Major Reforms

ONE YEAR OF THE GOVERNMENT
MAJOR 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

01
Reforms Undertaken
I
The 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.
Someofthemajorinitiativestakeninthepastoneyearare-
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

02
Reform / Measures
Announced
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
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.

03
Reform / Measures
Announced
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
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.

04
Reform / Measures
Announced
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.

05
Reform / Measures
Announced
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.
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.

06
Reform / Measures
Announced
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.
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
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.

07
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.
Reform / Measures
Announced
Announcement
Likely Impact
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

08
Reform / Measures
Announced
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
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.
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

09
Reform / Measures
Announced
Announcement
Likely Impact
5. Ease of doing business
Reform / Measures
Announced
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.
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.

10
Reform / Measures
Announced
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.

11
Reform / Measures
Announced
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
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
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.

12
Reform / Measures
Announced
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.
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
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.

14
Reform / Measures
Announced
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
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

15
Reform / Measures
Announced
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
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)
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

16
10. Initiatives taken by SEBI
Reform / Measures
Announced
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
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
Amendment of
prevailing SEBI
regulation and
enactment of new
regulation

17
Agenda Going Forward
II
The 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
tothehigherorbitofgrowth.
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)

18
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
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)

19
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

20
• 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
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.
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

21
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.

22
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

23
• 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.
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

24
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.
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
Capital Goods

25
• 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
the National Chemical Policy
Capital Goods

26
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)

27
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

28
• 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.
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
This would help
revive confidence
amongst investors.

29
Allowing sponsors to exit fully
from the existing
infrastructure projects.
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
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
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
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.

31
• 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

32
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.

33
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

34
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

35
• 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

36
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.
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

37
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
• 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

38
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

39
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.
• 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

40
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.

41
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

42
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

43
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.

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

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