INDIAN SCHOOL OF BUSINESS VOL 1

Gurukul
by CAS
(in collaboration with CAC)
AUG 2019

Union Budget 2019

Highlights
Significant opening of various sectors for foreign investment Content
route and revamping corporate debt route.
Stock exchange separate for social impact ventures to raise
01 Union Budget
funds.
FPI to be allowed in Insurance Intermediaries.
Highlights
Water ways to be significantly enhanced with Ganga to handle 4 02 Economic
times for freight than last year. Performance
2% interest subvention for GST registered MSME. Details to
03 Key Policy
follow.
Labour laws to be streamlined and merged into 4 codes with Announcements
standardized definitions and litigations. 04 Tax Proposals
Govt will change policy of 51% government stake in PSUs, to 51%
stake, inclusive of stake held by government-controlled entities.
Tax on 2cr. to 5cr. income will have be like 3% more tax (if was 30
will be 33 etc). More than 5 cr. = 7% more.
Petrol and diesel to cost more by Rs. 2 a liter.
FM says, custom duty on gold and other precious metals
increased to 12.5% from 10%.
Pre-GST regime litigations – Legacy dispute regulations scheme
to allow quick closure of the litigations.
Affordable housing – Tax holiday on profits earned by developers
already existing. Further impetus additional deduction of Rs. 1.50
lacs on interest paid for funds borrowed till 31st March 2020 for
an affordable house upto Rs. 45 lacs.

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Source: CII
Economic Survey 2019
Highlights
Survey sees FY20 GDP growth at 7%, higher Survey argues that nudging behavior change is
growth on stables macros.  simplest way to solve many issues. Top
India needs to grow at 8% per year to be $5 policymakers must ensure actions are
trillion economy by FY25. predictable. Policymaking needs: 1. Clear Vision
Survey suggests diplomatic type privileges, 2. Strategic blueprint 3. Tactical tools for
naming roads for top taxpayers constant recalibration 
It recommends a renewed focus on pushing up A minimum wage policy for bottom rung of
exports.  wage earners to drive up demand and
Govt should foster the growth of large firms strengthening the middle class. 
instead of focusing on smaller firms.  Indian MSMEs need to be freed from shackles
Use public data to revolutionise development that convert them into dwarfs. MSMEs need to
in the country. be seen as a source of innovation, growth and
Looking beyond the economics of equilibrium, job creation
survey makes case for investment-driven Policy should enable MSMEs to grow, create
“virtuous cycle” to sustain growth at 8%. greater profits for their owners and contribute
Investment the "key driver" of simultaneous to job creation and productivity in the
growth in demand, jobs, exports & productivity  economy. 
Green shoots in investment activity seems to India needs to increase per capita energy
taking hold.  consumption to raise real per capita GDP by
Use public data to revolutionise development US$ 5000 and improve its HDI ranking. 
in the country. The Survey is inspired by Gandhiji's Talisman: “…
Looking beyond the economics of equilibrium, Recall the face of the poorest man [woman],
survey makes case for investment-driven and ask yourself, if the step you contemplate is
“virtuous cycle” to sustain growth at 8%. going to be of any use to him [her]. 
Investment the "key driver" of simultaneous India will enjoy the “demographic dividend”
growth in demand, jobs, exports & productivity  phase in the next two decades but some states
Green shoots in investment activity seems to will start transitioning to an ageing society by
taking hold.  the 2030s. 
Rural wage growth started increasing since Oil prices seen declining in FY20 
mid-2018.  The Survey visualises creating a Detroit for
Political stability should push the animal Electric Vehicles in India. 
spirits of economy.  Ease labour laws to spur job growth. 
Poor enforcement of contracts and dispute NBFC stress reason for FY19 slowdown. 
resolution is a big hurdle. Faster legal process Decline in NPAs should push up CAPEX cycle. 
should be top priority.  General fiscal deficit seen at 5.8% in FY19 VS
Savings & growth are positively co-related. 6.4% in FY18. 
Savings must increase more than investment.  Accommodative MPC policy to help cut real
Constant recalibration based on real time data. lending rates. 
Data must be created as a public good “of the Govt stands by the fiscal consolidation path. 
people, by the people, for the people. Jan-March economic slowdown due to poll
Success of MGNREGS shows govt schemes can related related activity. 
make a difference on the ground with skillful Greenshoots in investment seems to be taking
use of technology hold.

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Source: CII
Key Policies 2019
Highlights
Metro rail projects worth 300 KM is approved
in FY 18-19 and 210KM in FY20.
Hints at Aircraft financing through government
intervention and make India an aviation
maintenance hub.
we have an all India transport card for tolls,
bus tickets etc. Plus Rupay for retail debit
transactions
Pension benefits will be offered to 3 crore shop
owners with annual turnover of less than Rs 1.5
crore under new scheme
Waterways to have a greater play in logistics
PPP model for railways to be adopted.
One nation one grid for the nation to ensure
proper availability of power to every segment.
Massive push for infrastructure and logistics
throughout the year,
Rental laws to be completely revamped and a
model tenancy law to be drafted.
Innovative instrument to ensure affordable
housing
Introduce 1 cr loan through online portal in 59
min.
2% subvention for all GST registered MSME.
Online platform for submission and processing
of MSME bills in government offices.
Proposed to allow FII in few debt funds. Policy
to be made for this.
FM proposes a 'social stock exchange' to list
social organizations and NGOs.
FPI in media, insurance, aviation and others.
100% foreign direct Insurance intermediaries.
FM says, 7 crore new LPG connections have
been provided by NDA government.
New scheme, 'Pradhan Mantri Matsya Sampada
Yojana' for fisheries sector launched, with aim
to modernize sector and increase efficiency.
PM Gram sadak Yojna to be enhanced and all
connectivity achieved 3 years before target
date.
FM says, 1.95 crore new houses will be built by
government for citizens in next three years.
Source: CII
1.25 lac Km of road to be revamped with
estimated cost of 80,000 crores of budget
under rural roads revamping scheme.
Special incentive for cattle feed and dairy and
develops the farmers as manufacturers.
9.6 crore toilets have been constructed under
swachh bharat abhiyan.
FM says, ensuring water security is priority for
govt. Has integrated several government
departments, to focus work in this sector.
Proposes 'Har Ghar Jal' mission to ensure
supply water to all rural houses.
FM says, has discussed with SEBI to reduce
minimum public shareholding in listed
companies to 25% from 35% current.
Railways to invest in urban transport systems to
ensure commuters hassle free commute.
New national education policy to be
formulated and tabled with changes in school
and higher education.
New program to “study in India” with a focus on
foreign students to study in India.
Focus on new age skills such as AI, 3D Printing,
VR and robotics under skill India with higher
remuneration.
Proposing streamline multiple labor laws into a
set of 4 labor codes to ensure standardize law.
New TV channel for startups to be run by
startups and have cross segment impact.
Railways station modernization to be launched
this year.
Every woman SHG member having a Jandhan
account would be allowed 5000 overdraft
account. Loan of 1 lac under the udra scheme
to one woman under each SHG.
Aadhar card for NRI with Indian passports after
arrival in India.
17 Iconic tourism sites in India to be renovated
with modern amenities.
70,000 crores to be provided to PSB to boost
credit.
NBFC pooled assets sold for 100,000 cr. -> Govt
will do partial credit guarantee.
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Tax Proposals 2019
Highlights
INDIRECT TAX:
Simplified single monthly return to be rolled
out.
Taxpayers with less than 5 crore turnover to file
single quarterly returns.
Electronic invoice system to be made online to
eliminate compilation of return and also
remove -E-way bill. Targeted to initiate from
January 2020.
Import of defense equipment not
manufactured in India exempted from BCD.
BCD increased on certain segments such as
optical cable, CCTV, Ip Camera, DVR, Vinyl
flooring, Marble slabs, synthetic rubber, auto
parts.
5% BCD on imported books.
BCD exempted on capital goods used on
manufacture on specified electronic goods.
Petrol and diesel to cost more by Rs. 2 a liter.
FM says, custom duty on gold and other
precious metals increased to 12.5% from 10%.
Pre-GST regime litigations – Legacy dispute
regulations scheme to allow quick closure of
the litigations
DIRECT TAX:
Corporate tax to continue with phased
reduction. Annual turnover of companies upto
400 crore to have 25% Income tax.
Mega manufacturing plants such as
photovoltaic, solar electric charges, Computer
servers, laptops and provide incentive linked
incentive deductions.
Electric vehicles – India to be global hub. To
Lower GST rate on electric vehicle from 12 to
5%. Additional Income tax deduction of 1.5 lacs
of rupees on interest paid on loans taken for
purchase.
Source: CII
Startups – Angel tax issue to be addressed. Will
not be subjected to any type of scrutiny for
share premium for investor or the companies.
The funds raised by startups will not require
any scrutiny from Income tax department.
Category II investment funds not be subjected
to Sec 56(vii) valuation.
Carry forward and set off losses for Startups to
be tweaked.
Affordable housing – Tax holiday on profits
earned by developers already existing. Further
impetus additional deduction of Rs. 1.50 lacs on
interest paid for funds borrowed till 31st March
2020 for an affordable house upto Rs. 45 lacs.
NBFC – Interest on bad and doubtful debts to
be taxed on amount being received from NPA’s.
STT – Restricting to only the difference between
strike and transaction price.
Interchangeability of PAN and Aadhar to use
either.
Prefilled tax returns would be made available
with everything available with government to
help file.
E-Assessment – To be ensure there is no
harassment and to be enforced strongly. Cases
selected to scrutiny to have issued randomly
without disclosing the name or location of the
AO.
Digital payments – TDS 2% on cash withdrawal
from bank account in a year exceeding Rs. 1
crore.
BHIM UPI and other NEFT/RTGS to be
promoted. Propose with annual turnover
exceeding 50crore and no charge rates for
using these applications on customers or the
merchants.
Tax on 2cr. to 5cr. income will have be like 3%
more tax (if was 30 will be 33 etc). More than 5
cr. = 7% more
Launching of prosecution to be made more be
strong with lower limits to initiate the same.
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