EAB MODULE 2

MODULE II

• Syllabus: Nature and progress of economic reforms, Monetary and

fiscal policies, Export Import Policies, Competition Act 2002, Foreign
Exchange Management Act- Industrial policy of India- Make in India-
Startups-Mudra Bank- Digital India-Skill India.
 ECONOMIC REFORMS

• Economic reforms refer to the fundamental changes that were launched in

1991 with the plan of liberalising the economy and quickening its rate of
economic growth.
• The reforms intended at bringing in larger cooperation of the private sector in
the growth of the Indian economy. Policy changes were proposed with regard
to technology up-gradation, industrial licensing, removal of restrictions on the
private sector, foreign investments, and foreign trade.
Nature And Progress Of Economic Reforms.

• 3 pillars of economic reforms are known as L P G (Liberalization,

Privatization and Globalization)
Liberalization:
It is the process of liberalizing the economy from the various regulatory
and control mechanisms and giving greater freedom to private
enterprises.
It has taken place in almost all the major sectors of the economy including
industry and services, infrastructure, banking, taxation, FDI etc.
 Features/ Nature Of Liberalization

• De licensing
• Ease of location requirements and fast government clearance
• Increase in the investment ceiling of small scale enterprises
❑liberalization of tax provision
❑Liberalization in FDI
❑Ease of technology transfer
• Permission to corporate for buyback of shares( Eg. Reliance)
• Corporatization of PSUs ( Eg. PSU oil companies)
Features/ Nature Of Liberalization…. Contd…

• Freedom to banks to enter the insurance sector

• Private sector entered into infrastructure development of the country
• Freedom to transfer licenses
• Removal of restriction on movement of products
• Sale and purchase of assets
• Simplification of tax rate structure and procedures ( now, GST)
• Tax exemptions and concessions.
PRIVATIZATION

• Privatization : Privatization is not merely the transfer of

ownership of government owned assets into private hands.
• Major economic decisions concerning investments,
production , distribution and consumption of goods and
services etc. are determined by the governments policy on
privatization.
 Features/ Nature Of Privatization

• Divestment: It refers to the sale of Govt. equity in full or part, also known as disinvestment
• Latest example is, govt of India is now planning to privatize BPCL, by selling out its 52.3% of shares. AIR
INDIA is sold to ( privatized ) Tata recently. ITDC,BEML etc are also going to be pravitaized. Thejas
express is an example of private train service run by IRCTC, a subsidiary of Indian railway.
• Allowing private sector companies to perform the services provided only by the public sector and
government withdrawal from several businesses. Eg. Opening of a number of core sectors earlier
reserved for public sector to private investment, such as roads, ports, banks, insurance, power,
telecom…etc.
GLOBALIZATION

• Globalization :The IMF defines globalization as growing economic

interdependence of countries world wide through increasing volume
and verity of cross border transactions in goods and services and of
international capital flows and also through the more rapid
widespread diffusion of technology.
Features/ Nature Of Current Phase Of
Globalization
 Expansion of businesses throughout the world.
 Erasing the differences between domestic and foreign market
 Buying and selling goods and services from/to any countries in the world.
 Growth of online businesses
 Establishing manufacturing and distribution facilities in any part of the
world based on feasibility and viability rather than national consideration.
Features/ Nature Of Current Phase Of Globalization…
Contd..

 Product planning and development are based on the taste and

preference of each market.
 Sourcing of factors of production and inputs like raw materials,
machinery, finance, technology, human resources and managerial
skills from the entire world.
 Setting the mind and attitude to view the entire world as the single
market
 Features/ Nature Of Current Phase Of
Globalization… Contd…
• Growing global markets in products, services like banking, insurance and transportation. Global
consumer markets and global brands.
• Increased role of WTO, to administer and enforce multi lateral trade agreements
• Regional blocs ( Trade and economic association between the countries) gaining more importance.(
EU, ASEAN, USMCA (US, Mexico Canada Agreement, Former NAFTA), MERCOSUR Etc. ).The
South Asian Free Trade Area (SAFTA) is the free trade arrangement of the South Asian Association for
Regional Cooperation (SAARC).The agreement came into force in 2006, SAFTA signatory countries
are Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka
• More policy coordination groups such as G7, G20, OECD Etc.
Features Of Globalization Contd…

• Free import of large number of items and reduction or elimination of

quantitative restrictions (import quota) on A number of import items
and reduction in the import duty rates
• Increase in the limit of foreign direct investment in several industries
• Facilities and incentives for EOUs ( export oriented units) and SEZs
(special economic zone), setting up of export promotion board etc…
• Cultural exchange… etc
The Bad Side Of Globalization

The bad side of globalization is all about the new risks and uncertainties such as
…..
• high degree of integration of domestic and local markets,
• intensification of competition,
• high degree of imitation,
• price and profit swings,
• investment overflow and
• business and product damage.
What Is Monetary Policy?

• Monetary policy refers to the use of instruments under the control of the
RBI to regulate the availability, cost and use of money and credit.
The main objective of monetary policy is to achieve specific economic
goals, such as low and stable inflation and promoting growth.
• G.K. Shaw defines it as “any conscious action undertaken by the
monetary authorities to change the quantity, availability or cost of money.”
Monetary Policy…contd

• The Reserve Bank of India (RBI) is the central banking system of India and
controls the monetary policy of the rupee.The institution was established on 1
April 1935 and plays an important part in the development strategy of the
government.
What is Money market?
• Money market basically refers to financial instruments with high liquidity
and short-term maturities are traded. ... Money market consists of various
financial institutions and dealers, who seek to borrow or loan securities
Role of RBI

➢Monetary policy making ➢Banker to Banks

➢India’s monetary authority ➢Financial inclusion and development
➢Payment and settlement systems ➢Research, data and knowledge
➢Issuer of currency sharing

➢Manage foreign exchange reserves ➢Consumer education and protection

➢Banker and debt manager to
Government
Making of monetary policy

➢Monetary policy is communicated to the public by annual monetary

policy statement in April and the mid-term review in October.
➢RBI website is an effective medium of communication for the policy
changes
➢Governor, Deputy Governors, Committee of the Board meet every
week to review the monetary, economic and financial conditions
also hold Periodic consultations with Ministry of Finance
THE INSTRUMENTS OF MONETARY POLICY ARE
OF TWO TYPES:

1. Quantitative: (CRR, SLR, Open market operations, REPO rate, Reverse

repo rate, MSF etc)
2. Qualitative: Change In The Margin Money, Moral Suasion etc.
• These both methods affect the level of aggregate demand through the
supply of money, cost of money and availability of credit. They are meant
to regulate the overall level of credit in the economy through commercial
banks.
 Monetary policy(quantitative instruments)

• CRR- Banks in India are required to hold a certain proportion of their deposits in
the form of cash with the Reserve Bank of India. This minimum ratio is known as
the CRR or Cash Reserve Ratio.
• Repo and Reverse Repo rate- The interest rate at which RBI provides short-
term loans to commercial banks is called the Repo rate. The rate at which RBI
takes short-term credit from commercial banks is the Reverse Repo rate.
• SLR- The minimum percentage of deposits that the bank has to maintain in the
form of approved securities, gold or cash is known as Statutory Liquidity
Ratio.
 DISCUSSION QUESTION

Discuss the present rates of:

CRR ,SLR ,Repo and Reverse Repo, MSF, and SDF
M S F : MSF is the rate at which the banks are able to borrow in emergency, from RBI against the
approved government securities.
The Standing Deposit Facility (SDF): is the rate is the interest rate at which banks can deposit surplus
funds with the central bank (RBI). When the central bank raises the SDF rate, banks are more
inclined to deposit their excess funds with the central bank, reducing the money supply in the
market, and a lower SDF rate encourages banks to lend more and increases the money supply.
CRR-4.5%
SLR-18%,
REPO-6.25%
Reverse Repo-3.35%
MSF-6.75%
SDF-6.25% (as of October, 2023.)
Monetary Policy(qualitative Instruments)
• a) Change in Margin Money: Eg. When we are pledging Gold or Govt.
Security, what percentage of the actual market value is given to the
borrower? This percentage is fixed by the banks as per the directions
given by the RBI.
• b. Moral Suasion: – Moral Suasion refers to a method adopted by the
RBI to convince the commercial banks to advance credit in accordance
with the directions of the central bank in the economic interest of the
country.
Session Break
FISCAL POLICY

• To generate revenue and to incur expenditure, the government frames a policy called
budgetary policy or fiscal policy.
• Fiscal policy is the use of government spending and taxation to influence the economy.
Governments typically use fiscal policy to promote strong and sustainable growth and
reduce poverty
• In broad term, fiscal policy refers to "that segment of national economic policy which
is primarily concerned with the receipts and expenditure of central
government”.
MAIN OBJECTIVES OF FISCAL POLICY IN INDIA

• Employment Generation rate.

• Price Stability and Control of Inflation • Reducing the Deficit in the Balance of Payment
• Reduction in inequalities of Income and Wealth • Balanced Regional Development
• Efficient allocation of Financial Resources • Capital Formation and
• Development by effective Mobilization of • Development of Infrastructure
Resources
• Foreign Exchange Earnings, attracting FDI
• Increasing National Income and GDP growth
INSTRUMENTS OF FISCAL POLICY

• Budget ( surplus/deficit)
• Government expenditure
• Taxation
• Public debt (borrowings from the public, banks etc)
INSTRUMENTS OF FISCAL POLICY

1) Budget
• If income exceeds over the expenditure, it is known as the surplus and opposite situation is
known as deficit. The accumulated deficit over several years is referred to as the government
debt.

2) Government Expenditure includes :

• Government spending on the purchase of goods & services, for various sectors such as
agriculture, public welfare etc.
• Payment of wages and salaries of government servants
• Public investments such as infrastructural development.
INSTRUMENTS OF FISCAL POLICY

3) Taxation
Goods and Services Tax (GST) is an indirect tax which was introduced in India on 1 July 2017 .The
GST is governed by a GST Council and its Chairman is the Finance Minister of India. Under GST, goods
and services are taxed at the following rates, 0%, 5%, 12% ,18% and 28%.
0 % -Vegetables, egg, chicken etc
5% -edible oil, sugar,spices, tea, and coffee etc.
12%- chips, cheese, tinned food etc
18%- Hair oil, toothpaste and soaps etc
28%- Luxury items, AC and Refrigerators, cigarettes etc.
INSTRUMENTS OF FISCAL POLICY

4) Public debt
• Borrowings from the public by means of treasury bills and govt. bonds
• Borrowings from the central bank (ie, RBI)
• international organizations like World Bank & IMF
GST

• Keeping in mind the federal structure of India, there will be two components for GST ,
for all transactions within a State.
• Central GST (CGST) and State GST (SGST).
• The Central GST and the State GST would be levied simultaneously on every transaction
of supply of goods and services except on exempted goods and services
• In case of inter-State transactions, the Centre would levy and collect the Integrated
Goods and Services Tax (IGST)
GST REPLACES ALL THE FOLLOWING TAXES

• Central Excise Duty, • Entertainment Tax (other than the tax levied
by the local bodies), Central Sales Tax (levied
• Additional Excise Duty,
by the Centre and collected by the States),
• Service Tax,
• Octroi and Entry tax,
• Additional Customs Duty commonly known
• Purchase Tax,
as Countervailing Duty,
• Luxury tax, and
• Special Additional Duty of Customs.
• Taxes on lottery, betting and gambling
• State Value Added Tax/Sales Tax,
EXIM POLICY/ FOREIGN TRADE POLICY

• The government has notified the extension of the Foreign Trade Policy 2015-20 upto
to March 31, 2023 due the outbreak of Covid-19 and other reasons.
• The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and
Industry, is in the process of formulating the new Foreign Trade Policy (FTP), expected
to be rolled out in April 2023 and applicable for the succeeding five years.
WHAT IS EXPORT-IMPORT (EXIM) POLICY

• EXIM Policy (Foreign Trade Policy (FTP)) is essentially a set of guidelines for the import
and export of goods and services.
• These are established by the Directorate General of Foreign Trade(DGFT), the governing
body for the promotion and facilitation of exports and imports under the Ministry of
Commerce and Industry.
• The policy is notified for a period of five years. It is updated every year on March 31, and
the changes come into effect from April 1.
GENERAL OBJECTIVES OF EXIM POLICY

• Accelerating the country’s transition to a global, vibrant economy

• derive maximum benefits from expanding global market opportunities
• Stimulating sustainable economic growth
• Enhancing the technological efficiency
• Encouraging internationally accepted standards of quality
• Generate employment
• Providing consumers with good quality products and services at reasonable prices.
FOREIGN TRADE POLICY 2023

Highlights of the policy

• The Key Approach to the policy is based on these 4 pillars: (i) Incentive to Remission, (ii)
Export promotion through collaboration - Exporters, States, Districts, Indian Missions,
(iii) Ease of doing business, reduction in transaction cost (iv) Emerging Areas – E-
Commerce Developing Districts as Export Hubs and streamlining SCOMET policy.
HIGHLIGHTS OF THE POLICY

• Amnesty Scheme under the FTP 2023 to address default on Export

Obligations.This scheme is intended to provide relief to exporters who have been
unable to meet their obligations under EPCG.
• The FTP 2023 encourages recognition of new towns through “Towns of
Export Excellence Scheme” and exporters through “Status Holder Scheme”.
HIGHLIGHTS OF THE POLICY

• Four new towns, namely Faridabad, Mirzapur, Moradabad, and Varanasi, have been
designated as Towns of Export Excellence (TEE) in addition to the existing 39 towns.The
TEEs will have priority access to export promotion funds . This addition is expected to
boost the exports of handlooms, handicrafts, and carpets
• Status holders (those firms who are excelled in exports) would be
encouraged to provide trade-related training based on a model curriculum to
interested individuals.This will help India build a skilled manpower pool.
HIGHLIGHTS OF THE POLICY

• Promoting export from the districts: The FTP aims at building partnerships with
State governments and taking forward the Districts as Export Hubs (DEH) initiative to
promote exports at the district level.
• There is a wider outreach and understanding of SCOMET (Special Chemicals,
Organisms, Materials, Equipment and Technologies) for facilitating exports of controlled
items from India.
HIGHLIGHTS OF THE POLICY

Extensive outreach and training activities will be taken up to build capacity of artisans,
weavers, garment manufacturers, gems and jewellery designers to onboard them on E-
Commerce platforms and facilitate higher exports
• Facilitation under Export Promotion of Capital Goods (EPCG) Scheme
The EPCG Scheme, which allows import of capital goods at zero Customs duty for export
production, is being further continued.
• Advance authorisation Scheme provides duty-free import of raw materials for
manufacturing export items will be continued
EXPORT PROMOTION MEASURES

• Policy measures ( liberalized policies )

• Institutional set up ( for assisting exports, eg EXIM Bank )
• Import Facilitation for Export Production
• Subsidies
• Fiscal Incentives ( tax relaxation etc )
• Foreign Exchange Facilities
• Export incentives
• Promotion of Export Production Units ( EPU)
COMPETITION ACT

 Economic enterprises compete with other firms and in the process sometimes
eliminate rivals.
 Competition policy refers the government policy to ensure fair competition
by removing / preventing factors and forces that are against to fair
competition.
 The Act seeks to provide the legal framework and tools to ensure
competition policies are met, to prevent anti-competition practices and
provide for the penalisation of such acts. The Act protects free and fair
competition which protects the freedom of trade.
COMPETITION ACT 2002.

• The Monopolistic and Restrictive Trade Practices ( MRTP) Act 1969, was not
enough to tackle the competition aspects of the Indian economy.The Act was criticized
in the ground that it prevents industrial growth and fails to protect the interest
of the consumers.
• Hence need arouse for a new Act, shifting the focus from restricting monopolies to
encouraging companies to invest and grow, thereby promoting competition
while preventing any abuse of the market power.Thus new competition Act 2002,
was enacted in 2003.
BENEFITS OF FAIR COMPETITION

• Promotes efficiency
• Encourages innovation
• Punishes the laggards
• Facilitates better governance
• Ensures availability of goods in abundance of acceptable
quality at affordable price.
COMPETITION ACT 2002,OBJECTIVES

• To prevent practices having adverse effect on competition

• To promote and sustain competition in markets
• Encourage more investments in business
• To protect the interest of consumers;
• To ensure freedom of trade
MAIN PROVISIONS (FEATURES) OF THE ACT

1. Prohibits anti- competitive agreements

2. Prohibits abuse of dominant position
3. Regulate mergers and acquisitions of large corporations
4. Advocacy and Awareness
MAIN PROVISIONS (FEATURES) OF THE ACT

1. Prohibits Anti- competitive agreements: Such as agreement in respect of production, storage , supply, acquisition or control of goods
or services, refusal to deal etc. which causes adverse effect on competition. ( also knows as Cartels ). See the news given below

BUSINESS LINE MUMBAI, JULY 25, 2018

Competition panel had fined them over cartelization charges

• Competition Commission of India’s (CCI) decided to impose Rs.6,700-crore penalty

on 11 cement companies for cartelization. The verdict by the appellate tribunal
comes two years after the CCI imposed the penalty. The Builders’ Association of
India filed the petition in August 2016 against 11 leading cement companies. The CCI
had also asked the cement companies to discontinue from reducing production.
Leading companies such as Ultra tech, Ambuja, JK, Ramco etc were involved
MAIN PROVISIONS (FEATURES) OF THE ACT

2. Abuse of dominant position: Dominant position means a position of strength enjoyed

by an enterprise.
• This dominant position may be misused in terms of
conditions in purchase, prices kept at very low and other unfair practices in the market.
MAIN PROVISIONS (FEATURES) OF THE ACT

3. Regulate mergers and acquisitions (M&A): The Act provides regulation on M&A,
which causes or likely to cause an adverse effect on competition. In such case, the CCI
has even the power to reverse the mergers.
• Eg. Times of India,Aug 9, 2018
NEW DELHI:The Competition Commission of India (CCI) on Wednesday cleared the
proposed acquisition of e-tailer Flipkart by global retailer Walmart.The Walmart had
announced that it would acquire 77 per cent stake in Flipkart for $16 billion.
MAIN PROVISIONS (FEATURES) OF THE ACT

4. Advocacy and Awareness:The Act emphasizes advocacy and creating awareness

about competition policy and law. It aims to educate businesses, stakeholders, and the
public about the benefits of fair competition.

• Competition advocacy has two dimensions, create increased public understanding and
acceptance of competition principles, and the second is, about the advisory role of the
Commission.
FOREIGN EXCHANGE MANAGEMENT ACT.

• When a business enterprise imports goods from other countries, exports its products or
makes investments abroad, it deals in foreign exchange.
• Foreign exchange is also known as FOREX, is the conversion of one country’s currency
into another.
• The value of any particular currency is determined by market forces related to trade,
investment, and political and other types of risks.
FERA AND FEMA

• FERA – Foreign Exchange Regulation Act 1973,had become

incompatible with the post- liberalization policies, and was
replaced by Foreign Exchange Management Act ( FEMA) in
1999.
• The rules, regulations and norms pertaining to the Act are
laid down by the Reserve Bank of India. FEMA Head office
is known as Enforcement Directorate (ED),located in Delhi
 FEMA – OBJECTIVES

➢The (Foreign Exchange Management Act, 1999) (FEMA) is an Act "to consolidate
and amend the law relating to foreign exchange with the objectives of:
(1) facilitating external trade & payments and
(2) for promoting the orderly development and maintenance of foreign exchange
market in India
FEMA- MAIN FEATURES / HIGHLIGHTS

➢The Act is applicable to Citizens/Residents of whole India, and the offices

and agencies located outside India but, owned or managed by an Indian
citizen.
➢A person lived in India for 182 days in the preceding FY will be given the
residential status.
➢FEMA is concerned with management of FOREX rather than regulations
and control
➢Any kind of violation under this Act is liable to a civil offence.
MAIN FEATURES / HIGHLIGHTS

• It restricts the Forex transactions– all the transactions should be

made only through an Authorized person.( Authorized by RBI)
Eg. Unimoney, Western Money Transfer etc.
• FEMA permits transactions involving current account for external
trade which no longer required RBI’s permission. Allows remittance
for living expenses of parents, spouse, and children residing abroad,
expenses of foreign travel, education, medical care etc.
MAIN FEATURES / HIGHLIGHTS

• Capital account transactions ( Such as Immovable properties)

are subject to a number of restrictions. Residents of India will be
permitted to carry out transactions in capital accounts, such
as foreign security or immovable property abroad if the security
or property was owned or acquired when he/she was living
outside India, or it was inherited by him/her from someone living
outside India.
MAIN FEATURES / HIGHLIGHTS

• A person resident in India to whom any foreign exchange is due

is obligated to take reasonable steps to realise and repatriate to
India such foreign exchange unless an exemption has been
provided
INDUSTRIAL POLICY OF INDIA

• Industrial policy means rules, regulations , principles , policies , and procedures laid down
by government for regulating , developing and controlling industrial undertakings in the
country.
• It prescribes the respective roles of the public, private joint and cooperative sectors for
the development of industries. It also indicates the role of the large , medium , and small
sector .
• It incorporates fiscal and monetary policies, tariff policy , labor policy and the
government attitude towards foreign capital, and role to be played by multinational
corporations in the development of the industrial sector.
• Major Industrial policy • 1973
resolutions were introduced in • 1977
the following years.
• 1980
• 1948
• 1991
• 1956
1991 INDUSTRIAL POLICY OBJECTIVES

• Encouragement to Indian entrepreneurship

• increasing productivity
• employment generation
• Removing/liberalizing the regulatory system and other barriers of industrial
development
• Increasing the competitiveness of industries for the benefit of the common man
• Provide enhanced support to the small scale sector
1991 INDUSTRIAL POLICY OBJECTIVES

• Promote Industrialization of backward areas

• Ensure smooth running of public sector undertakings, and cut their losses
• Development of indigenous technology through greater investment in
R&D and bringing in new technology to help Indian manufacturing units
attain world standards
• Protect the interest of workers
1991 INDUSTRIAL POLICY OBJECTIVES

• Abolish the monopoly of any sector in any field of manufacture

except on strategic or security grounds
• To link Indian economy to the global market so that we acquire
the ability to pay for imports and to make us less dependent on
aid.
HIGHLIGHTS OF THE POLICY

• De reservation of industries for the • Encouragement to foreign investment

public sector • Ease of availing foreign technology
• De licensing • Encouraging policy changes in small
• Removal of mandatory convertibility scale industry
clause ( provision that can be found on • Incentive for the Industrialization of
some bonds allowing the bondholder backward areas
to exchange their debt into common
stock)
• Amendment of monopolies restrictive
trade practices( MRTP)
MERITS AND DEMERITS OF 1991 POLICY

MERITS LIMITATIONS
• Competitive industry • Not much devt. to backward areas
• Freedom to entrepreneurs • Solutions for sickness of PSU not effective
• Liberalization • Reduction in the expected foreign
investment
• Better performance of govt undertaking
• Surrender to IMF
❑Integration with world economy
❑Open economy
 MAKE IN INDIA

➢ The Make in India initiative was launched by Prime

Minister in September 2014 as part of the nation-
building initiatives.

The Make in India program includes major new

initiatives designed to:
facilitate investment,
foster innovation,
protect intellectual property, and
build best-in-class manufacturing
infrastructure.
 OBJECTIVE

The main aim of this initiatives are

❑to transform India into a and best-in-class
manufacturing hub
❑Creating 100 million jobs over the next decade
❑zero defect products and zero environmental impact
 STRATEGIES
➢Inspire confidence in India’s capabilities in several
sectors among foreign countries and citizens.
➢ Provide vast amount of technical information on 25
industrial sectors.

➢Reach out to a vast local and global audience via social

media and constantly keep them updated about
opportunities.
 Sectors reserved for the Scheme

▪ Automobiles
▪ Auto-components
▪ Aviation
▪ Biotechnology
▪ Chemicals
▪ Construction
▪ Defense
▪ Electrical machinery
▪ Electric systems
▪ Food processing
▪ It & business process management
▪ Leather
▪ Media and entertainment
▪ Mining
▪ Oil and gas
▪ Pharmaceuticals
▪ Ports
▪ Railways ( supporting services)
▪ Roads and highways
▪ Renewable energy
▪ Space
▪ Textiles
▪ Thermal power
▪ Tourism
▪ Wellness
 ACHIEVEMENTS

• Increase In Foreign Direct Investment

• India ranked top in the Rating of The World's Fastest Growing

Economies

• India ranked top Amongst The World's Topmost Investment

Destinations, Growth rate and Innovation Index.
• Ranked high by world bank, in ease of doing business
 ADVANTAGES

▪ Increased Job Opportunities

▪ Increase in GDP
▪ Increase in brand value
▪ Up gradation of technology
▪ Ease of starting business
▪ Development of rural areas
▪ Flow of capital
EXAMPLES

Huawei, Lenovo, Xavomi , Foxcon Etc. Are examples for some of the companies that made
use of the Make in India scheme.

Another example is, KIA motors ( Korea) project at Ananthapur,Andra pradesh, ….

started producing cars by mid of 2019.
DIGITAL INDIA -INTRODUCTION

➢Digital India is a campaign launched by the Govt. of India to ensure that Government
services are made available to citizens electronically by improving online
infrastructure and by increasing Internet connectivity or by making the
country digitally empowered in the field of technology.
➢It was launched by the Prime Minister of India Shri. Narendra Modi on 2 July 2015 - with
an objective of connecting rural areas with high-speed Internet networks and
improving digital literacy.
➢The initiative includes plans to connect rural areas with high speed
internet networks. Digital India consists of three core components.
These include:
• The creation of digital infrastructure
• Delivery of services digitally
• Digital empowerment of the citizens
START UP ACTION PLAN AND SUPPORTS

o REDUCE THE REGULATORY BURDEN ON STARTUPS

o CREATE A SINGLE POINT OF CONTACT FOR THE ENTIRE STARTUPS AND
ENABLE KNOWLEDGE EXCHANGE.
o LEGAL SUPPORT AND FAST-TRACKING PATENT EXAMINATION AT LOWER
COST TO PROMOTE AWARENESS, ADAPTATION AND PROTECTION OF IPRS.
o TO PROVIDE FUNDING SUPPORT FOR DEVELOPMENT AND GROWTH OF
INNOVATION DRIVEN ENTERPRISE.
oCREDIT GUARANTEE FOR STARTUPS
oTAX EXEMPTIONS
oINDUSTRY- ACADEMIA PARTNERSHIPS AND INCUBATION
SKILL INDIA….IMPROVE THE WORKERS INDUSTRY
RELATED SKILLS
INTRODUCTION

➢Skill India is an initiative of the government of India it was launched by

Prime Minister Narendra Modi on 15 th July 2015 with an aim to train over 40
crores people in India in different skills by 2022.

➢The initiatives include National Skill Development Mission, National Policy

for skill Development and Entrepreneurship 2015, Pradhan Mantri Kaushal
Vikas Yojana(PMKVY)scheme and the skill loan scheme.

➢Skill India is not just a programme but a movement. Here, youth who are
jobless, college and schools dropouts, along with the educated ones, from
rural and urban areas, all are given opportunities.
PMKVY (PRADHAN MANTRI KAUSHAL VIKAS
YOJANA )
• PMKVY is the flagship scheme of the Ministry of Skill Development & Entrepreneurship
(MSDE).
• The objective of this Skill Certification Scheme is to enable a large number of Indian
youth to take up industry-relevant skill training that will help them in securing a
better livelihood.
• Individuals skills will be assessed and awards are given to the best performers
• Under this Scheme,Training and Assessment fees are completely paid by the
Government.
FEATURES
➢Upgrade skills to international standards through significant industry
involvement and develop necessary frameworks for standards, curriculum
and quality assurance
➢The emphasis is to skill the youth in such a way so that they get
employment and also improve entrepreneurship.
➢Provides training, support and guidance for all occupations.
➢The Industrial Training Institutes (ITIs) also has been brought under Skill
India for garnering better results in vocational education and training.
➢The training programmes would be on the lines of international level so
that the youth of our country can not only meet the domestic demands but
also of other countries.
Mudra Bank
Micro Units Development and Refinance Agency ( MUDRA)
• A Public sector financial institution
• Provides loans at low rates to various institutions
• Provide credit to MSME
• Supervised by SIDBI
• Agency is responsible for developing and refinancing all
micro-enterprises .
 MUDRA Mission
“To create an inclusive , sustainable and
value based entrepreneurial culture, in
collaboration with our partner institutions in
achieving economic success and financial
security.”
FUNCTIONS / ROLES OF MUDRA LTD –

• The major role of MUDRA Ltd would be in refinancing and developing Micro
Enterprises.
• It will provide funds to Non-corporate small business sector.
• It will also partner with State/Regional level financial intermediaries to provide
finance to small/micro business enterprises.
 WHO ARE ENTITLE TO GET LOAN FROM MUDRA
LTD

• Non – Corporate Small Business • Food-service units

Segment (NCSBS) – comprising of
• Repair shops
millions of proprietorship / partnership
firms running as small manufacturing units. • Machine operators
• Service sector units • Micro industries

• Shopkeepers • Food processors etc..

• Fruits / vegetable vendors

AGENCIES THAT PROVIDE THE LOAN –

• All Public Sector Banks

• Regional Rural Banks (RRBs)
• Cooperative Banks
• Private Sector Banks
• Foreign Banks etc..