Includes expectations from the Union Budget of 2016 in 3 sectors - Infrastructure, Startup Funding and Ease of Doing Business. It includes an analysis of policies in the Budget of 2015 and a log of measures the Government could take up

1. AbhirupLahiri
SwatiSingh
VipulSharma
Chanakya
Case Submission

2. Indian Institute of Foreign Trade | Delhi
Infrastructure
Ease of Doing
Business
Start-up funding
The Selected
Three
The Selected three
This slide gives us an overview of the selected three categories and reasons for choosing them
Infrastructure : corner stone of India’s growth story
• Infra accounts for 31.2% of our GDP
• It must be realized that 68% of India's national income (in FY '16) is contingent on 35% of stalled projects
ranging from aviation to roadways to real estate
• As government takes upon measures to cut red-tape, we must closely analyze how is India faring in making
businesses (both core and service sector) achieve the goal of robust infrastructure for India's ever burgeoning
population
Start Up Funding: aiding the process of setting up business
• As we wish to cater to the large demographic of age 25-40 years, we must build the entrepreneurial streak in
making our youth self-sustainable
• India boasts of 10,11,05,987 start ups as of 2015. Every day 10,000+ start ups are created to make India's
dream the new ‘American Dream’. Again, role of ease of doing business is paramount to achieve this end
Ease of Doing Business: providing the right environment
• As we wish to cater to the large demographic of age 25-40 years, we must build the entrepreneurial streak in
making our youth self-sustainable.
• India boasts of 10,11,05,987 start ups as of 2015. Every day 10,000+ start ups are created to make India's
dream the new "American Dream". Again, role of ease of doing business is paramount to achieve this end
Thus a robust infra boosted by a transparent system will foster the right environment for investors to pump in money for start
ups in India. We endeavor to analyze these three factors in detail in the coming slides.

3. Indian Institute of Foreign Trade | Delhi
InFRASTRUCTURE (1/2)
Policy changes in the previous budget
1. A significant increase of Rs.70,000 crore in investment in infrastructure in 2015-16 over the current year, with a focus on railways and
roads.
2. National Investment and Infrastructure Fund will find monies to ensure an annual flow of Rs.20,000 crore to it.
3. Issuing tax-free bonds for raising funds for investment in rail, roads and irrigation
4. Public Contracts (Resolution of Disputes) Bill to streamline the institutional arrangement for the resolution of disputes that have
stalled projects
5. The budget proposed to take measures to deepen the bond market to promote investment by a Public Debt Management Agency
(PDMA)
Achievements Failures
• Mudra Bank expected to have given advances to the
tune of Rs. 1.2 Lakh Crore by the end of this fiscal year
• Signing up of multi-billion dollar infrastructure projects
with China and Japan
• 304 projects still stalled with the Project Management
Group of the PM's Cabinet Secretariat
• NPAs of Rs. 12.8 Lakh Crore generated through stalled
infrastructure projects
Analyzing the scenario until now
Infrastructure is highly responsible for propelling India’s overall development and enjoys intense focus
from Government for initiating policies. The Ministry of Road Transport outlined plans for $120 billion
worth of road-widening projects, with 65% of this money coming from the private sector. There are also
plans for $60 billion to be invested in India’s ports. The strong position makes infrastructure a crucial
sector the Union Budget of 2016.
Infrastructure
Ease of Doing
Business
Start-up funding
The Selected
Three
This slide gives us current scenario, changes made in the previous budget and its achievements/failures in infrastructure

4. Indian Institute of Foreign Trade | Delhi
InFRASTRUCTURE (2/2)
Infrastructure
Ease of Doing
Business
Start-up funding
The Selected
Three
Regulatory reforms to expedite execution and financing of infrastructure projects
1
Recommendation Implication
Raise Public Spending through PPP model
• Brown-field modernization of railway stations
through Public Private Partnership
• Modernization of ports and setting up of
automated cargo handling terminals through PPP
• Will help sustain growth in core manufacturing sectors where
growth has dipped by 4.6% which amounts to a loss of Rs.
56,000 cr. to the national coffers.
• Reassure the strength of PPP projects through concerted
effors as recommended by Kelkar Committee.
2
Standardizations of labor contracts
• Bring parity in the definition and valuation
technique of works contracts under the Service
Tax Law and the VAT Law. Currently VAT
• Avoiding double taxation in VAT-applicable states. Taxation on
receipt of advances leads to payment of Service Tax as well as
VAT with a double taxation of up to 140%. This is a major
additional expense in infrastructure projects.
3
• Banks face trouble meeting short term investment demands
as most of their funds are stuck in long-term loans given for
infrastructure.
• Infrastructure companies could issue bonds to make money
for investments and the Government could earn through
municipal bonds for funding infrastructure projects
Revolutionizing Bond Market
• Create a national financial intermediary to issue
municipal bonds on behalf of its members
• Creation of bond index to track corporate bonds
and deepen investor’s trust.

5. Indian Institute of Foreign Trade | Delhi
EASEOF DOINGBUSINESS(1/2)
This slide gives us current scenario, changes made in the previous budget and its achievements/failures in ease of doing business
Achievements Failures
Analyzing the scenario until now
With an aggressive push towards the 'Make in India' initiative, increase in FDI caps in various industrial
sectors and efforts towards expediting foreign investment, the Government has made 'ease of doing
business' a crucial parameter for the success of its initiatives. However, ranked 130 in the world, India has
a long way to go before it can boast of a strong ecosystem of convenience for businessmen.
Policy changes in the previous budget
1. The application for Industrial License ("IL") and Industrial Entrepreneur Memorandum ("IEM") can be made online.
2. The country also figures among those that simplified preregistration and registration formalities such as publication, inspection
among others.
3. India eliminated the paid-in minimum capital requirement to start a business and also streamlined the processes to start up.
4. Put in place an investor-friendly policy, under which FDI, up to 100%, is permitted, under the automatic route, in sectors like railways
and healthcare.
Mr Jaitely's attempts to improve the ease of doing business
have yielded good result with the country jumping 12 ranks
to 130 in the latest ranking compiled by the World Bank.
• Red-tapism is still rampant in government institutions
and fixing accountability seems a long haul even now.
• India still ranks below the likes of Bhutan and other LDCs
in "spurious audits" of its registered companies and thus
leading rampant development of NPAs in these firms.
Infrastructure
Ease of Doing
Business
Start-up funding
The Selected
Three

6. Indian Institute of Foreign Trade | Delhi
Infrastructure
Ease of Doing
Business
Start-up funding
The Selected
Three
Cutting down the red tape by making bureaucracy accountable and increased use of PPP
Expediting registering/completion process
• Online issuing: building plan and completion certificates
• Empowering Architects, Engineers and Surveyors
empaneled by Development Authorities to issue the
building permits/completion certificate remotely.
• Outsourcing registration procedures to private sector
• Creation of a special cell for handling clearances
• Among the various parameters in the 'Ease of Doing Business
Index', dealing with construction permits is India's weakest
link. Reforms would significantly improve India's ease of doing
business
1
Recommendation Implication
Unclogging complicated tax mesh
Introducing a sunset clause on corporate tax exemptions:
Phase 1: Exemptions which are not needed any more will be
removed
Phase 2: all open-ended exemptions would be given sunset
dates
Phase3: Rationalization of exemptions given for capita-linked
expenditure and R&D
Phase 4: Rationalization of accelerated depreciation
• Expedite the process of corporate tax cut from 30% to 25% in 4
years, as announced last year
• Free up revenues by reducing amounts of foregone profit
• Help remove the tarnish on India's image of having high
corporate tax and thereby sentiment regarding ease of doing
business
2
• It takes over 4 years to enforce a contract in India and this is an
extremely weak spot for ease of doing business.
• Quicker settlement and streamlining of arbitration processes
will help businesses clear litigation faster and expedite their
growth path.
3
EASEOF DOINGBUSINESS(2/2)
Fast Arbitration
Setting up of special courts for settlement through
arbitration in a time-bound manner in line with the
recommendations of the Arbitration and Counciliation
Amendment Bill.

7. Indian Institute of Foreign Trade | Delhi
START-UP FUNDING(1/2)
This slide gives us current scenario, changes made in the previous budget and its achievements/failures in start-up funding
Achievements Failures
Analyzing the scenario until now
Rightfully christened 'Startup India StandUp India', the Government is pushing job creation by leveraging the
startup landscape in the country. With the introduction of new microfinance institutions, credit guarantee
schemes and pools of funds, the Government is making concerted efforts towards developing India's very own
Silicon Valley. This, along with the strong demographic dividend of a population below the age of 35 calls for
exciting developments in the field of startups in India
Policy changes in the previous budget
1. Creation of Micro Units Development Refinance Agency (MUDRA) Bank, with a corpus of Rs.20,000 crores.
2. Credit guarantee corpus of Rs.3,000 crores.
3. Corporate tax reduction from 30% to 25% over 4 years.
4. Allocation of Rs. 1,000 crores for setup of the ‘Self Employment and Talent Utilization’ program to incubate startups.
• $7.3 billion was invested in startups in the first 3
quarters of 2015
• Number of startups who received funding doubled to
400 in 2015.
• Average weekly startup funding of $95 million
• A company takes a minimum of 29 days to start up, not
competitive viz-a-viz most of the high-growth countries
• Companies with limited access to angel or VC funding
• Exit policies are very cumbersome and hence re-
investment in a new business is tough for a failing startup
Infrastructure
Ease of Doing
Business
Start-up funding
The Selected
Three

8. Thank You!
Start-up funding (2/2)
Infrastructure
Ease of Doing
Business
Start-up funding
The Selected
Three
Regulatory reforms to expedite execution and financing of infrastructure projects
1
Recommendation Implication
• Rs. 10,000 cr corpus assigned to help start-ups
should be managed by professional fund
managers and not politicians.
• Selection of such fund managers should be on
basis of proven track record.
2
Straightening out policies and tax regimes
• Removal of angel tax (currently at 33%)
• Service tax holiday for 3 years
• Lay down a road map for list of reforms under the
'Startup India Standup India' initiative.
• Will pump up forex reserves as foreign angel investors will
have added incentive to invest. (and will not divert to
Singapore/UK)
• Permanent establishments will rise and will offset any revenue
lost due to forgone ‘angel tax’.
• Would reduce the biggest burden on the funds that a startup
has, in its initial stages (with zero or minimal profit)
3 • Create an innovative financial instrument which
bridges investors’ risk appetite with the
impending need for startup funding
• This will be analogous to mutual funds in
investors’ parlance
Streamlining ‘Fund of Funds’ initiative • Will inject much needed expertise and professionalism
• Corruption levels stand to dip considerably as there would little
to no vested interests of hired professionals.
• Reduces the hold of institutional investors on the profit
objectives of the startup as the Governmental scheme brings
along with it, a sense of social security as well
Crowd-sourcing of start up funds
• There will be significant hedging of startup risk through
diversification.
• It will help cast a wider net in roping in investors to the
upcoming sphere of startups.