National Economic Planning

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This is one of the major subjects we have in IIPMand this presentation is a part of it

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  • 1. Abhinav Tiwari Johara Lakhani Nagendra Pratap Singh Pradeep Damani Being Entrepreneur in India is NOT a Death Wish
  • 2. Indian Economy
    • GDP – $ 1.250 trillion
    • Growth Rate- 8.8 % avg.
    • Services – 10.7 %
    • Manufacturing- 8.4 %
    • Agriculture – 2.6 %
    • Fiscal Deficit (est.) for the year 08-09- Rs. 133,287 Crore
    • Direct tax collection-228745 crore
    • Service tax collection-23053 crore
    Source- Union Budget 08-09
  • 3. What is entrepreneur
    • Entrepreneur is one who organizes, operates and assumes the risk in a business venture in expectation of gaining the profit
    • In simple words entrepreneur is one who wants to start a business or enterprise
  • 4. Entrepreneurship helps Economy…
    • Generate Employment
    • Revenues for the Government
    • Inclusive Growth
    • New Technology
    • Development of the society
    • Gives higher purchasing power to the people of the country
  • 5. Leading Entrepreneurs of India
    • Sunil Bharti Mittal – Bharti Airtel Ltd.
    • Narayan Murthy – Infosys Technologies Ltd.
    • P.P. Chhabria – Finolex Industries Ltd.
    • Kishore Biyani – Future Group.
    • Azim Premji – Wipro.
    • Naresh Goyal – Jet Airways.
    • L.N. Jhunjhunwala – LNJ Bhilwara Group.
    • Ratan Tata- Tata Sons.
  • 6. Some facts about INDIA
    • 2 nd largest pool of scientists and engineers in the World.
    • The domestic BPO sector is projected to increase to $4 billion in 2004 and reach $65 billion by 2010. (McKinsey & Co.).
    • Wal-Mart sources $1 Billion worth of goods from India
    • Hyundai India is set to become the global small car hub.
  • 7. Indian economy- 1947 - 1991
    • India faced with a serious problem of balance of payment in 1990-91
    • Major transportation like airways, buses were in hands of government
    • Banks were nationalized
    • License raj
    • Poor infrastructure facilities
    • Major industries in the hand of government
  • 8. Indian Economy – 1991 onwards
    • Opening up the public sector to private players
    • Divesting profit making PSUs, reduction in fiscal deficit
    • End of License Raj
    • Abolishing threshold limits of MRTP companies
    • FDI
    • Autonomy to private sector
    • Reduction of import duties
  • 9. How LPG policies has helped Entrepreneur
    • Tariffs on imported capital goods have been lowered
    • Financial sector and market reform.
    • Pervasive delicensing of the industrial sector
    • Inflows of foreign investment
    • Better infrastructure
  • 10. Infrastructure Development
    • Roadways
    • Railways
    • Ports
    • Airports
    • Communication Services
    • Power
    • SEZ
    • Banking
  • 11. Roads
    • The Golden quadrilateral- completion percentage– 96.48%*
    • North – south corridor
    • East- West corridor
    • Pradhan Mantri Gram Sadak Yojna
    • Allocation for the NHDP- Rs. 12,966 crore.*
    } Completion percentage- 23.36%* *Source- Union Budget 2008-2009 Source- 11 th Planning Commission Report
  • 12. Railways
    • Indian Railways have started the work of making the dedicated freight lines on the Mumbai- Delhi and Howrah- Delhi routes called the Eastern and Western corridors.
    • The opening of container movement will help companies in a large way in terms of their logistics.
    Source- 11 th Planning Commission Report
  • 13. Ports
    • According to the trends the cargo traffic is expected to increase form 540MT in 2004-05 to 800MT in 2012 .
    • So the government has decided to upgrade all existing port to handle more traffic.
    • This port expansion process will not only help in reducing the load on the port but will also help private sector and public sector in transportation of their goods.
    Source- 11 th Planning Commission Report
  • 14. Airports
    • Air traffic in India has increased considerably for past many years.
    • For this reason government has taken up modernization of existing airports and also construction of 35 new airport.
    • Up gradation of Delhi and Mumbai airport is expected to finish by 2010 and new airports in Bangalore and Hyderabad have already been constructed.
    Source- 11 th Planning Commission Report
  • 15. Communication Services
    • On an average this sector adds 5 million customers per month
    • Contributes Rs.17000 crore to the National Exchequer.
    • Figure estimated to reach Rs. 60,000 crore by the end of 11 th five year plan
  • 16. Contd..
    • Allocation of Rs. 1680 crore to department of telecommunication.
    • Rs. 75 crore for common service centres.
    • Rs. 450 crore for SWAN
    • Rs. 275 crore for state data centres.
    Source- Union Budget 08-09
  • 17. Power Source- government of India Year Electricity – production( kWh) 2003 533,300,000,000 2004 533,300,000,000 2005 547,200,000,000 2006 556,800,000,000 2007 630,600,000,000
  • 18. Contd..
  • 19. Contd..
    • Rs. 5500 crore allocated to the Rajiv Gandhi Vidyutikaran Yojna
    • Rs. 800 crore to be provided for Accelerated power development and reforms project.
    Source- Union Budget 08-09
  • 20. Special economic zones
    • A Special Economic Zone ( SEZ ) is a geographical region that has economic laws that are more liberal than a country's typical economic laws.
    • Evolved in the last three years.
    • Central S.E.Z Act ready and already 8 states have accepted the Act.
    • Currently, India has 1022 units in operations in 9 functional SEZs, each an average size of 200 acres.
  • 21. Some functional S.E.Z’s in India
    • Kandla and Surat (Gujarat)
    • Cochin (Kerala)
    • Santa Cruz (Mumbai–Maharashtra)
    • Falta (West Bengal)
    • Chennai (Tamil Nadu)
    • Visakhapatnam (Andhra Pradesh)
    • NOIDA (Uttar Pradesh)UP
    • Ilandaikulam Madurai (Tamil Nadu)
    • Nanguneri and Tirunelveli (Tamil Nadu)
    • Nagpur (Maharashtra) MIHAN
    • Pune (Maharashtra)
    • Pithampur (Madhya Pradesh)
  • 22. Why S.E.Z’s…
    • Tax exemption
    • No license required for import of goods.
    • Manufacturing, trading and services allowed.
    • Single window approval by R.O.C.
    • No license required for manufacture of items under S.S.I.
    • 100% F.D.I allowed in manufacturing and no cap on foreign investments.
  • 23. Contd..
    • 100% tax exemption for 5 years.
    • 50% tax exemption thereafter.
    • 50% for reinvestment for 10 years.
    • Service tax exemption to S.E.Z units
    • Permitted to carry forward losses.
    • Duty free imports for goods/procurement of goods for development, maintenance and operation of S.E.Z units
  • 24. MIHAN project at Nagpur
    • Nagpur Airport has been declared as International Airport for Passenger & Cargo operation by Government of India.
    • The cost of project is Rs. 2500 crores
    • A captive power project of 100 MW to be built.
    • Size of the project – 4354 hectares
    • Companies like DLF, Wipro, Satyam have been allotted space in the SEZ.
    • Boeing is setting up a M.R.O facility with an investment of Rs.850 crores.
    Source- MADC website
  • 25. Banking
    • Time bound working.
    • Change in attitude towards customers.
    • Transparency in procedures.
    • Increase in banking hours.
    • New services.
  • 26. Source of Finance
    • SIDBI
    • IFCI
    • ICICI
    • IDBI
  • 27. SIDBI
    • New entrepreneurs
    • Direct credit schemes
    • Technology upgradation fund
    • Composite loan schemes
    • Single window schemes
  • 28. Contd..
    • Existing Entrepreneurs
    • Direct credit schemes
    • Technology upgradation fund
    • Composite loan schemes
    • Direct discounting scheme
  • 29. Budget 08-09 Highlights
    • Income tax holidays.
    • Reduction in excise duty.
    • Reduction in customs duty.
    • Application of customs duty on naphtha to protect the local producers.
  • 30. Contd..
    • Banking transaction tax withdrawn w.e.f. 1/4/09
    • Sales tax to be reduced from 3 % to 2%
    • Increase in the threshold limit of service tax- Rs. 1000000
    • Changes in Income Tax slabs
  • 31. Tools to the Entrepreneurs
    • Right to Information Act
    • Availability of various facilities online such as Income tax returns, ROC.
  • 32. Recommendations
    • Government should take measures to increase the number of tax payers.
    • The parallel economy should be brought under the tax net.
    • Committee to keep a check on government allocations and equivalent application of the money.
  • 33. Practical Cases.
  • 34. Company born in an hour
    • Name- Corporate Professionals eSolution Pvt. Ltd; New Delhi
    • Promoter filed for name application at 10:41 AM.
    • By 10:50 AM the MoA & AoA were stamped and notarized.
    • By 11:50 AM the certificate of incorporation was given by ROC
    * Source- Economic Times Delhi; Date: Aug 2, 2006; Section: Economy; Page Number: 19
  • 35. Opaque Group Excise Department Earlier Now A lot of formalities needed to be completed with the excise department for getting the excise registration. With all documents ready, one can get registration online An inspection was conducted by the excise inspector. No inspection is required now. Approval of price list by the department No approval of the price list is required. Bill Book authentication Self – authentication by the director Deposition of excise duty before the delivery of material Duty to be deposited fortnightly
  • 36. Contd… Banking Sector- Earlier Now Only nationalized banks were available Private as well as nationalized banks are available High rate of interest Interest rate now calculated on the basis of prime landing rate and performance of account Rigid attitude More customer friendly No time bound working Time bound working High amount of collateral security To be decided on the basis of project to be funded, the reputation of the company with the bank Less working hours 12 hour working for most of the banks Absence of any facility New facilities in terms of day-to-day banking as well as new credit facilities
  • 37. Import policies
    • Started business in 1977 in Secundrabad.
    • High difficulty in getting import license.
    • Only source for imported product- Custom notified shops.
    • Ease of getting import license.
    • An importer of toys and RC planes from China.
    • Fast transportation.
  • 38. Business Model
  • 39. Business Model
    • Conversion of plastic waste to crude oil.
    • A project of 5 MT. per day costs Rs. 5.5 Crore.
    • Total amount of waste generated in India – 27000 MT/day*
    • 1 kg. plastic waste yields 1 lit. of crude oil.
    *- an estimate by the Central Pollution Control Board
  • 40. Contd…
    • Cost of production – Rs. 7 per kg.
    • Cost of raw material – Rs. 12-15 per kg.
    • The crude oil produced yields petrol, diesel, kerosene, LPG and coke.
  • 41. The Process
  • 42. Calculations Source – Ministry of Petroleum, CPCB 1 USD = Rs. 40.( estimated) *- Estimated value Crude Oil Consumption in India 115 MMTPA Crude Imported 80% 92 MMTPA Waste plastic generated in India (excluding almost equal amount of imported Waste dumped in India) 27000 MT/day i.e. 9855000.00 MT/annum i.e. 9855000000.00 Kg/annum Quantity of crude that can be replaced by the output of the Zadgaonkars’ Process (Assumption: Only the Waste Plastic generated in India is processed.) 11481075 Kilo-litre /annum i.e. 11481075000.00 Litres /annum i.e. 72213791.00 Barrels/annum Average rate of crude oil *100 USD per Barrel Saving on Foreign Currency 7221379100 USD 288855164000 INR
  • 43. Advantages
    • The country would save a huge amount of Foreign Currency.
    • The dependency on OPEC nations will reduce.
    • The problem of disposal of plastic waste will get solved.
    • The petrol produced does not have any sulphur or lead content.
  • 44. Contd…
    • Successfully passed all the test conducted by IOC.
    • The vehicle tested runs better on this petrol as compared to the normal petrol.
  • 45. Our special thanks to..
    • Prof. Debajyoti Majumder.
    • Mr. J.K. Damani – Opaque Group, Nagpur.
    • Mr. Yogesh Agrawal – Chartered Accountant, Nagpur.
    • Mr. Vinod Satwani- Shopping Centre, Secundrabad
    • Mrs. Alka Zadgaonkar – H.O.D.(Chemistry),
    • G.H.R.C.E; Nagpur.
  • 46.
          • Thank You….
  • 47. Questions ???