The document provides an overview of key topics related to business environment and economic policies in India. It discusses 5 units: 1) business environment analysis, 2) Indian financial systems, 3) economic policies of India, 4) liberalization, privatization and globalization in the Indian economy, and 5) economic survey and union budget. The final section focuses on fiscal policy, taxation, and key concepts like value added tax. It outlines India's direct and indirect tax structures and recent reforms to taxation.

1. Business
Environment
Unit - 5
PRESENTED BY
K.BALASRI PRASAD
B.Sc(KU), M.B.A(OU), NET(UGC), (Ph.D)(MGU)

2. BBA/MBA 5 year Integrated Course II Year -III Semester
Paper No. 3.5 Business Environment
Unit -I: Business Environment and Analysis:
Nature, Composition and Scope of Business Environment. Business Environment and its impact on different kinds of business
decisions. Economic growth and Economic Development. Analysis of India’s National Income. Recent trend in the growth of
National Income and its important components: Saving, Investment, Industry, Agriculture and Tertiary Sectors.
Unit-II: Indian Financial Systems:
Evolution and Structure of Indian Financial System. Elements of Indian Financial System— Markets, Institutions, and Environment.
Money Market and the role of banking, Non-banking and Unorganized Sector. Regulatory function of RBI with special reference to Money
market. Components of Capital Market—Primary, Secondary, Debt and Equity Market. Problems and Prospects of Indian Capital
Market.
Unit-III: Economic Policies of India:
Industrial Environment and Policy. Role of SSUs, and MNCs. Policy of Public Sector and its role in the economy. Competition Law.
Polices on Foreign Investment and Trade (EXIM).
Unit-IV: Liberalisation, Privatisation, and Globalisation (LPG) in Indian Economy:
Concept of LPG, Process of LPG followed in India. Globalization and role of WTO. Regional Trading Blocks. India’s Foreign Trade
and Agreements with Trading Blocks.
Unit-V: Economic Survey and Union Budget:
Fiscal Policy and Present Tax Environment –Direct and Indirect Taxes. Concept of Value Added Tax. Current Year’s Economic Survey
and Union Budget.
References:
1. Justin Paul, 2010, “Business Environment”, McGraw-Hill Companies.
2. Misra and Puri V.K, 2010 “Indian Economy”, Himalaya Publishing House, Bombay.
3. Shaik Saleem, “Business Environment”, Pearson Edition.
4. K. Aswathappa, 2010, “Essentials of Business Environment”, HPH
5. VIvek Mittal, “Business Environment”, 2010, Excel Books, New Delhi.
2-Apr-22
2

3. Unit-V
Economic Survey and Union Budget
Fiscal Policy and Present Tax Environment
Direct and Indirect Taxes
Concept of Value Added Tax
Current Year’s Economic Survey and Union Budget

4. Fiscal Policy and Present Tax Environment
Fiscal policy deals with the taxation and expenditure
decisions of the government.
Some of the major instruments of fiscal policy are as
follows: Budget, Taxation, Public Expenditure, public
revenue, Public Debt, and Fiscal Deficit in the economy.
Fiscal policy means the use of taxation and public
expenditure by the government for stabilization or growth
of the economy.
According to Culbarston, “By fiscal policy we refer to
Government actions affecting its receipts and
expenditures which ordinarily as measured by the
government’s receipts, its surplus or deficit.”

5. Fiscal policy also feeds into economic trends and
influences monetary policy.
When the Government receives more than it
spends, it has a surplus.
If the government spends more than it receives it
runs a deficit.
To meet the additional expenditures, it needs to
borrow from domestic or foreign sources, draw
upon its foreign exchange reserves.

6. On a broad generalization, excessive printing of money
leads to inflation.
If the government borrows too much from abroad it
leads to a debt crisis.
Excessive domestic borrowing by the government may
lead to higher real interest rates and the domestic private
sector being unable to access funds resulting in the
“crowding out” of private investment.
Fiscal policy of India always has two objectives, namely
improving the growth performance of the economy and
ensuring social justice to the people.

7. General objectives of Fiscal Policy are given below:
1. To maintain and achieve full employment.
2. To stabilize the price level.
3. To stabilize the growth rate of the economy.
4. To maintain equilibrium in the Balance of Payments.
5. To promote the economic development of underdeveloped
countries.

8. The fiscal policy is designed to achieve certain objectives :-
1. Development by effective Mobilisation of Resources:
 The principal objective of fiscal policy is to ensure rapid
economic growth and development which can be achieved by
Mobilisation of Financial Resources.
 The central and state governments in India have used fiscal
policy to mobilise resources.
The financial resources can be mobilised by:-
a. Taxation: Through effective fiscal policies, the government aims
to mobilise resources by way of direct taxes as well as indirect
taxes because most important source of resource Mobilisation in
India is taxation.
b. Public Savings: The resources can be mobilised through public
savings by reducing government expenditure and increasing
surpluses of public sector enterprises.

9. C. Private Savings:
 Through effective fiscal measures such as tax benefits, the government can
raise resources from private sector and households.
 Resources can be mobilised through government borrowings by ways of
treasury bills, issuance of government bonds, etc., loans from domestic and
foreign parties and by deficit financing.
2. Reduction in inequalities of Income and Wealth:
 Fiscal policy aims at achieving equity or social justice by reducing income
inequalities among different sections of the society.
 The direct taxes such as income tax are charged more on the rich people as
compared to lower income groups.
 Indirect taxes are also more in the case of semi-luxury and luxury items
which are mostly consumed by the upper middle class and the upper class.
 The government invests a significant proportion of its tax revenue in the
implementation of Poverty Alleviation Programmes to improve the
conditions of poor people in society.

10. 3. Price Stability and Control of Inflation:
 One of the main objectives of fiscal policy is to control inflation and stabilize price.
 Therefore, the government always aims to control the inflation by reducing fiscal
deficits, introducing tax savings schemes, productive use of financial resources, etc.
4. Employment Generation:
 The government is making every possible effort to increase employment in the
country through effective fiscal measures.
 Investment in infrastructure has resulted in direct and indirect employment.
 Lower taxes and duties on small-scale industrial (SSI) units encourage more
investment and consequently generate more employment.
 Various rural employment programmes have been undertaken by the Government
of India to solve problems in rural areas.
 Similarly, self employment scheme is taken to provide employment to technically
qualified persons in the urban areas.
5. Balanced Regional Development:
 There are various projects like building up dams on rivers, electricity, schools, roads,
industrial projects etc run by the government to mitigate the regional imbalances in
the country. This is done with the help of public expenditure.

11. Present Tax Environment
 Tax environment in India has become quite dynamic and that much is being done to
create a taxpayer friendly environment for compliant taxpayers.
 The government is creating awareness amongst the masses about being tax
compliant in India and is also cracking down on instances of tax evasion and black
money hoarding in India.
 To illustrate, the government is educating Indian school children on the importance
of paying correct taxes in India.
Key reforms from local as well as cross border tax perspective:
A. LOCAL TAX PERSPECTIVE
1. Tax incentive for employment generation
 With a view to giving a boost to the ‘Make-in-India’ movement of the
government and also generate employment across all sectors of the
industry, an additional deduction from taxable profits for salaries
paid to ‘new employees’ employed during the year is introduced in
Finance Act, 2016.
 Earlier, this deduction was only restricted to Indian taxpayers engaged
in ‘manufacturing’ business.

12. 2. Central Board of Direct Taxes (CBDT) issues revised instructions for staying of
disputed tax demands at stage of first–level appeal
 The CBDT has now issued an instruction to tax officers to generally
insist on payment of only 15% of the disputed tax demand.
3. General Anti-Avoidance Rules (GAAR)
 The GAAR looks to deny tax benefits in cases where entire
transactions/arrangements were undertaken not for commercial
reasons but for the main purpose of obtaining tax benefit in India.
4. Patent Box Regime
 The government has decided to put in place a concessional taxation
regime for income from patents.
 Accordingly, an Indian resident earning royalty from a patent
developed and registered in India can, subject to conditions, choose
to pay tax @ 10% (plus the applicable surcharge and cess) on the
gross amount of royalty.
 However, no expenditure or allowance from such royalty income shall
be allowed.

13. 5. Goods and Services Tax (GST)
 The GST which proposes to subsume almost 15 major indirect
taxes (except customs duty in India) will go a long way in
decluttering the multi-layered structure of Indian indirect taxes.
 Goods and Services Tax (GST) is an indirect tax (or consumption
tax) used in India on the supply of goods and services. It is a
comprehensive, multistage, destination-based tax:
comprehensive because it has subsumed almost all the indirect
taxes except a few state taxes.
 Goods and services are divided into five different tax slabs for
collection of tax: 0%, 5%, 12%, 18% and 28%.
 However, petroleum products, alcoholic drinks,
and electricity are not taxed under GST and instead are taxed
separately by the individual state governments, as per the
previous tax system.

14. B. CROSS BORDER TAX PERSPECTIVE
1. India-Mauritius Tax Treaty Amended - Advantage India
India and Mauritius have signed a protocol on 10 May 2016
amending the over thirty year old tax treaty.
The major amendments to the tax treaty are the provision
of source based taxation of:
capital gains arising on sale of shares of an Indian
Company
Interest income of Mauritian banks
service income from India
The main advantage to India from this protocol is that gains
arising from sale of shares of an Indian company which are
acquired on or after 1 April 2017 will now be subject to tax
in India.

15. 2. Equalisation levy
An equalisation levy @ 6% is to be charged/deducted by
an Indian resident engaged in business, on the amount
paid for receipt of any ‘specified service’ from a non-
resident.
The term ‘specified service’ means online advertisement,
any provision for digital advertising space or any other
facility or service for the purpose of online advertisement
and includes any other service as may be notified by the
central government in this regard.
This is India’s version of a ‘Google tax’ based on the
Action Plan 1 of Base Erosion and Profit Shifting (BEPS)
project of the OECD.

16. 3. Non-applicability of higher withholding tax rate provided
under section 206AA of the ITA
 With effect from 1 June 2016 to provide that the provisions of
higher withholding tax of 20% in case of non-furnishing of
Permanent Account Number, will not apply on payments to a
non-resident in certain cases subject to furnishing of alternate
documentation by such non-resident.
4. CBDT notifies Foreign Tax Credit (FTC) Rules
 The CBDT has notified Foreign Tax Credit (FTC) Rules which lay
down broad principles and conditions for Indian taxpayers to
uniformly claim deduction or credit for taxes paid in foreign
jurisdictions.
 The introduction of such rules was much awaited as a lot of
Indian companies with foreign income faced difficulties while
trying to avail FTC and ended up paying taxes in both countries
on the same income.

17. 5. CBDT notifies ‘indirect transfer’ valuation rules
 The Income tax law was amended by the Finance Act 2012 to tax
gains arising from a transfer of a share of interest in a foreign
entity that derives, directly or indirectly, its value substantially
from assets located in India.
The above provisions and discussions, it can
be seen that the tax environment in India has
become quite dynamic and the government
is attempting to create a taxpayer friendly
environment in India for tax compliant
taxpayers.

18. Direct and Indirect Taxes
 Taxation in India is majorly divided into Central and State Govt
taxes with two types of taxes:
1. Direct Taxes
2. Indirect Taxes
 Direct taxes are levied on your earnings in India, Indirect taxes are
levied on expenses.
 The responsibility to deposit the direct tax liability lies with the
earning party.
 The most important type of Direct tax is the income tax.
 This tax is levied during each assessment year (1st April to 31st
March).
 As per the Income Tax Act, 1961, it is mandatory for you to make
income tax payments if your annual income is above the minimum
exemption limit.

19.  Indirect taxes are collected majorly by the corporates and businesses
providing services and products.
 Thus, the responsibility to deposit indirect taxes lies with these entities.
Different Types of Direct Tax
 Direct taxes account for almost 50% of the government’s revenue in
India.
 However, income tax is not the only direct tax.
 Here are the types of direct taxes applicable in India:
1. Income Tax
2. Capital Gains Tax
3. Corporate Tax
1. Income Tax
 Income tax applies to any income of an Individual and HUF except capital
gains and profits from business and profession.
 Income tax is calculated as per the applicable slab rates for the
Assessment Year.

20. 2. Capital Gains Tax
 Capital gains tax apply to the profits from the sale of a capital
asset only.
 The rate of tax on capital gains depends on the type of capital
gain.
 Income Tax Act, 1961 divides the capital gains tax into the
following two types:
Short-Term Capital Gains Tax
Long-Term Capital Gains Tax
 Short-term capital gains are when the assets are sold within a
specified period, for example:
a) Equity stocks sold within 12 months of purchase
b) Debt mutual fund units sold within 36 months of purchase
c) Real estate property or gold sold within 36 months of purchase

21. 3. Corporate Tax
 The corporate tax applies to the businesses and entities filing
their returns as a company.
 This is also a slab rate depending on the turnover of the firm.
Companies in India have been broadly divided into the following two categories:
1. Domestic Corporate: Any company that is Indian is called as
domestic company or if the company is foreign but the control
and management is wholly situated in India then also it is
termed as a domestic company. An Indian company means a
company registered under the Companies Act 1956.
2. Foreign Corporate: Any foreign company is one that is not of
Indian origin and has some part of control and management of
affairs located outside India.

22. Different Types of Indirect Taxes in India
 The Indian tax system has had multiple indirect taxes, some of these are
still operational:
a) Service Tax
b) Indian Excise Duty
c) Value Added Tax (VAT)
d) Customs Duty
e) Securities Transaction Tax (STT)
f) Stamp Duty
g) Entertainment Tax
 Few of the indirect taxes in India like service tax, value-added tax and
excise duty have been removed for a large number of goods and
services.
 These taxes have been replaced by a single Goods and Services Tax.
 Customs duty tax applies to the goods being imported into India from
other countries, and in a few cases on the goods being exported from
India.

23.  Securities Transaction Tax or STT applies to the transactions
involving an exchange of financial securities.
 For example, equity stocks, mutual fund units, future and options
contracts.
 This tax is necessarily applied to securities exchange transactions.
 STT allows the buyers and sellers of securities to benefit from
lower short and long-term capital gains taxes on the exchange.
 Stamp duty is a State Government levy on the transfer of assets
within their territory.
 It acts as legal proof of ownership of the asset or security.
 Entertainment tax in India is also a state subject and applies to the
transactions involving the entertainment business in the country.
 Such businesses and activities will include movie releases, sporting
events, concerts, amusement parks, theatres, etc.

24. Concept of Value Added Tax
Value-added tax (VAT) is a consumption tax on
goods and services that is levied at each stage
of the supply chain where value is added, from
initial production to the point of sale.
VAT is based on consumption rather than
income.
In contrast to a progressive income tax, which
levies more taxes on the wealthy, VAT is
charged equally on every purchase.

25. Types of Value Added Tax (VAT)
There are three types of VAT, they are:
i. Consumption type
ii.Income type
iii.Gross National Product (GNP) type
(i) Consumption Type VAT
 A consumption tax is a tax levied on consumption spending on
goods and services.
 Under consumption type VAT, all capital goods purchased from
other firms, in the year of purchase, are excluded from the tax
base while depreciation is not deducted from the tax base in
subsequent years.
 The tax base of such a tax is the money spent on consumption.

26. (ii) Income Type VAT
 The income type VAT does not exclude capital goods purchased
from other firms from the tax base in the year of purchase.
 This type, however, excludes depreciation from the tax base in
subsequent years.
 The tax falls both on consumption and net investment. The tax
base of this type is the net national income.
(iii) GNP Type VAT
 Under this type, capital goods purchased by a firm from other
firms are not deductible from the tax base in the year of
purchase.
 It also does not allow the deduction of depreciation from the tax
base in subsequent years.
 Tax is levied both on consumption and gross investment.
 The tax base of this type is the gross domestic product.

27. Economic Survey 2021-22
Economic Survey is the flagship annual document of the
Ministry of finance – released usually a day before the
Budget for the next year is presented in the Indian
Parliament.
Economic Survey gives a detailed account of the various
sectors of the economy and overall economic scenario of
the country in the past years and provides an outline for the
year ahead.
The central theme of this year’s Economic Survey is the
“Agile approach”, implemented through India’s economic
response to the COVID-19 Pandemic shock.
As per the Agile approach, short-term policy responses can
be tailored to an evolving situation.

28. The “Agile approach” is based on feedback
loops, real-time monitoring of actual
outcomes, flexible responses, safety-net
buffers and so on.
Planning is not done in the Agile approach as a
deterministic prediction of the flow of events.
Still, planning is relevant in the framework –
mostly for scenario analysis, identifying
vulnerable sections, and understanding policy
options.

29. Economic Survey 2021-22 Summary
 Indian economy (GDP) is estimated to grow by 9.2 per cent in real
terms in 2021-22.
 GDP is projected to grow by 8- 8.5 per cent in real terms in 2022-23.
 With the enhanced borrowings on account of COVID-19, the Central
Government debt has gone up from 49.1 per cent of GDP in 2019-20
to 59.3 per cent of GDP in 2020-21 but is expected to follow a
declining trajectory with the recovery of the economy.
 Rs. 89,066 crores raised via 75 Initial Public Offering (IPO) issues in
April-November 2021 is much higher than in any year in the last
decade.
 Foreign Exchange Reserves crossed US$ 600 billion in the first half of
2021-22 and touched US $ 633.6 billion as of December 31, 2021.
 India’s overall score on the NITI Aayog SDG India Index and Dashboard
improved to 66 in 2020-21 from 60 in 2019-20.

30. The highlights of the Economic Survey:
 Economic Survey 2021-22 estimates that the Indian economy (GDP) may grow
by 9.2 per cent in real terms in 2021-22 (as per first advanced estimates)
subsequent to a contraction of 7.3 per cent in 2020-21.
 GDP is projected to grow by 8- 8.5 per cent in real terms in 2022-23.
 The year ahead is poised for a pickup in private sector investment with the
financial system in a good position to provide support for the economy’s revival.
 Agriculture and allied sectors are expected to grow by 3.9 per cent; industry by
11.8 per cent and services sector by 8.2 per cent in 2021-22.
 Economic Survey 2021-22 observes that the revenue receipts from the Central
Government (April to November 2021) have gone up by 67.2 per cent (YoY) as
against the expected growth of 9.6 per cent in the 2021-22 Budget Estimates
(over 2020-21 Provisional Actuals).
 Gross Tax Revenue registers a growth of over 50 per cent from April to
November 2021 in YoY terms. This performance is strong compared to pre-
pandemic levels of 2019-2020 also.
 India’s external debt rose to US $ 593.1 billion at the end-September 2021, from
US $ 556.8 billion a year earlier

31. Foreign Exchange Reserves crossed US$ 600 billion in the
first half of 2021-22 and touched US $ 633.6 billion as of
December 31, 2021.
Economic Survey 2021-22 notes that the liquidity in the
system remained in surplus.Repo rate was maintained at 4
per cent in 2021-22.
The economic shock of the pandemic has been weathered
well by the commercial banking system:YoY Bank credit
growth accelerated gradually in 2021-22 from 5.3 per cent
in April 2021 to 9.2 per cent as of 31st December 2021.
The Gross Non-Performing Advances ratio of Scheduled
Commercial Banks (SCBs) declined from 11.2 per cent at the
end of 2017-18 to 6.9 per cent at the end of September
2021.

32.  Exceptional year for the capital markets: Rs. 89,066 crores were
raised via 75 Initial Public Offering (IPO) issues in April-
November 2021, which is much higher than in any year in the
last decade.
 Sensex and Nifty scaled up to a touching peak at 61,766 and
18,477 on October 18, 2021.
 The average headline CPI-Combined inflation moderated to 5.2
per cent in 2021-22 (April-December) from 6.6 per cent in the
corresponding period of 2020-21.
 The decline in retail inflation was led by the easing of food
inflation.
 Food inflation averaged at a low of 2.9 per cent in 2021-22 (April
to December) as against 9.1 per cent in the corresponding
period last year.
 Wholesale inflation based on the Wholesale Price Index (WPI)
rose to 12.5 per cent during 2021-22 (April to December).

33. India’s overall score on the NITI Aayog SDG India Index and
Dashboard improved to 66 in 2020-21 from 60 in 2019-20
and 57 in 2018-19.
In 2020, the forests covered 24% of India’s total
geographical, accounting for 2% of the world’s total forest
area.
In August 2021, the Plastic Waste Management
Amendment Rules, 2021, was notified which is aimed at
phasing out single-use plastic by 2022.
Draft regulation on Extended Producer Responsibility for
plastic packaging was notified.
The consequent reduction in effluent discharge has been
from 349.13 million litres per day (MLD) in 2017 to 280.20
MLD in 2020.

34.  The Agriculture sector experienced buoyant growth in the past two
years, accounting for a sizeable 18.8% (2021-22) in Gross Value Added
(GVA) of the country registering a growth of 3.6% in 2020-21 and 3.9%
in 2021-22.
 Minimum Support Price (MSP) policy is being used to promote crop
diversification.
 Allied sectors including animal husbandry, dairying and fisheries are
steadily emerging to be high growth sectors and major drivers of
overall growth in the agriculture sector.
 Index of Industrial Production (IIP) grew at 17.4 per cent (YoY) during
April-November 2021 as compared to (-)15.3 per cent in April-
November 2020.
 Capital expenditure for the Indian railways has increased to Rs.
155,181 crores in 2020-21 from an average annual of Rs. 45,980
crores during 2009-14 and it has been budgeted to further increase to
Rs. 215,058 crores in 2021-22 – a five times increase in comparison to
the 2014 level.

35. Introduction of Production Linked Incentive (PLI) scheme,
the major boost provided to infrastructure-both physical as
well as digital, along with measures to reduce transaction
costs and improve ease of doing business, would support
the pace of recovery.
GVA of services crossed pre-pandemic level in July-
September quarter of 2021-22; however, GVA of contact
intensive sectors like trade, transport, etc. still remain
below pre-pandemic level.
Overall service Sector GVA is expected to grow by 8.2 per
cent in 2021-22.
According to Employees Provident Fund Organisation
(EPFO) data, formalization of jobs continued during the
second COVID wave;

36. As per the National Family Health Survey-5: Total
Fertility Rate (TFR) came down to 2 in 2019-21 from
2.2 in 2015-16; Infant Mortality Rate (IMR), under-
five mortality rate and institutional births have
improved in 2019-21 over the year 2015-16.
Under Jal Jeevan Mission (JJM), 83 districts have
become ‘Har Ghar Jal’ districts.
Increased allotment of funds to Mahatma Gandhi
National Rural Employment Guarantee Scheme
(MNREGS) to provide a buffer for unorganized
labour in rural areas during the pandemic.

37. UNION BUDGET 2021-22
 The first ever digital Union Budget, Union Minister of Finance and Corporate Affairs
Ms. Nirmala Sitharaman stated that India’s fight against COVID-19 continues into
2021.
The key highlights of the Union Budget 2021-22:
 Six pillars of the Union Budget 2021-22:
1. Health and Wellbeing
2. Physical & Financial Capital, and Infrastructure
3. Inclusive Development for Aspirational India
4. Reinvigorating Human Capital
5. Innovation and R&D
6. Minimum Government and Maximum Governance
1. Health and Wellbeing
 Rs. 2,23,846 crore (US$ 30.70 billion) outlay for Health and Wellbeing in BE 2021-22
as against Rs. 94,452 crore (US$ 12.95 billion) in BE 2020-21 – an increase of 137%.
 Focus on strengthening three areas: Preventive, Curative, and Wellbeing
 Vaccines
 Rs. 35,000 crore (US$ 4.80 billion) for COVID-19 vaccine in BE 2021-22.
 The Made-in-India Pneumococcal Vaccine to be rolled out across the country,
from present 5 states – to avert 50,000 child deaths annually.

38.  Nutrition
 Mission Poshan 2.0 to be launched:
 To strengthen nutritional content, delivery, outreach, and outcome.
 Merging the Supplementary Nutrition Programme and the Poshan
Abhiyan.
 Universal Coverage of Water Supply
 Rs. 2,87,000 crore (US$ 39.36 billion) over 5 years for Jal Jeevan Mission
(Urban) - to be launched with an aim to provide:
 2.86 crore household tap connections.
 Universal water supply in all 4,378 Urban Local Bodies.
 Liquid waste management in 500 AMRUT cities.
 Scrapping Policy
 Voluntary vehicle scrapping policy to phase out old and unfit vehicles.
 Fitness tests in automated fitness centres:
 After 20 years in case of personal vehicles.
 After 15 years in case of commercial vehicles.

39. 2. Physical and Financial Capital and Infrastructure
 Production Linked Incentive scheme (PLI)
 Rs. 1.97 lakh crore (US$ 27.02 billion) in next 5 years for PLI schemes in
13 Sectors.
 To create and nurture manufacturing global champions for an
AatmaNirbhar Bharat.
 To help manufacturing companies become an integral part of global
supply chains, possess core competence and cutting-edge technology.
 Textiles
 Mega Investment Textiles Parks (MITRA) scheme, in addition to PLI:
 7 Textile Parks to be established over 3 years.
 Textile industry to become globally competitive, attract large investments
and boost employment generation & exports.
 Infrastructure
 National Infrastructure Pipeline (NIP) expanded to 7,400 projects:
 Around 217 projects worth Rs. 1.10 lakh crore (US$ 15.09 billion)
completed.
 Measures in three thrust areas to increase funding for NIP:
 Creation of institutional structures.
 Big thrust on monetizing assets.

40.  Roads and Highways Infrastructure
 Rs. 1,18,101 crore (US$ 16.20 billion), highest ever outlay, for Ministry of Road
Transport and Highways – of which Rs. 1,08,230 crore (US$ 14.84 billion) is for
capital.
 Under the Rs. 5.35 lakh crore (US$ 73.37 billion) Bharatmala Pariyojana, more
than 13,000 km length of roads worth Rs. 3.3 lakh crore (US$ 45.26 billion)
awarded for construction:
 3,800 km have already been constructed.
 Another 8,500 km to be awarded for construction by March 2022.
 Additional 11,000 km of national highway corridors to be completed by March
2022.
 Railway Infrastructure
 Rs. 1,10,055 crore (US$ 15.09 billion) for Railways of which Rs. 1,07,100 crore
(US$ 14.69 billion) is for capital expenditure.
 National Rail Plan for India (2030): to create a ‘future ready’ Railway system by
2030
 100% electrification of Broad-Gauge routes to be completed by December 2023.
 Broad Gauge Route Kilometres (RKM) electrification to reach 46,000 RKM, i.e.
72% by end of 2021.
 Western Dedicated Freight Corridor (DFC) and Eastern DFC to be commissioned
by June 2022, to bring down the logistic costs – enabling Make in India strategy.

41.  Urban Infrastructure
 Raising the share of public transport in urban areas by expansion of metro rail network and
augmentation of city bus service.
 Rs. 18,000 crore (US$ 2.47 billion) for a new scheme, to augment public bus transport:
 Innovative PPP models to run more than 20,000 buses.
 To boost automobile sector, provide fillip to economic growth, create employment opportunities
for our youth.
 Power Infrastructure
 139 Giga Watts of installed capacity and 1.41 lakh circuit km of transmission lines added, and
additional 2.8 crore households connected in past 6 years.
 Consumers to have alternatives to choose the Distribution Company for enhancing competitiveness.
 Rs. 3,05,984 crore over 5 years for a revamped, reforms-based, and result-linked new power
distribution sector scheme.
 A comprehensive National Hydrogen Energy Mission 2021-22 to be launched.
 Ports, Shipping, Waterways
 Rs. 2,000 crore (US$ 274.29 million) worth 7 projects to be offered in PPP-mode in FY21-22 for
operation of major ports.
 Indian shipping companies to get Rs. 1624 crore (US$ 222.72 million) worth subsidy support over 5
years in global tenders of Ministries and CPSEs.
 Petroleum & Natural Gas
 Extension of Ujjwala Scheme to cover 1 crore more beneficiaries.
 To add 100 more districts to the City Gas Distribution network in next 3 years.
 A new gas pipeline project in J&K.

42.  Increasing FDI in Insurance Sector
 To increase the permissible FDI limit from 49% to 74% and allow foreign ownership
and control with safeguards.
 Recapitalization of PSBs
 Rs. 20,000 crore (US$ 2.74 billion) in 2021-22 to further consolidate the financial
capacity of PSBs.
3. Inclusive Development for Aspirational India
 Agriculture
 Ensured MSP at minimum 1.5 times the cost of production across all commodities.
 SWAMITVA Scheme to be extended to all States/UTs, 1.80 lakh property-owners in
1,241 villages have already been provided cards.
 Agricultural credit target enhanced to Rs. 16.5 lakh crore (US$ 226.29 billion) in FY22 -
animal husbandry, dairy, and fisheries to be the focus areas.
 Fisheries
 Investments to develop modern fishing harbours and fish landing centres – both
marine and inland.
 5 major fishing harbours – Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat to
be developed as hubs of economic activity.
 Migrant Workers and Labourers
 One Nation One Ration Card scheme for beneficiaries to claim rations anywhere in
the country - migrant workers to benefit the most.
 Scheme implementation so far covered 86% of beneficiaries across 32 States and UTs.

43.  Financial Inclusion
 Under Stand Up India Scheme for SCs, STs and women,
 Margin money requirement reduced to 15%.
 To also include loans for allied agricultural activities.
 Rs. 15,700 crore budget allocation to MSME Sector, more than double of this
year’s BE.
4. Reinvigorating Human Capital
 School Education
 15,000 schools to be strengthened by implementing all NEP components.
Shall act as exemplar schools in their regions for mentoring others.
 100 new Sainik Schools to be set up in partnership with NGOs/private
schools/states.
 Higher Education
 Creation of formal umbrella structure to cover all Govt. colleges,
universities, research institutions in a city for greater synergy.
 Skilling
 Rs. 3000 crore for realignment of existing National Apprenticeship Training
Scheme (NATS) towards post-education apprenticeship, training of
graduates and diploma holders in Engineering.

44. 5. Innovation and R&D
 National Language Translation Mission (NTLM) to make governance-and-
policy related knowledge available in major Indian languages.
 PSLV-CS51 to be launched by New Space India Limited (NSIL) carrying
Brazil’s Amazonia Satellite and some Indian satellites.
 As part of the Gaganyaan mission activities:
 4 Indian astronauts being trained on Generic Space Flight aspects, in
Russia
 First unmanned launch is slated for December 2021.
 Rs. 4,000 crore over five years for Deep Ocean Mission survey exploration
and conservation of deep-sea biodiversity.
6. Minimum Government, Maximum Governance
 Rs. 3,768 crore allocated for first digital census in the history of India.
 Rs. 300 crore grant to the Government of Goa for the diamond jubilee
celebrations of the state’s liberation from Portuguese.
 Rs. 1,000 crore for the welfare of Tea workers especially women and
their children in Assam and West Bengal through a special scheme.

45. Direct Taxes
Achievements:
 Corporate tax rate slashed to make it among the lowest in the world.
 Burden of taxation on small taxpayers eased by increasing rebates.
 Return filers almost doubled to 6.48 crore in 2020 from 3.31 crore in 2014.
 Faceless Assessment and Faceless Appeal introduced.
 Relief to Senior Citizens:
 Exemption from filing tax returns for senior citizens over 75 years of age and
having only pension and interest income; tax to be deducted by paying bank.
 Reducing Disputes, Simplifying Settlement:
 Time limit for re-opening cases reduced to 3 years from 6 years.
 National Faceless Income Tax Appellate Tribunal Centre to be established.
 Relaxation to NRIs:
 Rules to be notified for removing hardships faced by NRIs regarding their
foreign retirement accounts.
 Incentivising Digital Economy:
 Limit of turnover for tax audit increased to Rs. 10 crore (US$ 1.37 million)
from Rs. 5 crore (US$ 685.72 thousand) for entities carrying out 95%
transactions digitally.

46.  Relief for Dividend:
 Dividend payment to REIT/ InvIT exempt from TDS.
 Advance tax liability on dividend income only after declaration/ payment of
dividend.
 Deduction of tax on dividend income at lower treaty rate for Foreign Portfolio
Investors.
 Attracting Foreign Investment for Infrastructure:
 Infrastructure Debt Funds made eligible to raise funds by issuing Zero Coupon
Bonds.
 Relaxation of some conditions relating to prohibition on private funding,
restriction on commercial activities, and direct investment.
 Supporting ‘Housing for All’:
 Additional deduction of interest, up to Rs. 1.5 lakh (US$ 2.06 thousand), for loan
taken to buy an affordable house extended for loans taken till March 2022.
 Tax holiday for Affordable Housing projects extended till March 2022.
 Tax exemption allowed for notified Affordable Rental Housing Projects.
 Tax incentives to IFSC in GIFT City:
 Tax holiday for capital gains from incomes of aircraft leasing companies.
 Tax exemptions for aircraft lease rentals paid to foreign lessors.
 Tax incentive for relocating foreign funds in the IFSC.
 Tax exemption to investment division of foreign banks located in IFSC.

47.  Ease of Filing Taxes:
 Details of capital gains from listed securities, dividend income, interest from banks, etc. to
be pre-filled in returns.
 Relief to Small Trusts:
 Exemption limit of annual receipt revised from Rs. 1 crore (US$ 137.14 thousand) to Rs. 5
crore (US$ 685.72 thousand) for small charitable trusts running schools and hospitals.
 Electronic and Mobile Phone Industry:
 Some exemptions on parts of chargers and sub-parts of mobiles withdrawn
 Duty on some parts of mobiles revised to 2.5% from ‘nil’ rate.
 Iron and Steel:
 Customs duty reduced uniformly to 7.5% on semis, flat, and long products of non-alloy,
alloy, and stainless steels.
 Duty on steel scrap exempted up to March 31, 2022.
 Anti-Dumping Duty (ADD) and Counter-Veiling Duty (CVD) revoked on certain steel
products.
 Duty on copper scrap reduced from 5% to 2.5%.
 Textiles:
 Basic Customs Duty (BCD) on caprolactam, nylon chips and nylon fiber & yarn reduced to
5%.
 Chemicals:
 Calibrated customs duty rates on chemicals to encourage domestic value addition and to
remove inversions.
 Duty on Naptha reduced to 2.5%.

48.  Renewable Energy:
 Phased manufacturing plan for solar cells and solar panels to be notified.
 Duty on solar invertors raised from 5% to 20%, and on solar lanterns from 5% to 15% to
encourage domestic production.
 Capital Equipment:
 Tunnel boring machine to now attract a customs duty of 7.5%; and its parts a duty of 2.5%.
 Duty on certain auto parts increased to general rate of 15%.
 MSME Products:
 Duty on steel screws and plastic builder wares increased to 15%.
 Prawn feed to attract customs duty of 15% from earlier rate of 5%.
 Exemption on import of duty-free items rationalized to incentivize exporters of garments,
leather, and handicraft items.
 Exemption on imports of certain kind of leathers withdrawn.
 Customs duty on finished synthetic gemstones raised to encourage domestic processing.
 Agriculture Products:
 Customs duty on cotton increased from nil to 10% and on raw silk and silk yarn from 10%
to 15%.
 Withdrawal of end-use based concession on denatured ethyl alcohol.
 Agriculture Infrastructure and Development Cess (AIDC) on a small number of items.
 Rationalization of Procedures and Easing of Compliance:
 Turant Customs initiative, a Faceless, Paperless, and Contactless Customs measures.
 New procedure for administration of Rules of Origin.
Note: Conversion rate used as on February 1, 2021 is Rs. 1 = US$ 0.014