 1 in West Bengal.

Under the Scheme, the total capital infusion

envisaged would be Rs. 2375.42 Crore, of

which the commitment from the Central

Government would be Rs. 673.29 Crore. State

Governments would provide Rs. 1464.59 Crore

and NABARD Rs.237.54 Crore.

Financial Inclusion

and Pradhan Mantri

Jan Dhan Yojana

(PMJDY):

Implemented Increase banking penetration and promoting financial inclusion

To increase banking penetration and

promoting financial inclusion and with the

main objective of covering all households with

at least one bank account per household

across the country, a National Mission on

Financial Inclusion named as Pradhan Mantri

Jan Dhan Yojana (PMJDY) announced by

Hon'ble Prime Minister in his Independence

A step towards creating a universal social security system in India, especially for the poor and the under-privileged and the workers in the unorganised sector.

Launch of Pradhan Mantri Suraksha Bima

Yojana (PMSBY), Pradhan Mantri Jeevan Jyoti

Bima Yojana (PMJJBY) and Atal Pension

Yojana (APV)

MUDRA Bank created with a corpus of Rs

20,000 crore and credit guarantee of Rs 3,000

crore

Will help fund the unfunded small enterprises and promote entrepreneurship in India

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

16

10. Initiatives taken by SEBI

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Guidelines

issued

Improve the

governance and

functioning of the

market

SEBI Board approved amendments to SEBI (Prohibition of Insider Trading) Regulations 1992. To strengthen regulatory framework dealing with the insider trading. The amendments provide for strengthening the legal and enforcement framework, align insider trading norms with international practices, clarity in definitions and concepts and facilitate legitimate business transactions.

Approved certain proposals to review the existing regulatory framework on delisting for making it more effective by amending the SEBI (Delisting of Equity Shares) Regulations, 2009. The proposals approved, among others, includes conditions for the delisting to be successful, the process of the determination of offer price through reverse book building process, reducing timeline for completing the delisting process etc.

11. Tackling Price Rise

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Inflation as measured by Consumer Price Index (CPI) is at its lowest ever level in November 2014 (4.4 per cent) since the introduction of the new series in 2011-12.

Wholesale Price Index (WPI) for January slipped into negative territory after a hiatus of 5-1/2 years.

This has been achieved largely due to constant monitoring and measures taken such as delisting of vegetables and perishables from APMC Act, release of food grains stocks, fixing of minimum export prices for key commodities.

Addressing price

rise and corruption,

black marketing.

Fixing minimum export prices for onions and potatoes to discourage exports and increase local supply

lAsking the states to crack down hoarders in anticipation of weak monsoon.

lStates asked to delist some items which have been procured through APMC, so that they come in the open market.

lRelease of 5 mt of rice through state government to cool prices.

lThe government has increased the minimum support price (MSP) of paddy by less than 5% during July 2014- June 2015 to contain inflation

lGiving line of credit to states to import pulses and edible oil.

lGovernment set up a Price Stabilization fund to be set up with an initial amount of Rs. 500 crore.

A number of

measures have been

taken such as

delisting of

vegetables and

perishables from

APMC Act, release of

food grains stocks,

fixing of minimum

export prices for key

commodities

17

Agenda Going Forward

IIThe present Government, which is on the threshold of completing one year in office, has already

implemented several path-breaking reforms to power growth in the economy. However some crucial

reforms and policy interventions are still pending. Early passage of these reform measures are

important for attaining higher levels of productivity and competitiveness and thereby take the country

to the higher orbit of growth.

1. Economy

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Fiscal Consolidation • Rationalise Expenditure;

Eliminate leakages in

Subsidies and Social

Expenditure.

• Follow strict budgeting on

subsidy. Raise prices if the

amount allocated on

subsidy in the budget is

exceeded.

• Augment revenue:

Implement PSU

disinvestment

systematically; strategy

required on restructuring/

privatization of loss-making

PSUs (Centre & state).

• Flag-off strategic sale of

loss making PSUs.

• Improving quality of

spending; Switching from

public consumption (via

subsidy rationalisation) to

public investment.

• Eliminating

intermediaries

and leakages

would ensure

that subsidies

reach intended

beneficiaries

• Increased public

investments

would mitigate

long run

inflationary

pressures as the

latter will add to

capacity and

boost aggregate

supply potential

of the economy.

Adhering to medium term

fiscal Deficit Target 3 percent

of GDP

Subsidy Management

The estimated direct

fiscal cost of

government subsidies

(both central and

states) on items such

as rice, wheat, pulses,

sugar, kerosene,

cooking gas, naptha,

• Replace the present price

mechanism of subsidy

transfer with cash transfer

into bank accounts;

seamless linking data from

Aadhar and Jan Dhan

Scheme, and mobile

connections);

• Movement to

DBT to eliminate

intermediaries

and leakages and

ensure that

subsidies reach

intended

beneficiaries

Overhauling the subsidy

mechanism

Converting all subsidies into

direct benefit transfers

(Direct Benefit Transfers (DBT)

have presently been confined to

cooking gas subsidies, transfer

of pensions and student

scholarships)

Amendment of

prevailing SEBI

regulation and

enactment of new

regulation

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

16

10. Initiatives taken by SEBI

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Guidelines

issued

Improve the

governance and

functioning of the

market

SEBI Board approved amendments to SEBI (Prohibition of Insider Trading) Regulations 1992. To strengthen regulatory framework dealing with the insider trading. The amendments provide for strengthening the legal and enforcement framework, align insider trading norms with international practices, clarity in definitions and concepts and facilitate legitimate business transactions.

Approved certain proposals to review the existing regulatory framework on delisting for making it more effective by amending the SEBI (Delisting of Equity Shares) Regulations, 2009. The proposals approved, among others, includes conditions for the delisting to be successful, the process of the determination of offer price through reverse book building process, reducing timeline for completing the delisting process etc.

11. Tackling Price Rise

Reform / Measures Announced

Key features Status of reform/ Announcement

Likely Impact

Inflation as measured by Consumer Price Index (CPI) is at its lowest ever level in November 2014 (4.4 per cent) since the introduction of the new series in 2011-12.

Wholesale Price Index (WPI) for January slipped into negative territory after a hiatus of 5-1/2 years.

This has been achieved largely due to constant monitoring and measures taken such as delisting of vegetables and perishables from APMC Act, release of food grains stocks, fixing of minimum export prices for key commodities.

Addressing price

rise and corruption,

black marketing.

Fixing minimum export prices for onions and potatoes to discourage exports and increase local supply

lAsking the states to crack down hoarders in anticipation of weak monsoon.

lStates asked to delist some items which have been procured through APMC, so that they come in the open market.

lRelease of 5 mt of rice through state government to cool prices.

lThe government has increased the minimum support price (MSP) of paddy by less than 5% during July 2014- June 2015 to contain inflation

lGiving line of credit to states to import pulses and edible oil.

lGovernment set up a Price Stabilization fund to be set up with an initial amount of Rs. 500 crore.

A number of

measures have been

taken such as

delisting of

vegetables and

perishables from

APMC Act, release of

food grains stocks,

fixing of minimum

export prices for key

commodities

17

Agenda Going Forward

IIThe present Government, which is on the threshold of completing one year in office, has already

implemented several path-breaking reforms to power growth in the economy. However some crucial

reforms and policy interventions are still pending. Early passage of these reform measures are

important for attaining higher levels of productivity and competitiveness and thereby take the country

to the higher orbit of growth.

1. Economy

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Fiscal Consolidation • Rationalise Expenditure;

Eliminate leakages in

Subsidies and Social

Expenditure.

• Follow strict budgeting on

subsidy. Raise prices if the

amount allocated on

subsidy in the budget is

exceeded.

• Augment revenue:

Implement PSU

disinvestment

systematically; strategy

required on restructuring/

privatization of loss-making

PSUs (Centre & state).

• Flag-off strategic sale of

loss making PSUs.

• Improving quality of

spending; Switching from

public consumption (via

subsidy rationalisation) to

public investment.

• Eliminating

intermediaries

and leakages

would ensure

that subsidies

reach intended

beneficiaries

• Increased public

investments

would mitigate

long run

inflationary

pressures as the

latter will add to

capacity and

boost aggregate

supply potential

of the economy.

Adhering to medium term

fiscal Deficit Target 3 percent

of GDP

Subsidy Management

The estimated direct

fiscal cost of

government subsidies

(both central and

states) on items such

as rice, wheat, pulses,

sugar, kerosene,

cooking gas, naptha,

• Replace the present price

mechanism of subsidy

transfer with cash transfer

into bank accounts;

seamless linking data from

Aadhar and Jan Dhan

Scheme, and mobile

connections);

• Movement to

DBT to eliminate

intermediaries

and leakages and

ensure that

subsidies reach

intended

beneficiaries

Overhauling the subsidy

mechanism

Converting all subsidies into

direct benefit transfers

(Direct Benefit Transfers (DBT)

have presently been confined to

cooking gas subsidies, transfer

of pensions and student

scholarships)

Amendment of

prevailing SEBI

regulation and

enactment of new

regulation

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18 19

water, electricity,

fertilizer, iron ore and

railways is about Rs

3.8 trillion or close to

4.2 % of GDP.

(Economic Survey)

• Further explore the

possibility of merging

streams of data ie Aadhar,

Jan dhan scheme and other

census data such as socio

economic census for better

targeting of beneficiaries to

push the DBT agenda

• Merger of other

streams of data

will be useful for

expanding DBT

to areas such as

food, fertilizers

as well as to

areas such as

issuing soil

health cards and

kisan credit cards

• Success in this

area will allow

the price

mechanism to

perform its role of

efficiently

allocating

resources and

boosting long-

run growth

Creating a strong database for

facilitating better Identification

and targeting of beneficiaries

and reducing leakages

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Food Subsidy • Cash transfers to the

beneficiaries of the public

distribution system

• Discontinuing the present

price-based food subsidy,

instead facilitating Direct

Cash Transfer of Food

subsidy, linking it to Jan

Dhan bank Account and

Aadhar number.

• According to panel on restructuring Food Corporation of India, the leakages in PDS is as high as 47%, meaning a large chunk of subsidized rations are not reaching the intended beneficiaries. Further by moving towards cash transfers the government could save Rs.30,000 crore every year.

• The money thus saved can be ploughed back to agriculture through investments in irrigation and building better roads and market network.

Rationalization of Food

Subsidies

Move to a direct cash transfer

system for public distribution

system (PDS)

Fuel Subsidy Total expenditure on subsidies

is expected to decline by 8.6%

in FY16 largely on the back of

50% decline in petroleum

subsidy. Hence, going

Forward following the diesel

model, the government should

contemplate monthly

increases in LPG and

kerosene rates as well

• Reduce the number of

subsidized cylinders per

person or increase the

price of LPG in modest

tranches periodically

• Raise the price of

Kerosene by small amount

in a periodical manner.

• Implement direct cash

transfer for kerosene

subsidies to cut down on

leakages. (According to

Economic Survey the

present subsidy in

kerosene was leading to

huge leakages of around

41%. The data from

Census 2011, shows that

kerosene has been almost

completely replaced by

LPG in urban and semi-

urban areas and biomass

is the cooking fuel of

choice in the rural areas.

Besides, less than 2 per

cent of India's rural

households is using

kerosene as a cooking

fuel. This is used for

lightning purpose.)

• For effective targeting of

subsidies there is a need

to ensure that beneficiary

receives subsidy either for

LPG or for Kerosene but

not for both.

• DBT on kerosene should

be completed within two

years.

• Oil & gas sector

can get a big

boost if subsidy

rationalisation is

initiated for LPG

and kerosene.

Rationalization of LPG and

Kerosene Subsidy

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

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18 19

water, electricity,

fertilizer, iron ore and

railways is about Rs

3.8 trillion or close to

4.2 % of GDP.

(Economic Survey)

• Further explore the

possibility of merging

streams of data ie Aadhar,

Jan dhan scheme and other

census data such as socio

economic census for better

targeting of beneficiaries to

push the DBT agenda

• Merger of other

streams of data

will be useful for

expanding DBT

to areas such as

food, fertilizers

as well as to

areas such as

issuing soil

health cards and

kisan credit cards

• Success in this

area will allow

the price

mechanism to

perform its role of

efficiently

allocating

resources and

boosting long-

run growth

Creating a strong database for

facilitating better Identification

and targeting of beneficiaries

and reducing leakages

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Food Subsidy • Cash transfers to the

beneficiaries of the public

distribution system

• Discontinuing the present

price-based food subsidy,

instead facilitating Direct

Cash Transfer of Food

subsidy, linking it to Jan

Dhan bank Account and

Aadhar number.

• According to panel on restructuring Food Corporation of India, the leakages in PDS is as high as 47%, meaning a large chunk of subsidized rations are not reaching the intended beneficiaries. Further by moving towards cash transfers the government could save Rs.30,000 crore every year.

• The money thus saved can be ploughed back to agriculture through investments in irrigation and building better roads and market network.

Rationalization of Food

Subsidies

Move to a direct cash transfer

system for public distribution

system (PDS)

Fuel Subsidy Total expenditure on subsidies

is expected to decline by 8.6%

in FY16 largely on the back of

50% decline in petroleum

subsidy. Hence, going

Forward following the diesel

model, the government should

contemplate monthly

increases in LPG and

kerosene rates as well

• Reduce the number of

subsidized cylinders per

person or increase the

price of LPG in modest

tranches periodically

• Raise the price of

Kerosene by small amount

in a periodical manner.

• Implement direct cash

transfer for kerosene

subsidies to cut down on

leakages. (According to

Economic Survey the

present subsidy in

kerosene was leading to

huge leakages of around

41%. The data from

Census 2011, shows that

kerosene has been almost

completely replaced by

LPG in urban and semi-

urban areas and biomass

is the cooking fuel of

choice in the rural areas.

Besides, less than 2 per

cent of India's rural

households is using

kerosene as a cooking

fuel. This is used for

lightning purpose.)

• For effective targeting of

subsidies there is a need

to ensure that beneficiary

receives subsidy either for

LPG or for Kerosene but

not for both.

• DBT on kerosene should

be completed within two

years.

• Oil & gas sector

can get a big

boost if subsidy

rationalisation is

initiated for LPG

and kerosene.

Rationalization of LPG and

Kerosene Subsidy

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

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2120

• Improving the Supply

Chain of LPG and

Kerosene

• Along with implementing

cash transfers for LPG

and Kerosene the

government will have to

be take complementary

actions to address

loopholes in the supply

chain. For instance,

commissioning more

distributors to increase

LPG penetration in the

rural areas. Utilizing

mobile networks to keep

customers and

beneficiaries informed

about the time of stock

replenishment,

availability of fuel, and

the inventories to be kept

by each distributor every

month, and other relevant

information

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Create common market

across the country

• Early introduction of GST. It

is hoped that the Bill would

get accent in the Rajya

Sabha. Announce roadmap

for various steps needed for

introduction of GST wef

April 1, 2016.

• Would help to

simplify the

indirect tax

regime and raise

GDP growth by

1.5%-2%.

Implementation of GST

The Ministry of Power has

proposed a key Amendment to

the Electricity Act 2003 on

separation of carriage and

content i.e. the network and

power supply will now be

separated. This was a key CII

recommendation.

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Power & Coal The proposed

amendments in the

Electricity Act,

2003 are expected

to bring about

further

improvements in

Addressing financial health of

the distributing companies

Introduced Electricity

(Amendment) Bill, 2014 in the

Lok Sabha on 19th December,

2014

2. Energy Sector

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

grid security,

efficiency in

distribution sector

through separation

of carriage and

content,

rationalization of

tariff, dynamic and

responsible

regulatory

framework with the

overall objective of

sustainable growth

of the sector aimed

at consumer

benefits.

This will bring in

more private

players to

participate on the

supply side of the

business and will

therefore make the

distribution

segment of the

power value chain

more competitive.

The amendments proposed,

broadly cover areas like Grid

Security, Open Access,

promotion of renewable energy,

separation of Carriage &

Content in distribution sector,

rationalization of tariff

determination process and

performance oversight of

Regulatory Commissions etc.

Hydrocarbons Need for a roadmap for

transition to a market based

gas pricing.

Some reforms are needed on

the New Domestic Natural

Gas Pricing Guideline, 2014 to

further promote investment

• For instance, inclusion of the

Russian gas price marker in

the formula does not seem

to have much basis as

Russia does not have a

market price for domestic

gas.

• Similarly, while the

application of premium

reinforces the Government's

recognition of the capital

intensive nature, the

applicability of this

premium only to discoveries

after 1 November, 2014 will

Facilitate

development of a

gas market

,encourage the

development of

India's gas

resources

Upstream segment

The Government ended the long

impasse and uncertainty on

domestic gas pricing and has

taken the first step towards gas

sector reform. The Government

issued Gas price guidelines

which hiked the gas prices to

USD 5.61 per mmscmd and

these prices are likely to be

revised every six months.

However, there are a few policy

reforms which are pending. In

the upstream segment there is a

need for a roadmap for

transition to a market based gas

pricing. Also, as the basis of the

formula is likely to deter

investments some reforms are

needed on the New Domestic

Natural Gas Pricing Guideline,

2014.

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2120

• Improving the Supply

Chain of LPG and

Kerosene

• Along with implementing

cash transfers for LPG

and Kerosene the

government will have to

be take complementary

actions to address

loopholes in the supply

chain. For instance,

commissioning more

distributors to increase

LPG penetration in the

rural areas. Utilizing

mobile networks to keep

customers and

beneficiaries informed

about the time of stock

replenishment,

availability of fuel, and

the inventories to be kept

by each distributor every

month, and other relevant

information

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Create common market

across the country

• Early introduction of GST. It

is hoped that the Bill would

get accent in the Rajya

Sabha. Announce roadmap

for various steps needed for

introduction of GST wef

April 1, 2016.

• Would help to

simplify the

indirect tax

regime and raise

GDP growth by

1.5%-2%.

Implementation of GST

The Ministry of Power has

proposed a key Amendment to

the Electricity Act 2003 on

separation of carriage and

content i.e. the network and

power supply will now be

separated. This was a key CII

recommendation.

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Power & Coal The proposed

amendments in the

Electricity Act,

2003 are expected

to bring about

further

improvements in

Addressing financial health of

the distributing companies

Introduced Electricity

(Amendment) Bill, 2014 in the

Lok Sabha on 19th December,

2014

2. Energy Sector

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

grid security,

efficiency in

distribution sector

through separation

of carriage and

content,

rationalization of

tariff, dynamic and

responsible

regulatory

framework with the

overall objective of

sustainable growth

of the sector aimed

at consumer

benefits.

This will bring in

more private

players to

participate on the

supply side of the

business and will

therefore make the

distribution

segment of the

power value chain

more competitive.

The amendments proposed,

broadly cover areas like Grid

Security, Open Access,

promotion of renewable energy,

separation of Carriage &

Content in distribution sector,

rationalization of tariff

determination process and

performance oversight of

Regulatory Commissions etc.

Hydrocarbons Need for a roadmap for

transition to a market based

gas pricing.

Some reforms are needed on

the New Domestic Natural

Gas Pricing Guideline, 2014 to

further promote investment

• For instance, inclusion of the

Russian gas price marker in

the formula does not seem

to have much basis as

Russia does not have a

market price for domestic

gas.

• Similarly, while the

application of premium

reinforces the Government's

recognition of the capital

intensive nature, the

applicability of this

premium only to discoveries

after 1 November, 2014 will

Facilitate

development of a

gas market

,encourage the

development of

India's gas

resources

Upstream segment

The Government ended the long

impasse and uncertainty on

domestic gas pricing and has

taken the first step towards gas

sector reform. The Government

issued Gas price guidelines

which hiked the gas prices to

USD 5.61 per mmscmd and

these prices are likely to be

revised every six months.

However, there are a few policy

reforms which are pending. In

the upstream segment there is a

need for a roadmap for

transition to a market based gas

pricing. Also, as the basis of the

formula is likely to deter

investments some reforms are

needed on the New Domestic

Natural Gas Pricing Guideline,

2014.

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

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22 23

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

prevent any of the

discovered resources to

come into production.

• Government also needs to

revisit the production

sharing contract (PSC)

extension which should be

based on global best

practices with minimal

changes from existing

contract to send right policy

signals to existing and new

investors.

There is a need for clarity on

the roadmap to build a gas

grid for the country through

the Public private partnership.

The heavy

investments

required for the

development of

pipelines makes

the PPP model

critical since the

private companies.

on their own,

would not be able

to invest so heavily

in the development

of pipelines.The

Finance Minister, in

his Budget speech,

has announced

that the existing

gas pipeline

infrastructure of

15,000 km will be

doubled by using

an appropriate PPP

model,

Midstream segment

Renewable Energy • Provide clear visibility to

reassure industry of

stability in policy and

taxation.

This will expedite

and accelerate

investments in the

sector

Renewable Energy Act

• For grid balancing, the

Regional Load Dispatch

Centre could undertake

modelling exercises for the

entire region as forecasts

over a larger region tend to

be accurate.

Robust and stable grid

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

• To enable access to low cost

financing, multilateral

funding channelled through

agencies like Indian

Renewable Energy

Development Agency

(IREDA) could be

considered. Funds that are

part of climate change

negotiations could be

deployed to lower debt cost.

Also long term tenors will

lead to better cash flows.

Greater quantum of

capital and low-

cost financing

would support

accelerated RE

deployment, reduce

end-consumer

tariffs, and thus

achieve economies

of scale.

Low cost financing

• Establish standardized

PPAs to rationalize costs

and minimize risks for

producers and buyers

Will minimize risks

for producers,

buyers and lenders

Standardized Power Purchase

Agreements (PPA) across

states and utilities

• Speedy implementation of

goods and service tax to

resolve the cascading tax

structure and consolidate

the different layers of

taxation.

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Manufacturing Will establish a

simplified and

streamlined tax

regime in country;

attract investments

from global players;

Generate more

revenues; establish

the single market

concept, reduce tax

related transaction

costs for the

industry

Passage and implementation of

Goods and Service Tax

3. Manufacturing

• Revamp archaic labour

reforms to bring them at par

with global market

dynamics.

• Rationalize and combine the

existing 44 Central Acts and

State Level Labour Laws;

formulate separate labour

laws for MSME and services

Will support in

reviving the

manufacturing

sector and creating

Reforms pertaining to labour,

regulatory clearances, tax

administrative services and

legal processes

Manufacturing

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Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

prevent any of the

discovered resources to

come into production.

• Government also needs to

revisit the production

sharing contract (PSC)

extension which should be

based on global best

practices with minimal

changes from existing

contract to send right policy

signals to existing and new

investors.

There is a need for clarity on

the roadmap to build a gas

grid for the country through

the Public private partnership.

The heavy

investments

required for the

development of

pipelines makes

the PPP model

critical since the

private companies.

on their own,

would not be able

to invest so heavily

in the development

of pipelines.The

Finance Minister, in

his Budget speech,

has announced

that the existing

gas pipeline

infrastructure of

15,000 km will be

doubled by using

an appropriate PPP

model,

Midstream segment

Renewable Energy • Provide clear visibility to

reassure industry of

stability in policy and

taxation.

This will expedite

and accelerate

investments in the

sector

Renewable Energy Act

• For grid balancing, the

Regional Load Dispatch

Centre could undertake

modelling exercises for the

entire region as forecasts

over a larger region tend to

be accurate.

Robust and stable grid

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

• To enable access to low cost

financing, multilateral

funding channelled through

agencies like Indian

Renewable Energy

Development Agency

(IREDA) could be

considered. Funds that are

part of climate change

negotiations could be

deployed to lower debt cost.

Also long term tenors will

lead to better cash flows.

Greater quantum of

capital and low-

cost financing

would support

accelerated RE

deployment, reduce

end-consumer

tariffs, and thus

achieve economies

of scale.

Low cost financing

• Establish standardized

PPAs to rationalize costs

and minimize risks for

producers and buyers

Will minimize risks

for producers,

buyers and lenders

Standardized Power Purchase

Agreements (PPA) across

states and utilities

• Speedy implementation of

goods and service tax to

resolve the cascading tax

structure and consolidate

the different layers of

taxation.

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Manufacturing Will establish a

simplified and

streamlined tax

regime in country;

attract investments

from global players;

Generate more

revenues; establish

the single market

concept, reduce tax

related transaction

costs for the

industry

Passage and implementation of

Goods and Service Tax

3. Manufacturing

• Revamp archaic labour

reforms to bring them at par

with global market

dynamics.

• Rationalize and combine the

existing 44 Central Acts and

State Level Labour Laws;

formulate separate labour

laws for MSME and services

Will support in

reviving the

manufacturing

sector and creating

Reforms pertaining to labour,

regulatory clearances, tax

administrative services and

legal processes

Manufacturing

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

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Sector/Issues Agenda Going Forward CII Recommendations Likely Impact Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

sector; amend laws

pertaining to Contract

Labour Act 1970, Trade

Union Act, etc.

• Streamline process of filing

and servicing court

proceedings

• Create platforms for

efficient, effective and time

bound taxation related

dispute resolution forum.

• Earmark amount from the

Exploration Fund for

different minerals especially

scarce/deficient minerals.

• Private exploration

companies should be

invited for competitive

bidding for exploration of

these minerals and they

should be paid out of this

Fund.

• The expenditure incurred in

the process may be

recovered from successful

bidders in the auction.

Mining Will lead to an

increase in

investment in

mines and mineral

sector.

Encourage greater

involvement of

private sector

providing a fillip to

exploration

activities in the

country.

Exploration to be addressed

adequately in the Mines and

Minerals Development

Regulatory Act

Early announcement of

National Steel Policy with a

focus on:

• Raw material security for

indigenous ore and coal.

• Creating a reasonable

tariff regime

• Skill development through

creation of a national skill

council for steel sector

• Special purpose long term

financing facility may be

created to finance large

investments in new steel

plants.

Steel The policy will

bring clarity in

procedures and put

forth a vision for

the Indian Steel

sector.

Passage and implementation of

Draft National Steel Policy

Develop a National Policy on

Capital Goods with a focus

on

Will set up broad

vision for the

sector, reflecting

India's growing

National Capital Goods Policy

• Creating a globally

competitive capital goods

sector and support in

market expansion

• Promoting exports;

• Developing human

resources;

• Enhancing competitiveness

through technology up-

gradation and focus on R&D

and innovation;

• Setting up institutional

mechanisms to determine

the appropriate standards.

requirements of

capital goods &

engineering and

India's strength

and potential to

emerge as supplier

of the capital goods

to the world.

Modification in payment

terms, introduction of price

variation clause, favorable

clauses for capital goods on

confidentiality, arbitration,

termination etc.

Strengthen the

procurement

process; attract

global suppliers of

capital goods and

encourage

competitive

Review of General/Special

Contract Clauses of PSU's

Early announcement of

National Chemicals Policy

with a special focus on

• Evolution of Consumption

Standards,

• Availability of Feedstock,

• Skill Development,

• Perception Management

and Innovation

Chemicals Support growth of

specialty chemicals

sector; Address the

talent deficit for the

sector; support in

creating quality

standards for the

sector

Passage and implementation of

the National Chemical Policy

Capital Goods

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Capital Goods

24 25

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

sector; amend laws

pertaining to Contract

Labour Act 1970, Trade

Union Act, etc.

• Streamline process of filing

and servicing court

proceedings

• Create platforms for

efficient, effective and time

bound taxation related

dispute resolution forum.

• Earmark amount from the

Exploration Fund for

different minerals especially

scarce/deficient minerals.

• Private exploration

companies should be

invited for competitive

bidding for exploration of

these minerals and they

should be paid out of this

Fund.

• The expenditure incurred in

the process may be

recovered from successful

bidders in the auction.

Mining Will lead to an

increase in

investment in

mines and mineral

sector.

Encourage greater

involvement of

private sector

providing a fillip to

exploration

activities in the

country.

Exploration to be addressed

adequately in the Mines and

Minerals Development

Regulatory Act

Early announcement of

National Steel Policy with a

focus on:

• Raw material security for

indigenous ore and coal.

• Creating a reasonable

tariff regime

• Skill development through

creation of a national skill

council for steel sector

• Special purpose long term

financing facility may be

created to finance large

investments in new steel

plants.

Steel The policy will

bring clarity in

procedures and put

forth a vision for

the Indian Steel

sector.

Passage and implementation of

Draft National Steel Policy

Develop a National Policy on

Capital Goods with a focus

on

Will set up broad

vision for the

sector, reflecting

India's growing

National Capital Goods Policy

• Creating a globally

competitive capital goods

sector and support in

market expansion

• Promoting exports;

• Developing human

resources;

• Enhancing competitiveness

through technology up-

gradation and focus on R&D

and innovation;

• Setting up institutional

mechanisms to determine

the appropriate standards.

requirements of

capital goods &

engineering and

India's strength

and potential to

emerge as supplier

of the capital goods

to the world.

Modification in payment

terms, introduction of price

variation clause, favorable

clauses for capital goods on

confidentiality, arbitration,

termination etc.

Strengthen the

procurement

process; attract

global suppliers of

capital goods and

encourage

competitive

Review of General/Special

Contract Clauses of PSU's

Early announcement of

National Chemicals Policy

with a special focus on

• Evolution of Consumption

Standards,

• Availability of Feedstock,

• Skill Development,

• Perception Management

and Innovation

Chemicals Support growth of

specialty chemicals

sector; Address the

talent deficit for the

sector; support in

creating quality

standards for the

sector

Passage and implementation of

the National Chemical Policy

Capital Goods

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

Capital Goods

26 27

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Speedy announcement of the

policy with a focus on:

• Sub-segments such as jute

and silk; man-made fiber

based textiles.

• Excise neutrality for the

sector - introducing GST to

create a uniform tax slab on

the entire value chain

• Providing special incentives

for processing, finishing and

apparel manufacturing.

• Promoting technical textiles;

creating input -output

norms; labeling norms;

eliminating fiscal anomalies

across fibers, etc.

• Promoting investments and

infrastructure development

by creating industrial

clusters; enhancement of

TUFs scheme

• Establishing industry -

academia collaborations for

Skill development; R&D, etc.

Textiles • Increase in

investment;

boost to clusters

• Integration of

value chain

Announcement of National

Textile Policy

Electronics • Will help

industry

overcome the

challenge of

manufacturing in

the ITA-1/zero

duty regime;

making industry

more competitive

and investment

friendly; to

support in

meeting the

target set in NPE

2012 of US$ 400

billion in market

size by 2020.

Implementation of policy

provision of DTA sales of ITA-

1/zero duty regime

• Implement the policy

provision of DTA sales of

ITA-1/zero duty (ICTE

products) being given the

same benefits as for

physical exports(Para 2.1(b)

of National Policy on

Electronics( 2012)

• Extending this status to all

suppliers to domestic

manufacturers of zero duty

ICTE products would also

eliminate the inverted duty

structure at Tier-2 industries

which is considered

important

• SAD of 4% and 2% CST to be

abolished on Electronics

industry

Abolition of Special Additional

Duty (SAD) and Central Sales

Tax (CST)

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

As per CII calculations,

provisions of the new land

acquisition act would increase

the cost of land acquisition by

about 3 - 3.5 times.

Therefore, Compensation

package, including R&R

entitlements, needs to be

reviewed so as to match the

interest of all stakeholders

with industry affordability.

• As sellers would have

received the premium on

land value, the R&R

provision should not be

made applicable to land

owners in cases of direct

purchase from them.

However, suitable R&R

entitlements could be laid

down for affected families

who lose their livelihood as

a result of such land

acquisition.

• For Schedule V areas, since

consent of affected land

owners is already being

sought, additional consent

from Gram Sabha shouldbe

dropped as otherwise a vast

geographic area in the

country would be left under

or undeveloped

• Ex-ante zoning of land

should be undertaken so as

to have a clear mapping,

identification and

segregation of the land for

various purposes, over a 100

- 150 year horizon.

Updating, digitization and

zoning of land records will

be key for achieving success

in the process of systematic

development of industrial

land.

New Land Acquisition

ordinance

Right to Fair

Compensation and

Transparency in Land

Acquisition,

Rehabilitation and

Resettlement

(Amendment)

Ordinance, 2014 was

promulgated on

December 31, 2014 to

amend the Right to

Fair Compensation and

Transparency in Land

Acquisition,

Rehabilitation and

Resettlement Act, 2013

(LARR Act 2013).

Provide a strong

impetus to

industrial growth

and infrastructure

creation in the

country

Passage of New Land

Acquisition ordinance

The Land Acquisition Ordinance

has been re-promulgated. The

new ordinance, has been

passed with nine amendments

by the Lok Sabha.

4. Land Acquisition

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

26 27

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Speedy announcement of the

policy with a focus on:

• Sub-segments such as jute

and silk; man-made fiber

based textiles.

• Excise neutrality for the

sector - introducing GST to

create a uniform tax slab on

the entire value chain

• Providing special incentives

for processing, finishing and

apparel manufacturing.

• Promoting technical textiles;

creating input -output

norms; labeling norms;

eliminating fiscal anomalies

across fibers, etc.

• Promoting investments and

infrastructure development

by creating industrial

clusters; enhancement of

TUFs scheme

• Establishing industry -

academia collaborations for

Skill development; R&D, etc.

Textiles • Increase in

investment;

boost to clusters

• Integration of

value chain

Announcement of National

Textile Policy

Electronics • Will help

industry

overcome the

challenge of

manufacturing in

the ITA-1/zero

duty regime;

making industry

more competitive

and investment

friendly; to

support in

meeting the

target set in NPE

2012 of US$ 400

billion in market

size by 2020.

Implementation of policy

provision of DTA sales of ITA-

1/zero duty regime

• Implement the policy

provision of DTA sales of

ITA-1/zero duty (ICTE

products) being given the

same benefits as for

physical exports(Para 2.1(b)

of National Policy on

Electronics( 2012)

• Extending this status to all

suppliers to domestic

manufacturers of zero duty

ICTE products would also

eliminate the inverted duty

structure at Tier-2 industries

which is considered

important

• SAD of 4% and 2% CST to be

abolished on Electronics

industry

Abolition of Special Additional

Duty (SAD) and Central Sales

Tax (CST)

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

As per CII calculations,

provisions of the new land

acquisition act would increase

the cost of land acquisition by

about 3 - 3.5 times.

Therefore, Compensation

package, including R&R

entitlements, needs to be

reviewed so as to match the

interest of all stakeholders

with industry affordability.

• As sellers would have

received the premium on

land value, the R&R

provision should not be

made applicable to land

owners in cases of direct

purchase from them.

However, suitable R&R

entitlements could be laid

down for affected families

who lose their livelihood as

a result of such land

acquisition.

• For Schedule V areas, since

consent of affected land

owners is already being

sought, additional consent

from Gram Sabha shouldbe

dropped as otherwise a vast

geographic area in the

country would be left under

or undeveloped

• Ex-ante zoning of land

should be undertaken so as

to have a clear mapping,

identification and

segregation of the land for

various purposes, over a 100

- 150 year horizon.

Updating, digitization and

zoning of land records will

be key for achieving success

in the process of systematic

development of industrial

land.

New Land Acquisition

ordinance

Right to Fair

Compensation and

Transparency in Land

Acquisition,

Rehabilitation and

Resettlement

(Amendment)

Ordinance, 2014 was

promulgated on

December 31, 2014 to

amend the Right to

Fair Compensation and

Transparency in Land

Acquisition,

Rehabilitation and

Resettlement Act, 2013

(LARR Act 2013).

Provide a strong

impetus to

industrial growth

and infrastructure

creation in the

country

Passage of New Land

Acquisition ordinance

The Land Acquisition Ordinance

has been re-promulgated. The

new ordinance, has been

passed with nine amendments

by the Lok Sabha.

4. Land Acquisition

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

28 29

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

• This needs to be supplemented by setting up dedicated Institutions like State Land Bank Corporations (SLBCs) for acquiring fallow, barren and unproductive as well as other lands, ex-ante, for Industrial purposes, as a transparent and viable solution to the problem. The job of these State Land Bank Corporations would be to scientifically acquire large tracts of non-cultivable and other lands, develop them as Land Banks for the future and have a transparent mechanism to pass them on to the private sector.

There has been a substantial increase in the number of PPP projects coming up for renegotiation. However, there is no institutional mechanism to reset terms in transparent and unbiased manner. PPPs should have arrangements for re-negotiation under an empowered Institutional Mechanism with authority and jurisdiction to renegotiate terms of contract in best interests of country.

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Pubic Private

Partnerships (PPP)

This would help

improve the

economic viability

of the long term

infrastructure

contracts

PPP Renegotiation

5. Infrastructure

As announced by the Hon'ble Union Minister for Finance in his Budget speech, contemporary PPP contracts should be balanced to meet the requirements of the private and public sector stakeholders and suitable liquidated damages against sovereign promises should be stipulated.

Balanced Risk sharing

Allowing sponsors to exit fully from the existing infrastructure projects.

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Exit Procedures Releasing their

equity would help

them to reinvest in

new infrastructure

projects

Simplifying Exit Procedures

DRB's- decision/recommendation should be made contractually binding and the parties should not challenge such a decision. If all members of a DRB have given unanimous recommendation on a matter then the parties should comply with it and should not be allowed to refer the same to Independent Expert Group (IEG) or arbitration

Dispute Resolution Strengthen Dispute Resolution

Mechanism.

The treatment of the infrastructure sector with respect to non-performing assets (NPAs) should be different from that accorded to the manufacturing sector

RBI's definition of

infrastructure sector NPAs-

• Enhance the cut-off limit to

500 instead of 100

• For retrenchment and

closure in establishments

with 500 or more workers,

no prior permission may

need to be taken and

"automatic permission" may

be granted on the basis of

higher severance benefits'

which may include:

• increased provision of

certain additional days of

average pay (e.g. 30 days)

for every completed year of

service as retrenchment

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Labour Reforms • Will promote

labour intensive

manufacturing

and encourage

more foreign

companies to set

up their

manufacturing

base in India

Industrial Disputes Act, 1947

Prior Approval for

Retrenchment/lay-off/closure

(Section 25 K, M, N, O)

As per the current provision, at the time of retrenchment or closure, the worker has to be paid retrenchment compensation which shall be equivalent to 15 days' average pay for every completed year of service or any part thereof in excess of 6 months.

6. Labour laws

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

This would help

revive confidence

amongst investors.

Substantial fund

are locked in claims

which has severely

constrained the

financial ability of

developers. This

move, if

implemented

would help in

easing liquidity.

This would help in

better positioning

of infrastructure

assets

28 29

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

• This needs to be supplemented by setting up dedicated Institutions like State Land Bank Corporations (SLBCs) for acquiring fallow, barren and unproductive as well as other lands, ex-ante, for Industrial purposes, as a transparent and viable solution to the problem. The job of these State Land Bank Corporations would be to scientifically acquire large tracts of non-cultivable and other lands, develop them as Land Banks for the future and have a transparent mechanism to pass them on to the private sector.

There has been a substantial increase in the number of PPP projects coming up for renegotiation. However, there is no institutional mechanism to reset terms in transparent and unbiased manner. PPPs should have arrangements for re-negotiation under an empowered Institutional Mechanism with authority and jurisdiction to renegotiate terms of contract in best interests of country.

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Pubic Private

Partnerships (PPP)

This would help

improve the

economic viability

of the long term

infrastructure

contracts

PPP Renegotiation

5. Infrastructure

As announced by the Hon'ble Union Minister for Finance in his Budget speech, contemporary PPP contracts should be balanced to meet the requirements of the private and public sector stakeholders and suitable liquidated damages against sovereign promises should be stipulated.

Balanced Risk sharing

Allowing sponsors to exit fully from the existing infrastructure projects.

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Exit Procedures Releasing their

equity would help

them to reinvest in

new infrastructure

projects

Simplifying Exit Procedures

DRB's- decision/recommendation should be made contractually binding and the parties should not challenge such a decision. If all members of a DRB have given unanimous recommendation on a matter then the parties should comply with it and should not be allowed to refer the same to Independent Expert Group (IEG) or arbitration

Dispute Resolution Strengthen Dispute Resolution

Mechanism.

The treatment of the infrastructure sector with respect to non-performing assets (NPAs) should be different from that accorded to the manufacturing sector

RBI's definition of

infrastructure sector NPAs-

• Enhance the cut-off limit to

500 instead of 100

• For retrenchment and

closure in establishments

with 500 or more workers,

no prior permission may

need to be taken and

"automatic permission" may

be granted on the basis of

higher severance benefits'

which may include:

• increased provision of

certain additional days of

average pay (e.g. 30 days)

for every completed year of

service as retrenchment

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Labour Reforms • Will promote

labour intensive

manufacturing

and encourage

more foreign

companies to set

up their

manufacturing

base in India

Industrial Disputes Act, 1947

Prior Approval for

Retrenchment/lay-off/closure

(Section 25 K, M, N, O)

As per the current provision, at the time of retrenchment or closure, the worker has to be paid retrenchment compensation which shall be equivalent to 15 days' average pay for every completed year of service or any part thereof in excess of 6 months.

6. Labour laws

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

This would help

revive confidence

amongst investors.

Substantial fund

are locked in claims

which has severely

constrained the

financial ability of

developers. This

move, if

implemented

would help in

easing liquidity.

This would help in

better positioning

of infrastructure

assets

30 31

compensation over and

above the current provision

of retrenchment

compensation of 15 days'

average pay for every

completed year of service or

any part thereof in excess of

6 months. (This can be

applicable to workmen upto

the age of 50 years as after

that age the compensation

is normally linked to the

number of years left for

retirement rather than the

number of years worked).

• Creation of a "Consolidated

Fund" by way of "additional"

contribution of certain days

(e.g. 15 days) of average

pay per year of completed

service for enabling "re-

skilling and "redeployment"

of the retrenched worker

or

Reimbursement of additional

15 days of average pay per

year of completed service

against money spent by the

worker on training and skill

upgradation.

The broad contours of the

above severance benefits

could be worked out through

consultation.

• In case of retrenchment,

especially in cases where

not more than 10% of the

workforce is affected the

provision of "prior

permission" may be

replaced by "prior

intimation" to provide the

much needed flexibility in

the matter of manpower

planning.

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

• The Act should be renamed

as "The Contract Labour

Regulation Act".

• As a consequence, the Sec

10 of the Act giving powers

to the appropriate

Government to issue

notification prohibiting

engagement of Contract

Labour in any process,

operation or other work may

be deleted.

Labour Reforms Facilitate more job

creation and

flexibility in

engaging labour

Amend Contract Labour

(Regulation & Abolition) Act,

1970

The term 'Contractor' as

defined in Sec 2(1)( c ) of the

Act may be slightly amended

to exclude "Legal Entity"

• Contractors under the

Contract Labour Act are

currently large companies

which are rendering

specialized services. These

companies are employers

with PAN No., Employer

Code under ESI, Employer

Code under Provident Fund

etc. These companies may

be considered as employers

and any query relating to

social security payments

may be directed towards

these employers rather than

multiple sites where these

companies render service.

• Currently, the regulatory

authorities ask for records

from the sites where the

contract employees work

calling them as Principle

Employers. Therefore, there

is an urgent need to define

the responsibility of

Principle Contractor for

large companies like that of

Principle Employer

Labour Reforms Ensure that

contract workers

are paid the same

wages and social

security benefits for

the same work on

par with regular

workers

Amend Contract Labour

(Regulation & Abolition) Act,

1970

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

30 31

compensation over and

above the current provision

of retrenchment

compensation of 15 days'

average pay for every

completed year of service or

any part thereof in excess of

6 months. (This can be

applicable to workmen upto

the age of 50 years as after

that age the compensation

is normally linked to the

number of years left for

retirement rather than the

number of years worked).

• Creation of a "Consolidated

Fund" by way of "additional"

contribution of certain days

(e.g. 15 days) of average

pay per year of completed

service for enabling "re-

skilling and "redeployment"

of the retrenched worker

or

Reimbursement of additional

15 days of average pay per

year of completed service

against money spent by the

worker on training and skill

upgradation.

The broad contours of the

above severance benefits

could be worked out through

consultation.

• In case of retrenchment,

especially in cases where

not more than 10% of the

workforce is affected the

provision of "prior

permission" may be

replaced by "prior

intimation" to provide the

much needed flexibility in

the matter of manpower

planning.

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

• The Act should be renamed

as "The Contract Labour

Regulation Act".

• As a consequence, the Sec

10 of the Act giving powers

to the appropriate

Government to issue

notification prohibiting

engagement of Contract

Labour in any process,

operation or other work may

be deleted.

Labour Reforms Facilitate more job

creation and

flexibility in

engaging labour

Amend Contract Labour

(Regulation & Abolition) Act,

1970

The term 'Contractor' as

defined in Sec 2(1)( c ) of the

Act may be slightly amended

to exclude "Legal Entity"

• Contractors under the

Contract Labour Act are

currently large companies

which are rendering

specialized services. These

companies are employers

with PAN No., Employer

Code under ESI, Employer

Code under Provident Fund

etc. These companies may

be considered as employers

and any query relating to

social security payments

may be directed towards

these employers rather than

multiple sites where these

companies render service.

• Currently, the regulatory

authorities ask for records

from the sites where the

contract employees work

calling them as Principle

Employers. Therefore, there

is an urgent need to define

the responsibility of

Principle Contractor for

large companies like that of

Principle Employer

Labour Reforms Ensure that

contract workers

are paid the same

wages and social

security benefits for

the same work on

par with regular

workers

Amend Contract Labour

(Regulation & Abolition) Act,

1970

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

32 33

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Women Workers may be

allowed to work at night shift

as long as conditions related

to health and safety is taken

care off.

Labour Reforms Flexibility in

deployment of

Labour and

encouraging more

participation of

women workforce

Factories Act 1948

(Factories Amendment Bill

tabled in Parliament and has

been referred to Parliament

Standing Committee)

The total number of working hours in any day including overtime shall not exceed 10 as per Sec 64(4)(i). The same shall be made as 12 instead of 10.

The spread over, inclusive of intervals for rest, shall not exceed 12 hours in any one day as per Sec 64(4)(ii). This can be revised as 13 hours

The total number of hours of work in a week, including overtime, as per sec 64(4)(iii), shall not exceed 60. This can be revised to 72.

Sec 64(4)(iv) putting a quarterly restriction on overtime may be deleted.

Sec 64(5) giving validity for a period of 5 years for the rules made under Sec 64 should be deleted.

The total number of hours of work in any week, including overtime, shall not exceed 60 as per Sec 65(3)(iii). This can be revised as 72.

The portion of Sec 65(3)(iv) which restricts hours of overtime work in a quarter to 75 shall be deleted

Labour Reforms Flexibility in

deployment of

manpower

Factories Act 1948

(Factories Amendment Bill

tabled in Parliament and has

been referred to Parliament

Standing Committee)

Labour Reforms Will help in creating harmonious industrial climate

Trade Unions Act, 1926 All office bearers of registered trade union shall be persons actually engaged or employed in the establishment or industry with which the trade union is connected.

There is no direct loss of interest for Trade Unions because their right to form alliance or affiliation with external bodies remains as it is.

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

1. Infrastructure

• Scheme to encourage

Industry to offer its

infrastructure &

equipment

• Incentivize Industry to set

up Skill Labs in Schools

and Skill Hubs

• Skill providers be provided

Govt land/building on

lease

2. CSR:

• Industry's Contribution to

Sector Skill Councils to be

considered as CSR.

• Contribution to Clusters'

CFC by Industry to be

considered as CSR

3. Develop high quality

Trainers and help trainers

become entrepreneurs

4. Funding of Training: The

need for single funding

source/nodal body- such

as Sector Skill Council

(SSC)/NSDC instead of

multiple agencies.

5. Skill Development

fellowships

6. Sector Skill Councils:

• Legal recognition for

national acceptance

• All industry members

through nodal Ministries

be mandated to have at

least 20% of staff SSC

certified.

• Tri party agreements

between Industry-

Vocational training

Provider (VTP)-SSC.

7. Build sustained

awareness program for

Skills Development

Skill Development The revised

National Policy on

Skill Development

& Entrepreneurship

with the aim of

converging skill

development

programmes,

would be in sync

with the

Government's

vision for 'Make in

India' and 'Skill

India'- to create a

large talent pool in

India, reaping the

benefits of the

demographic

dividend.

National Policy on Skills &

Entrepreneurship, 2015

The National Policy on Skill

Development 2009 is proposed

to be revised and updated

keeping in mind the skill

requirements by the

Industry/employers and also

developing the eco-system for

entrepreneurs.

7. Skill Development

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

32 33

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Women Workers may be

allowed to work at night shift

as long as conditions related

to health and safety is taken

care off.

Labour Reforms Flexibility in

deployment of

Labour and

encouraging more

participation of

women workforce

Factories Act 1948

(Factories Amendment Bill

tabled in Parliament and has

been referred to Parliament

Standing Committee)

The total number of working hours in any day including overtime shall not exceed 10 as per Sec 64(4)(i). The same shall be made as 12 instead of 10.

The spread over, inclusive of intervals for rest, shall not exceed 12 hours in any one day as per Sec 64(4)(ii). This can be revised as 13 hours

The total number of hours of work in a week, including overtime, as per sec 64(4)(iii), shall not exceed 60. This can be revised to 72.

Sec 64(4)(iv) putting a quarterly restriction on overtime may be deleted.

Sec 64(5) giving validity for a period of 5 years for the rules made under Sec 64 should be deleted.

The total number of hours of work in any week, including overtime, shall not exceed 60 as per Sec 65(3)(iii). This can be revised as 72.

The portion of Sec 65(3)(iv) which restricts hours of overtime work in a quarter to 75 shall be deleted

Labour Reforms Flexibility in

deployment of

manpower

Factories Act 1948

(Factories Amendment Bill

tabled in Parliament and has

been referred to Parliament

Standing Committee)

Labour Reforms Will help in creating harmonious industrial climate

Trade Unions Act, 1926 All office bearers of registered trade union shall be persons actually engaged or employed in the establishment or industry with which the trade union is connected.

There is no direct loss of interest for Trade Unions because their right to form alliance or affiliation with external bodies remains as it is.

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

1. Infrastructure

• Scheme to encourage

Industry to offer its

infrastructure &

equipment

• Incentivize Industry to set

up Skill Labs in Schools

and Skill Hubs

• Skill providers be provided

Govt land/building on

lease

2. CSR:

• Industry's Contribution to

Sector Skill Councils to be

considered as CSR.

• Contribution to Clusters'

CFC by Industry to be

considered as CSR

3. Develop high quality

Trainers and help trainers

become entrepreneurs

4. Funding of Training: The

need for single funding

source/nodal body- such

as Sector Skill Council

(SSC)/NSDC instead of

multiple agencies.

5. Skill Development

fellowships

6. Sector Skill Councils:

• Legal recognition for

national acceptance

• All industry members

through nodal Ministries

be mandated to have at

least 20% of staff SSC

certified.

• Tri party agreements

between Industry-

Vocational training

Provider (VTP)-SSC.

7. Build sustained

awareness program for

Skills Development

Skill Development The revised

National Policy on

Skill Development

& Entrepreneurship

with the aim of

converging skill

development

programmes,

would be in sync

with the

Government's

vision for 'Make in

India' and 'Skill

India'- to create a

large talent pool in

India, reaping the

benefits of the

demographic

dividend.

National Policy on Skills &

Entrepreneurship, 2015

The National Policy on Skill

Development 2009 is proposed

to be revised and updated

keeping in mind the skill

requirements by the

Industry/employers and also

developing the eco-system for

entrepreneurs.

7. Skill Development

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

34 35

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

8. Build New business

models for scalability and

reach

9. Placements: Creating

robust exchanges and

Minimum qualifications

and standard.

10. Tax breaks and Incentives

• R & D expenses for skill

building be given tax

exemptions.

• Currently only services

provided by NSDC/SSC OR

training

partners/assessment

agencies approved by

SSC/NSDC are exempted

from Service tax. This

scope needs to be

enlarged to cover all

training & assessment

services.

• Institutions providing skill

development training for

projects funded by state or

central government should

be deemed as contractors

and taxed at 2%.

• Section 35CCD allow tax

rebate on expenses of

apprenticeship.

• Section 80 JJAA of Income

Tax Act should be made

applicable to service

providers.

11. Incentivization for MSME:

Apprenticeship Training

opportunities

Scaling up of

Apprentices from

the current 2.9 lacs

to at least four

times the number.

Apprentices (Amendment) Act

2014

Final Guidelines to the

Apprentices (Amendment) Act

2014

Ministry of Labour and

Employment to provide the

Industry with Implementation

Guidelines.

CII had made

recommendations to the

Apprentices (Amendment)

Act 2014

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

• The process of approvals of

National Occupational

Standards (NOS)

acceptance as national

standards be expedited by

National Skill Qualification

Committee (NSQC).

• The National Skill

Qualification Committee

(NSQC) include

representation from the

National Industry

Associations such as CII

etc.

• The CEO of the Sector Skill

Councils be a part of the

Committee.

• Special focus on the Pan

India promotion & advocacy

of NOS and Qualification

Packs.

• The skill trainees be attain

financial assistance

according to their NSQF

levels. First-time

entrepreneurs may get

benefit by way of start-up

loans.

• Recruitment departments

(Public /Private) align their

hiring procedures to NSQF

levels.

Need for a unified

framework to

ensure horizontal

and vertical

mobility between

the vocational

training and

academic space to

ensure career

progression and

recognition for the

vocationally

trained.

National Skill Qualification

Framework (NSQF)

1. Industry participation in ITI

functioning.

2. Utilization of Industry and

Govt.

infrastructure/equipment.

3. Facilitation and utilisation of

Industry workforce/ex-

employees as trainers and

assessors.

4. Exposure of students to

Industry relevant

equipment and use of

advanced technology

5. Training of Trainer programs

for ITI trainers.

Raising the

standards of

technical skills will

correct the skill

gap, create a large

talent pool in India

and improving

competitiveness &

productivity.

Capacity Building in over

11,000 ITI/Private institutes

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

34 35

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

8. Build New business

models for scalability and

reach

9. Placements: Creating

robust exchanges and

Minimum qualifications

and standard.

10. Tax breaks and Incentives

• R & D expenses for skill

building be given tax

exemptions.

• Currently only services

provided by NSDC/SSC OR

training

partners/assessment

agencies approved by

SSC/NSDC are exempted

from Service tax. This

scope needs to be

enlarged to cover all

training & assessment

services.

• Institutions providing skill

development training for

projects funded by state or

central government should

be deemed as contractors

and taxed at 2%.

• Section 35CCD allow tax

rebate on expenses of

apprenticeship.

• Section 80 JJAA of Income

Tax Act should be made

applicable to service

providers.

11. Incentivization for MSME:

Apprenticeship Training

opportunities

Scaling up of

Apprentices from

the current 2.9 lacs

to at least four

times the number.

Apprentices (Amendment) Act

2014

Final Guidelines to the

Apprentices (Amendment) Act

2014

Ministry of Labour and

Employment to provide the

Industry with Implementation

Guidelines.

CII had made

recommendations to the

Apprentices (Amendment)

Act 2014

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

• The process of approvals of

National Occupational

Standards (NOS)

acceptance as national

standards be expedited by

National Skill Qualification

Committee (NSQC).

• The National Skill

Qualification Committee

(NSQC) include

representation from the

National Industry

Associations such as CII

etc.

• The CEO of the Sector Skill

Councils be a part of the

Committee.

• Special focus on the Pan

India promotion & advocacy

of NOS and Qualification

Packs.

• The skill trainees be attain

financial assistance

according to their NSQF

levels. First-time

entrepreneurs may get

benefit by way of start-up

loans.

• Recruitment departments

(Public /Private) align their

hiring procedures to NSQF

levels.

Need for a unified

framework to

ensure horizontal

and vertical

mobility between

the vocational

training and

academic space to

ensure career

progression and

recognition for the

vocationally

trained.

National Skill Qualification

Framework (NSQF)

1. Industry participation in ITI

functioning.

2. Utilization of Industry and

Govt.

infrastructure/equipment.

3. Facilitation and utilisation of

Industry workforce/ex-

employees as trainers and

assessors.

4. Exposure of students to

Industry relevant

equipment and use of

advanced technology

5. Training of Trainer programs

for ITI trainers.

Raising the

standards of

technical skills will

correct the skill

gap, create a large

talent pool in India

and improving

competitiveness &

productivity.

Capacity Building in over

11,000 ITI/Private institutes

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

36 37

Sector/Issues Reforms Going Forward CII Recommendations Likely Impact

6. Introduction of Entrepreneurship Development Programs (EDP) developed by Industry.

7. Employability Training. i.e. Soft Skill training.

8. Development of 2500 new training institutes: (Multi Skill Institutes)

Acceding to CII submissions, many of the issues with respect to related party transactions; confidentiality in business; loans; fraud etc have been settled with passage of the Companies (Amendment) Bill, 2015 which was passed by Rajya Sabha recently. Notification of these provisions will simplify the framework and ease compliance. Other issues that have been recommended to MCA for resolution include provisions relating to onerous requirements for private companies and closely-held unlisted public companies and Section 8 and Government companies; equity in voting by shareholders for related party transactions; clarifications with respect to CSR; exclusion of certain amounts treated as deposits; decriminalisation of offences; certification of internal financial controls instead of internal control over financial reporting; consolidation of accounts per global accounting standards; streamlining the ambit of cost accounting and audit;

alignment with SEBI

regulations, etc amongst

others.

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Companies Act, 2013 Easier

implementation of

law to ensure that

the regulatory

framework boosts

business instead of

acting as an

impediment.

There is an urgent need to

streamline some of the vital

provisions of the Act

8. Companies Act, 2013

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Processes for Alternate

Dispute resolution

mechanism, Arbitration and

conciliation should be

introduced.

Need for high degree of

accountability of Boards

towards the government as

well the taxpayers

Tax should be administered in

a manner that minimises

uncertainty and cost and

maximises convenience for

taxpayers

Need for extensive

consultation between the tax

administration authority and

industry

Create a common forum for

resolution of disputes to

ensure consistency in the

applicability of relevant laws

Tax administration These measures

would result in

restoring the

confidence of

taxpayers in the tax

administration

system, thereby

bringing down tax

litigation and

encouraging better

tax compliance.

The Tax administration system

should be fair, transparent, with

minimum discretion and no

harassment to the taxpayers.

9. Taxation

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

• The Government must draw

up a road map for a

structural shift from a bank-

dominated financial system

to a more diverse financial

system to reduce burden on

the banking sector.

Strengthen the

financial sector

• Moving from a Bank-

dominated financial system to

a more diverse financial

system.

10. Financial Sector

• The government and the

RBI should consider the

creation of a National Asset

Management Company

(NAMCO), with banks as its

major and initial

shareholders with an equity

base of around Rs 6,000

• Preventing build-up of NPAs

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

36 37

Sector/Issues Reforms Going Forward CII Recommendations Likely Impact

6. Introduction of Entrepreneurship Development Programs (EDP) developed by Industry.

7. Employability Training. i.e. Soft Skill training.

8. Development of 2500 new training institutes: (Multi Skill Institutes)

Acceding to CII submissions, many of the issues with respect to related party transactions; confidentiality in business; loans; fraud etc have been settled with passage of the Companies (Amendment) Bill, 2015 which was passed by Rajya Sabha recently. Notification of these provisions will simplify the framework and ease compliance. Other issues that have been recommended to MCA for resolution include provisions relating to onerous requirements for private companies and closely-held unlisted public companies and Section 8 and Government companies; equity in voting by shareholders for related party transactions; clarifications with respect to CSR; exclusion of certain amounts treated as deposits; decriminalisation of offences; certification of internal financial controls instead of internal control over financial reporting; consolidation of accounts per global accounting standards; streamlining the ambit of cost accounting and audit;

alignment with SEBI

regulations, etc amongst

others.

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Companies Act, 2013 Easier

implementation of

law to ensure that

the regulatory

framework boosts

business instead of

acting as an

impediment.

There is an urgent need to

streamline some of the vital

provisions of the Act

8. Companies Act, 2013

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

Processes for Alternate

Dispute resolution

mechanism, Arbitration and

conciliation should be

introduced.

Need for high degree of

accountability of Boards

towards the government as

well the taxpayers

Tax should be administered in

a manner that minimises

uncertainty and cost and

maximises convenience for

taxpayers

Need for extensive

consultation between the tax

administration authority and

industry

Create a common forum for

resolution of disputes to

ensure consistency in the

applicability of relevant laws

Tax administration These measures

would result in

restoring the

confidence of

taxpayers in the tax

administration

system, thereby

bringing down tax

litigation and

encouraging better

tax compliance.

The Tax administration system

should be fair, transparent, with

minimum discretion and no

harassment to the taxpayers.

9. Taxation

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

• The Government must draw

up a road map for a

structural shift from a bank-

dominated financial system

to a more diverse financial

system to reduce burden on

the banking sector.

Strengthen the

financial sector

• Moving from a Bank-

dominated financial system to

a more diverse financial

system.

10. Financial Sector

• The government and the

RBI should consider the

creation of a National Asset

Management Company

(NAMCO), with banks as its

major and initial

shareholders with an equity

base of around Rs 6,000

• Preventing build-up of NPAs

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

38 39

crore to take NPAs off the

bank's balance sheet and

also focus on rehabilitation,

recapitalization and

refinancing of banks.

• The goal of NAMCO would

be to resolve the NPA

problem. Its main activities

could include NPA

acquisition, aggregation

and resolution, including

the sale of businesses, or

assets, or management

change.

• It should also be a conduit

to attract fresh capital,

particularly international

capital and expertise into

this sector. NAMCO could

be governed by an

independent board that

includes Indian and

international banking

experts.

• To buy stressed assets, it

should get them

independently valued and

pay by security receipts of

appropriate structure and

maturity and receive a

management fee. Selling

banks should be allowed by

the RBI to write off the

haircut taken in selling

these loans over five years,

softening the hit to banks'

profit and loss accounts.

NAMCO can then aggregate

loans from different seller

banks and develop a

comprehensive resolution

strategy for each situation.

• The financial solution or

capital restructuring may

include extra funding for

completion and working

capital, additional equity,

conversion of debt into

equity, no interest or

concessional interest for a

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

period of time, principal

repayment holiday period

and extension of maturities

to make the project

financially sound. This may

also involve a change of

promoters and

management, if money has

been siphoned off.

• To prevent NPAs from

building up, the RBI should

regularly publish the NPA

numbers, sector wise, so

that banks are aware of the

vulnerable sectors and take

remedial action.

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

• There is a need for the

Government and the

financial sector regulators to

work in a concerted manner

to develop an integrated

bond, currency, derivatives

market at par with the

equity market

To facilitate long-

term funding for

the infrastructure

sector and reduce

the dependence on

the banking sector

for funds.

• Deepening of Capital Markets

through enhanced

participation from domestic

institutional and retail

investors.

• Development of Bonds-

Currency-Derivatives Market.

Capital Markets

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

38 39

crore to take NPAs off the

bank's balance sheet and

also focus on rehabilitation,

recapitalization and

refinancing of banks.

• The goal of NAMCO would

be to resolve the NPA

problem. Its main activities

could include NPA

acquisition, aggregation

and resolution, including

the sale of businesses, or

assets, or management

change.

• It should also be a conduit

to attract fresh capital,

particularly international

capital and expertise into

this sector. NAMCO could

be governed by an

independent board that

includes Indian and

international banking

experts.

• To buy stressed assets, it

should get them

independently valued and

pay by security receipts of

appropriate structure and

maturity and receive a

management fee. Selling

banks should be allowed by

the RBI to write off the

haircut taken in selling

these loans over five years,

softening the hit to banks'

profit and loss accounts.

NAMCO can then aggregate

loans from different seller

banks and develop a

comprehensive resolution

strategy for each situation.

• The financial solution or

capital restructuring may

include extra funding for

completion and working

capital, additional equity,

conversion of debt into

equity, no interest or

concessional interest for a

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

period of time, principal

repayment holiday period

and extension of maturities

to make the project

financially sound. This may

also involve a change of

promoters and

management, if money has

been siphoned off.

• To prevent NPAs from

building up, the RBI should

regularly publish the NPA

numbers, sector wise, so

that banks are aware of the

vulnerable sectors and take

remedial action.

Sector/Issues Agenda Going Forward CII Recommendations Likely Impact

• There is a need for the

Government and the

financial sector regulators to

work in a concerted manner

to develop an integrated

bond, currency, derivatives

market at par with the

equity market

To facilitate long-

term funding for

the infrastructure

sector and reduce

the dependence on

the banking sector

for funds.

• Deepening of Capital Markets

through enhanced

participation from domestic

institutional and retail

investors.

• Development of Bonds-

Currency-Derivatives Market.

Capital Markets

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

40 41

Annexure

Key announcements in Budget 2015-16

Agriculture

Funding the unfunded

From Jan Dhan to Jan Suraksha

Infrastructure

lMore steps to address the two major factors critical to agricultural production soil and water proposed; to improve soil health, Agiculture Ministry's organic farming scheme - 'Paramparagat Krishi Vikas Yojana' to be fully supported; Rs Rs5,300 crore allocated to support micro-irrigation, watershed development and the Pradhan Mantri Krishi Sinchai Yojana. States urged to chip in substantially in this vital sector.

lFocus on improving the quality and effectiveness of activities under MGNREGA. Rs 34,699 crore allocated for this

lTo support the agriculture sector with the help of effective agriculture credit and focus on small and marginal farmers, the Finance Minister proposed to allocate Rs 25,000 crore in 2015-16 to the corpus of Rural Infrastructure Development Fund (RIDF) set up in NABARD; Rs 15,000 crore for Long Term Rural Credit Fund; Rs45,000crore for Short Term Co-operative Rural Credit Refinance Fund; and Rs 15,000 crore for Short Term RRB Refinance Fund.

lNeed to create a National Agriculture Market for the benefit farmers, which will also have the incidental benefit of moderating price rises. Government to work with the States, in NITI, for the creation of a Unified National Agriculture Market.

lTo create a Micro Units Development Refinance Agency (MUDRA) Bank, with a corpus of Rs. 20,000 crore, and credit guarantee corpus of 3,000 crore, which will refinance Micro-Finance Institutions through a Pradhan Mantri Mudra Yojana.

lA Trade Receivables discounting System (TReDS) which will be an electronic platform for facilitating financing of trade receivables of MSMEs to be established.

lIn lending, SC/ST enterprises to get priority.

lPostal network with 1,54,000 points of presence spread across villages to be used for increasing access of the people to the formal financial system.

lGovernment to work towards creating a functional social security system for all Indians, especially the poor and the under-privileged.

lProposes to launch Pradhan Mantri Suraksha Bima Yojna which would cover accidental death risk of Rs 2 lakh for a premium of just Rs12 per year, Atal Pension Yojana, to provide a defined pension. Government to contribute 50% of the beneficiaries' premium limited to Rs 1,000 each year, for five years, in the new accounts opened before 31st December 2015 and a new scheme for providing Physical Aids and Assisted Living Devices for senior citizens, living below the poverty line.

lPradhan Mantri Jeevan Jyoti Bima Yojana to cover both natural and accidental death risk of Rs2 lakh at premium of Rs330 per year for the age group of 18-50.

lUnclaimed deposits of about Rs 3,000 crores in the PPF, and approximately Rs 6,000 crores in the EPF corpus. to be appropriated to a corpus, to be used to subsidize the premiums on these social security schemes through creation of a Senior Citizen Welfare Fund in the Finance Bill.

lSharp increase in outlays of roads and railways. Capital expenditure of public sector units raised.

lNational Investment and Infrastructure Fund (NIIF), to be established with an annual flow of Rs20,000 crores to it.

l

lPPP mode of infrastructure development to be revisited and revitalized.

lAtal Innovation Mission (AIM) to be established in NITI to provide Innovation

lPromotion Platform involving academicians, and drawing upon national and international experiences to foster a culture of innovation, research and development. A sum of Rs150 crore will be earmarked.

l(SETU) Self-Employment and Talent Utilization) to be established as Techno-financial, incubation and facilitation programme to support all aspects of start-up business. Rs1000 crore to be set aside as initial amount in NITI.

lPorts in public sector will be encouraged, to corporatize, and become companies under the Companies Act to attract investment and leverage the huge land resources.

l5 new Ultra Mega Power Projects, each of 4000 MW, in the Plug-and-Play mode.

lPublic Debt Management Agency (PDMA) bringing both external and domestic borrowings under one roof to be set up this year.

lEnabling legislation, amending the Government Securities Act and the RBI Act included in the Finance Bill, 2015.

lForward Markets commission to be merged with SEBI.

lSection-6 of FEMA to be amended through Finance Bill to provide control on capital flows as equity will be exercised by Government in consultation with RBI.

lProposal to create a Task Force to establish sector-neutral financial redressal agency that will address grievance against all financial service providers.

lIndia Financial Code to be introduced soon in Parliament for consideration.

lGovernment to bring enabling legislation to allow employee to opt for EPF or New

lPension Scheme. For employee's below a certain threshold of monthly income, contribution to EPF to be option, without affecting employees' contribution.

lNBFCs registered with RBI and having asset size of Rs. 500 crore and above may be considered for notifications as 'Financial Institution' in terms of the SARFAESI Act, 2002.

lProposes to introduce measures that will incentivize credit or debit card transactions, and disincentivise cash transactions.

lAn autonomous Bank Board Bureau to be set up to improve the governance of public sector bank.

lForeign investments in Alternate Investment Funds to be allowed.

lDistinction between different types of foreign investments, especially between foreign portfolio investments and foreign direct investments to be done away with. Replacement with composite caps.

lA project development company to facilitate setting up manufacturing hubs in CMLV countries, namely, Cambodia, Myanmar, Laos and Vietnam.

lTarget of renewable energy capacity revised to 175000 MW till 2022,

lA need for procurement law to contain malfeasance in public procurement. Malfeasance in public procurement law and an institutional structure consistent with the UNCITRAL model

lProposal to introduce a public Contracts (resolution of disputes) Bill to streamline the institutional arrangements for resolution of such disputes.

lProposal to introduce a regulatory reform Bill that will bring about a cogency of approach across various sectors of infrastructure.

lGold monetisation scheme to allow the depositors of gold to earn interest in their metal accounts and the jewellers to obtain loans in their metal account to be introduced.

lSovereign Gold Bond, as an alternative to purchasing metal gold scheme to be developed.

lCommence work on developing an Indian gold coin, which will carry the Ashok Chakra on its face.

Tax free infrastructure bonds for the projects in the rail, road and irrigation sectors to be permitted.

Financial Market

Investment

Monetising Gold

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

40 41

Annexure

Key announcements in Budget 2015-16

Agriculture

Funding the unfunded

From Jan Dhan to Jan Suraksha

Infrastructure

lMore steps to address the two major factors critical to agricultural production soil and water proposed; to improve soil health, Agiculture Ministry's organic farming scheme - 'Paramparagat Krishi Vikas Yojana' to be fully supported; Rs Rs5,300 crore allocated to support micro-irrigation, watershed development and the Pradhan Mantri Krishi Sinchai Yojana. States urged to chip in substantially in this vital sector.

lFocus on improving the quality and effectiveness of activities under MGNREGA. Rs 34,699 crore allocated for this

lTo support the agriculture sector with the help of effective agriculture credit and focus on small and marginal farmers, the Finance Minister proposed to allocate Rs 25,000 crore in 2015-16 to the corpus of Rural Infrastructure Development Fund (RIDF) set up in NABARD; Rs 15,000 crore for Long Term Rural Credit Fund; Rs45,000crore for Short Term Co-operative Rural Credit Refinance Fund; and Rs 15,000 crore for Short Term RRB Refinance Fund.

lNeed to create a National Agriculture Market for the benefit farmers, which will also have the incidental benefit of moderating price rises. Government to work with the States, in NITI, for the creation of a Unified National Agriculture Market.

lTo create a Micro Units Development Refinance Agency (MUDRA) Bank, with a corpus of Rs. 20,000 crore, and credit guarantee corpus of 3,000 crore, which will refinance Micro-Finance Institutions through a Pradhan Mantri Mudra Yojana.

lA Trade Receivables discounting System (TReDS) which will be an electronic platform for facilitating financing of trade receivables of MSMEs to be established.

lIn lending, SC/ST enterprises to get priority.

lPostal network with 1,54,000 points of presence spread across villages to be used for increasing access of the people to the formal financial system.

lGovernment to work towards creating a functional social security system for all Indians, especially the poor and the under-privileged.

lProposes to launch Pradhan Mantri Suraksha Bima Yojna which would cover accidental death risk of Rs 2 lakh for a premium of just Rs12 per year, Atal Pension Yojana, to provide a defined pension. Government to contribute 50% of the beneficiaries' premium limited to Rs 1,000 each year, for five years, in the new accounts opened before 31st December 2015 and a new scheme for providing Physical Aids and Assisted Living Devices for senior citizens, living below the poverty line.

lPradhan Mantri Jeevan Jyoti Bima Yojana to cover both natural and accidental death risk of Rs2 lakh at premium of Rs330 per year for the age group of 18-50.

lUnclaimed deposits of about Rs 3,000 crores in the PPF, and approximately Rs 6,000 crores in the EPF corpus. to be appropriated to a corpus, to be used to subsidize the premiums on these social security schemes through creation of a Senior Citizen Welfare Fund in the Finance Bill.

lSharp increase in outlays of roads and railways. Capital expenditure of public sector units raised.

lNational Investment and Infrastructure Fund (NIIF), to be established with an annual flow of Rs20,000 crores to it.

l

lPPP mode of infrastructure development to be revisited and revitalized.

lAtal Innovation Mission (AIM) to be established in NITI to provide Innovation

lPromotion Platform involving academicians, and drawing upon national and international experiences to foster a culture of innovation, research and development. A sum of Rs150 crore will be earmarked.

l(SETU) Self-Employment and Talent Utilization) to be established as Techno-financial, incubation and facilitation programme to support all aspects of start-up business. Rs1000 crore to be set aside as initial amount in NITI.

lPorts in public sector will be encouraged, to corporatize, and become companies under the Companies Act to attract investment and leverage the huge land resources.

l5 new Ultra Mega Power Projects, each of 4000 MW, in the Plug-and-Play mode.

lPublic Debt Management Agency (PDMA) bringing both external and domestic borrowings under one roof to be set up this year.

lEnabling legislation, amending the Government Securities Act and the RBI Act included in the Finance Bill, 2015.

lForward Markets commission to be merged with SEBI.

lSection-6 of FEMA to be amended through Finance Bill to provide control on capital flows as equity will be exercised by Government in consultation with RBI.

lProposal to create a Task Force to establish sector-neutral financial redressal agency that will address grievance against all financial service providers.

lIndia Financial Code to be introduced soon in Parliament for consideration.

lGovernment to bring enabling legislation to allow employee to opt for EPF or New

lPension Scheme. For employee's below a certain threshold of monthly income, contribution to EPF to be option, without affecting employees' contribution.

lNBFCs registered with RBI and having asset size of Rs. 500 crore and above may be considered for notifications as 'Financial Institution' in terms of the SARFAESI Act, 2002.

lProposes to introduce measures that will incentivize credit or debit card transactions, and disincentivise cash transactions.

lAn autonomous Bank Board Bureau to be set up to improve the governance of public sector bank.

lForeign investments in Alternate Investment Funds to be allowed.

lDistinction between different types of foreign investments, especially between foreign portfolio investments and foreign direct investments to be done away with. Replacement with composite caps.

lA project development company to facilitate setting up manufacturing hubs in CMLV countries, namely, Cambodia, Myanmar, Laos and Vietnam.

lTarget of renewable energy capacity revised to 175000 MW till 2022,

lA need for procurement law to contain malfeasance in public procurement. Malfeasance in public procurement law and an institutional structure consistent with the UNCITRAL model

lProposal to introduce a public Contracts (resolution of disputes) Bill to streamline the institutional arrangements for resolution of such disputes.

lProposal to introduce a regulatory reform Bill that will bring about a cogency of approach across various sectors of infrastructure.

lGold monetisation scheme to allow the depositors of gold to earn interest in their metal accounts and the jewellers to obtain loans in their metal account to be introduced.

lSovereign Gold Bond, as an alternative to purchasing metal gold scheme to be developed.

lCommence work on developing an Indian gold coin, which will carry the Ashok Chakra on its face.

Tax free infrastructure bonds for the projects in the rail, road and irrigation sectors to be permitted.

Financial Market

Investment

Monetising Gold

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

4342

Ease Of Doing Business

Skill India

Direct Tax

l

prior permission can be replaced by a pre-existing regulatory mechanism. This will facilitate India

becoming an investment destination.

lTo address concerns of IT industries for a more liberal system of raising global capital, incubation facilities

in our Centres of Excellence, funding for seed capital and growth, and ease of Doing Business etc. would

be addressed for creating hundreds of billion dollars in value.

lComprehensive Bankruptcy Code of global standards to be brought in current fiscal.

lA national skill mission to consolidate skill initiatives spread across several ministries to be launched. The

Mission will consolidate skill initiatives spread across several Ministries and allow us to standardize

procedures and outcomes across our 31 Sector Skill Councils.

lDeen Dayal Upadhyay Gramin Kaushal Yojana with a corpus of Rs 1,500 crore to enhance the employability

of rural youth launched.

lA student Financial Aid Authority to administer and monitor the front-end all scholarship as well

Educational Loan Schemes, through the Pradhan Mantri Vidya Lakshmi Karyakram.

lAn IIT to be set up in Karnataka and Indian School of Mines, Dhanbad to be upgraded in to a full-fledged

IIT.

lNew All India Institute of Medical Science (AIIMS) to be set up in J&K, Punjab, Tamil Nadu, Himachal

Pradesh and Assam. Another AIIMS like institutions to be set up in Bihar.

lA post graduate institute of Horticulture Research & Education is to be set up in Amritsar. 3 new National

Institute of Pharmaceuticals Education and Research in Maharashtra, Rajasthan & Chattisgarh and one

institute of Science and Education Research is to be set up in Nagaland & Orissa each.

lThe National Optical Fibre Network Programme (NOFNP) to be further speeded up by allowing willing

states to execute on reimbursement of cost basis.

lTax free infrastructure bonds for the projects in the rail, road and irrigation sectors.

lVision of putting in place a direct tax regime, which is internationally competitive on rates, without

exemptions.

lGovernment to bring enabling legislation to allow employee to opt for EPF or New Pension Scheme. For

employee's below a certain threshold of monthly income, contribution to EPF to be option, without

affecting employees' contribution.

lObjective of stable taxation policy and a non-adversarial tax administration.

lFight against the scourge of black money to be taken forward.

lNo change in rate of personal income tax.

lProposal to reduce corporate tax from 30% to 25% over the next four years, starting from next financial year.

lAbolition of the wealth tax and replacement with additional surcharge of 2% on the super-rich with a

taxable income of over Rs. 1 crore.

lSurcharge @12% as against current rate of 10%.

lRationalisation and removal of various tax exemptions and incentives to reduce tax disputes and improve

administration.

An expert committee to examine the possibility and prepare a draft legislation where the need for multiple

l

lEvasion of tax in relation to foreign assets to have a punishment of rigorous imprisonment upto 10 years, be

non-compoundable, have a penalty rate of 300% and the offender will not be permitted to approach the

Settlement Commission.

lNon-filing of return/filing of return with inadequate disclosures to have a punishment of rigorous

imprisonment upto 7 years.

lUndisclosed income from any foreign assets to be taxable at the maximum marginal rate.

lMandatory filing of return in respect of foreign asset.

lPAN being made mandatory for any purchase or sale exceeding Rupees 1 lakh.

lLeverage of technology by CBDT and CBEC to access information from either's data bases.

lTax "pass through" to be allowed to both category I and category II alternative investment funds.

lRationalisation of capital gains regime for the sponsors exiting at the time of listing of the units of REITs

and InvITs.

lRental income of REITs from their own assets to have pass through facility.

lPermanent Establishment (PE) norm to be modified to encourage fund managers to relocate to India.

lGeneral Anti Avoidance Rule (GAAR) to be deferred by two years.

lGAAR to apply to investments made on or after 01.04.2017, when implemented.

lAdditional investment allowance (@ 15%) and additional depreciation (@35%) to new manufacturing units

set up during the period 01-04-2015 to 31-03-2020 in notified backward areas of Andhra Pradesh and

Telangana.

lRate of Income-tax on royalty and fees for technical services reduced from 25% to 10% to facilitate

technology inflow.

lBenefit of deduction for employment of new regular workmen to all business entities and eligibility

threshold reduced.

lBalance of 50% of additional depreciation @ 20% for new plant and machinery installed and used for less

than six months by a manufacturing unit or a unit engaged in generation and distribution of power is to be

allowed immediately in the next year.

lSimplification of tax procedures.

lMonetary limit for a case to be heard by a single member bench of ITAT increase from Rs.5 lakh to Rs.15

lakh.

lProvision of indirect transfers in the Income-tax Act suitably cleaned up.

lApplicability of indirect transfer provisions to dividends paid by foreign companies to their shareholders to

be addressed through a clarificatory circular.

lDomestic transfer pricing threshold limit increased from Rs. 5 crore to Rs. 20 crore.

lMAT rationalised for FIIs and members of an AOP.

lTax Administration Reform Commission (TARC) recommendations to be appropriately implemented during

the course of the year.

lDonation made to National Fund for Control of Drug Abuse (NFCDA) to be eligible for 100% deduction u/s

80G of Income-tax Act.

lSeized cash can be adjusted towards assessees tax liability.

l100% deduction for contributions, other than by way of CSR contribution, to Swachh Bharat Kosh and Clean

Ganga Fund.

Exemption to individual tax payers to continue to facilitate savings.

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

4342

Ease Of Doing Business

Skill India

Direct Tax

l

prior permission can be replaced by a pre-existing regulatory mechanism. This will facilitate India

becoming an investment destination.

lTo address concerns of IT industries for a more liberal system of raising global capital, incubation facilities

in our Centres of Excellence, funding for seed capital and growth, and ease of Doing Business etc. would

be addressed for creating hundreds of billion dollars in value.

lComprehensive Bankruptcy Code of global standards to be brought in current fiscal.

lA national skill mission to consolidate skill initiatives spread across several ministries to be launched. The

Mission will consolidate skill initiatives spread across several Ministries and allow us to standardize

procedures and outcomes across our 31 Sector Skill Councils.

lDeen Dayal Upadhyay Gramin Kaushal Yojana with a corpus of Rs 1,500 crore to enhance the employability

of rural youth launched.

lA student Financial Aid Authority to administer and monitor the front-end all scholarship as well

Educational Loan Schemes, through the Pradhan Mantri Vidya Lakshmi Karyakram.

lAn IIT to be set up in Karnataka and Indian School of Mines, Dhanbad to be upgraded in to a full-fledged

IIT.

lNew All India Institute of Medical Science (AIIMS) to be set up in J&K, Punjab, Tamil Nadu, Himachal

Pradesh and Assam. Another AIIMS like institutions to be set up in Bihar.

lA post graduate institute of Horticulture Research & Education is to be set up in Amritsar. 3 new National

Institute of Pharmaceuticals Education and Research in Maharashtra, Rajasthan & Chattisgarh and one

institute of Science and Education Research is to be set up in Nagaland & Orissa each.

lThe National Optical Fibre Network Programme (NOFNP) to be further speeded up by allowing willing

states to execute on reimbursement of cost basis.

lTax free infrastructure bonds for the projects in the rail, road and irrigation sectors.

lVision of putting in place a direct tax regime, which is internationally competitive on rates, without

exemptions.

lGovernment to bring enabling legislation to allow employee to opt for EPF or New Pension Scheme. For

employee's below a certain threshold of monthly income, contribution to EPF to be option, without

affecting employees' contribution.

lObjective of stable taxation policy and a non-adversarial tax administration.

lFight against the scourge of black money to be taken forward.

lNo change in rate of personal income tax.

lProposal to reduce corporate tax from 30% to 25% over the next four years, starting from next financial year.

lAbolition of the wealth tax and replacement with additional surcharge of 2% on the super-rich with a

taxable income of over Rs. 1 crore.

lSurcharge @12% as against current rate of 10%.

lRationalisation and removal of various tax exemptions and incentives to reduce tax disputes and improve

administration.

An expert committee to examine the possibility and prepare a draft legislation where the need for multiple

l

lEvasion of tax in relation to foreign assets to have a punishment of rigorous imprisonment upto 10 years, be

non-compoundable, have a penalty rate of 300% and the offender will not be permitted to approach the

Settlement Commission.

lNon-filing of return/filing of return with inadequate disclosures to have a punishment of rigorous

imprisonment upto 7 years.

lUndisclosed income from any foreign assets to be taxable at the maximum marginal rate.

lMandatory filing of return in respect of foreign asset.

lPAN being made mandatory for any purchase or sale exceeding Rupees 1 lakh.

lLeverage of technology by CBDT and CBEC to access information from either's data bases.

lTax "pass through" to be allowed to both category I and category II alternative investment funds.

lRationalisation of capital gains regime for the sponsors exiting at the time of listing of the units of REITs

and InvITs.

lRental income of REITs from their own assets to have pass through facility.

lPermanent Establishment (PE) norm to be modified to encourage fund managers to relocate to India.

lGeneral Anti Avoidance Rule (GAAR) to be deferred by two years.

lGAAR to apply to investments made on or after 01.04.2017, when implemented.

lAdditional investment allowance (@ 15%) and additional depreciation (@35%) to new manufacturing units

set up during the period 01-04-2015 to 31-03-2020 in notified backward areas of Andhra Pradesh and

Telangana.

lRate of Income-tax on royalty and fees for technical services reduced from 25% to 10% to facilitate

technology inflow.

lBenefit of deduction for employment of new regular workmen to all business entities and eligibility

threshold reduced.

lBalance of 50% of additional depreciation @ 20% for new plant and machinery installed and used for less

than six months by a manufacturing unit or a unit engaged in generation and distribution of power is to be

allowed immediately in the next year.

lSimplification of tax procedures.

lMonetary limit for a case to be heard by a single member bench of ITAT increase from Rs.5 lakh to Rs.15

lakh.

lProvision of indirect transfers in the Income-tax Act suitably cleaned up.

lApplicability of indirect transfer provisions to dividends paid by foreign companies to their shareholders to

be addressed through a clarificatory circular.

lDomestic transfer pricing threshold limit increased from Rs. 5 crore to Rs. 20 crore.

lMAT rationalised for FIIs and members of an AOP.

lTax Administration Reform Commission (TARC) recommendations to be appropriately implemented during

the course of the year.

lDonation made to National Fund for Control of Drug Abuse (NFCDA) to be eligible for 100% deduction u/s

80G of Income-tax Act.

lSeized cash can be adjusted towards assessees tax liability.

l100% deduction for contributions, other than by way of CSR contribution, to Swachh Bharat Kosh and Clean

Ganga Fund.

Exemption to individual tax payers to continue to facilitate savings.

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

44

l

limit increased from Rs. 20000 to Rs. 30000.

lSenior citizens above the age of 80 years, who are not covered by health insurance, to be allowed

deduction of Rs. 30000 towards medical expenditures.

lDeduction limit of Rs. 60000 with respect to specified decease of serious nature enhanced to Rs. 80000 in

case of senior citizen.

lAdditional deduction of Rs. 25000 allowed for differently abled persons.

lLimit on deduction on account of contribution to a pension fund and the new pension scheme increased

from Rs. 1 lakh to Rs. 1.5 lakh.

lAdditional deduction of Rs. 50000 for contribution to the new pension scheme u/s 80CCD.

lPayments to the beneficiaries including interest payment on deposit in Sukanya Samriddhi scheme to be

fully exempt.

lConcession to individual tax-payers despite inadequate fiscal space.

lYoga to be included within the ambit of charitable purpose under Section 2(15) of the Income-tax Act.

lTo mitigate the problem being faced by many genuine charitable institutions, it is proposed to modify the

ceiling on receipts from activities in the nature of trade, commerce or business to 20% of the total receipts

from the existing ceiling of Rs. 25 lakhs.

lMost provisions of Direct Taxes Code have already been included in the Income-tax Act, therefore, no great

merit in going ahead with the Direct Taxes Code as it exists today.

lService tax rate plus education cess increased from 12.36% to 14% to facilitate transition to GST

lIncrease in basic custom duty:

vMetallurgical coke from 2.5% to 5%.

vTariff rate on iron and steel and articles of iron and steel increased from 10% to 15% but there is no

change in the effective rate

vTariff rate on commercial vehicles increased from 10% to 40%. However effective rate has increased from

10% to 20% on the commercial vehicles imported other than in CKD condition.

lBasic custom duty on digital still image video camera with certain specification reduced to nil.

lExcise duty on rails for manufacture of railway or tram way track construction material exempted

retrospectively from 17-03-2012 to 02-02-2014, if no CENVAT credit of duty paid on such rails is availed.

lService-tax to be levied on service provided by way of access to amusement facility, entertainment events

or concerts, pageants, non-recognised sporting events etc.

lService-tax exemption:

vServices of pre-conditioning, pre-cooling, ripening etc. of fruits and vegetables.

Life insurance service provided by way of Varishtha Pension Bima Yojana.

All ambulance services provided to patients.

Admission to museum, zoo, national park, wild life sanctuary and tiger reserve.

Transport of goods for export by road from factory to land customs station.

lEnabling provision made to exclude all services provided by the Government or local authority to a

business entity from the negative list.

lService-tax exemption to construction, erection, commissioning or installation of original works pertaining

to an airport or port withdrawn.

Limit of deduction of health insurance premium increased from Rs. 15000 to Rs. 25000, for senior citizens

Indirect Tax

v

v

v

v

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

44

l

limit increased from Rs. 20000 to Rs. 30000.

lSenior citizens above the age of 80 years, who are not covered by health insurance, to be allowed

deduction of Rs. 30000 towards medical expenditures.

lDeduction limit of Rs. 60000 with respect to specified decease of serious nature enhanced to Rs. 80000 in

case of senior citizen.

lAdditional deduction of Rs. 25000 allowed for differently abled persons.

lLimit on deduction on account of contribution to a pension fund and the new pension scheme increased

from Rs. 1 lakh to Rs. 1.5 lakh.

lAdditional deduction of Rs. 50000 for contribution to the new pension scheme u/s 80CCD.

lPayments to the beneficiaries including interest payment on deposit in Sukanya Samriddhi scheme to be

fully exempt.

lConcession to individual tax-payers despite inadequate fiscal space.

lYoga to be included within the ambit of charitable purpose under Section 2(15) of the Income-tax Act.

lTo mitigate the problem being faced by many genuine charitable institutions, it is proposed to modify the

ceiling on receipts from activities in the nature of trade, commerce or business to 20% of the total receipts

from the existing ceiling of Rs. 25 lakhs.

lMost provisions of Direct Taxes Code have already been included in the Income-tax Act, therefore, no great

merit in going ahead with the Direct Taxes Code as it exists today.

lService tax rate plus education cess increased from 12.36% to 14% to facilitate transition to GST

lIncrease in basic custom duty:

vMetallurgical coke from 2.5% to 5%.

vTariff rate on iron and steel and articles of iron and steel increased from 10% to 15% but there is no

change in the effective rate

vTariff rate on commercial vehicles increased from 10% to 40%. However effective rate has increased from

10% to 20% on the commercial vehicles imported other than in CKD condition.

lBasic custom duty on digital still image video camera with certain specification reduced to nil.

lExcise duty on rails for manufacture of railway or tram way track construction material exempted

retrospectively from 17-03-2012 to 02-02-2014, if no CENVAT credit of duty paid on such rails is availed.

lService-tax to be levied on service provided by way of access to amusement facility, entertainment events

or concerts, pageants, non-recognised sporting events etc.

lService-tax exemption:

vServices of pre-conditioning, pre-cooling, ripening etc. of fruits and vegetables.

Life insurance service provided by way of Varishtha Pension Bima Yojana.

All ambulance services provided to patients.

Admission to museum, zoo, national park, wild life sanctuary and tiger reserve.

Transport of goods for export by road from factory to land customs station.

lEnabling provision made to exclude all services provided by the Government or local authority to a

business entity from the negative list.

lService-tax exemption to construction, erection, commissioning or installation of original works pertaining

to an airport or port withdrawn.

Limit of deduction of health insurance premium increased from Rs. 15000 to Rs. 25000, for senior citizens

Indirect Tax

v

v

v

v

ONE YEAR OF THE GOVERNMENT MAJOR REFORMS & POLICY ACTIONS AND AGENDA GOING FORWARD

The Confederation of Indian Industry (CII) works to create and sustain an environment conducive

to the development of India, partnering industry, Government, and civil society, through advisory

and consultative processes.

CII is a non-government, not-for-profit, industry-led and industry-managed organization, playing

a proactive role in India's development process. Founded in 1895, India's premier business

association has over 7600 members, from the private as well as public sectors, including SMEs and

MNCs, and an indirect membership of over 100,000 enterprises from around 250 national and

regional sectoral industry bodies.

CII charts change by working closely with Government on policy issues, interfacing with thought

leaders, and enhancing efficiency, competitiveness and business opportunities for industry

through a range of specialized services and strategic global linkages. It also provides a platform

for consensus-building and networking on key issues.

Extending its agenda beyond business, CII assists industry to identify and execute corporate

citizenship programmes. Partnerships with civil society organizations carry forward corporate

initiatives for integrated and inclusive development across diverse domains including affirmative

action, healthcare, education, livelihood, diversity management, skill development,

empowerment of women, and water, to name a few.

In its 120th year of service to the nation, the CII theme of 'Build India – Invest in Development, A

Shared Responsibility,' reiterates Industry's role as a partner in national development. The focus

is on four key enablers: Facilitating Growth & Competitiveness, Promoting Infrastructure

Investments, Developing Human Capital, and Encouraging Social Development.

With 66 offices, including 9 Centres of Excellence, in India, and 7 overseas offices in Australia,

China, Egypt, France, Singapore, UK, and USA, as well as institutional partnerships with 300

counterpart organizations in 106 countries, CII serves as a reference point for Indian industry and

the international business community.

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