CSEET Business Environment, CA CS Harish Mathariya, YES Academy For CS, Pune

CSEET
BUSINESS
ENVIRONMENT
CA CS Harish Mathariya
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YES Academy
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CS Vikas Vohra CA CS Harish A. Mathariya
CS Vikas Vohra CA CS Harish A. Mathariya

Founders
INDEX
CS Executive Entrance Test (CS-EET)
S. No. Name of the Topic Page No.

6 Entrepreneurship Scenario 6.1 – 6.10
7 Business environment 7.1 – 7.12
8 Key Government Institutions 8.1 – 8.12
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Chapter 6: ENTRPRENEURSHIP SCENARIO
CHAPTER 6: ENTREPRENEURSHIP SCENARIO

GOVERNMENT INITIATIVES TO FOSTER ENTREPRENEURSHIP
Initiatives taken by the Government of India to strengthen entrepreneurship in India are as
under
1. Make in India:
Businesses from across the globe, and not merely the Americas, consider Make in India as a
breakthrough policy of the new India. The ‘Make in India’ programme was launched in
September 2014 soon after the ‘Modi’ Government came to power.
As a national programme, the Make in India initiatives is aimed at transforming India into a
global manufacturing hub, and contained a raft of proposals to attract investments from both
local and foreign corporate houses in 25 key areas it has identified, such as:
(a) Automobiles
(b) Chemicals
(c) Information Technology
(d) Pharmaceuticals
(e) Textiles
(f) Aviation
(g) Leather
(h) Tourism
(i) Hospitality
(j) Wellness
(k) Railways
(l) Infrastructure
With this scheme, the government has increased the FDI limit in various industries to attract
foreign investment and participation. It has established an investor facilitation centre to assist
foreign businesses locate partners and sites, while a slew of measures have been initiated for
domestic companies, which were revealed after Modi Government unveiled the ‘Stand Up India’
initiative in his Independence Day address in 2015.
2. Stand Up India:
The Stand up India scheme aims at promoting entrepreneurship among women and scheduled
castes and tribes. The scheme is anchored by Department of Financial Services (DFS), Ministry
of Finance, Government of India.
Stand-Up India Scheme facilitates bank loans between Rs 10 lakh and Rs 1 Crore to at least
one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and at least one woman borrower
per bank branch for setting up a Greenfield enterprise. This enterprise may be in manufacturing,
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services or the trading sector. In case of non-individual enterprises at least 51% of the
shareholding and controlling stake should be held by either an SC/ST or woman entrepreneur.
Eligibility
 SC/ST and/or woman entrepreneurs, above 18 years of age.
 Loans under the scheme are available for only green field project. Green field signifies,
in this context, the first time venture of the beneficiary in the manufacturing or services
or trading sector.
 In case of non-individual enterprises, 51% of the shareholding and controlling stake
should be held by either SC/ST and/or Women Entrepreneur.
 Borrower should not be in default to any bank/financial institution.
Loan details
 Nature of Loan - Composite loan (inclusive of term loan and working capital) between
10 lakh and upto 100 lakh.
 Purpose of Loan - For setting up a new enterprise in manufacturing, trading or services
sector by SC/ST/Women entrepreneur.
 Size of Loan - Composite loan of 75% of the project cost inclusive of term loan and
working capital. The stipulation of the loan being expected to cover 75% of the project
cost would not apply if the borrower’s contribution along with convergence support from
any other schemes exceeds 25% of the project cost.
 Interest Rate - The rate of interest would be lowest applicable rate of the bank for
that category (rating category) not to exceed (base rate (MCLR) + 3%+ tenor
premium).
 Security - Besides primary security, the loan may be secured by collateral security or
guarantee of Credit Guarantee Fund Scheme for Stand-Up India Loans (CGFSIL) as
decided by the banks.
 Repayment - The loan is repayable in 7 years with a maximum moratorium period of 18
months.
 Working Capital - For withdrawal of Working capital upto 10 lakh, the same may be
sanctioned by way of overdraft. Rupay debit card to be issued for convenience of the
borrower. Working capital limit above 10 lakh to be sanctioned by way of Cash Credit
limit.
 Margin Money - The Scheme envisages 25% margin money which can be provided in
convergence with eligible Central / State schemes. While such schemes can be drawn
upon for availing admissible subsidies or for meeting margin money requirements, in all
cases, the borrower shall be required to bring in minimum of 10% of the project cost
as own contribution.
3. Start-up India:
Start-up India Scheme is an initiative by the Government of India for generation of employment
and wealth creation. The goal of Start-up India is the development and innovation of products
and services and increasing the employment rate in India. Benefits of Start-up India Scheme
is Simplification of Work, Finance support, Government tenders, networking opportunities. Start-
up India was launched by Prime Minister Shri. Narendra Modi on 16th January 2016.
Benefits of Start-up India

A. Financial benefits - Most of the start-ups are patent based. It means they produce or
provide unique goods or services. In order to register their patents, they have to incur a
heavy cost which is known as the Patent Cost. Under this scheme, the government
provides 80% rebate on the patent costs. Moreover, the process of patent registration
and related is faster for them. Also, the government pays the fees of the facilitator to
obtain the patent.
B. Income Tax Benefits - Start-ups enjoy a good amount of benefits under the Income
Tax head. The government exempts their 3 years income tax post the incorporation year.
But they can avail it only after getting a certificate from the Inter-Ministerial Board.
Also, they can claim exemption from tax on Capital Gains if they invest money in
specified funds.
C. Registration Benefits - Everyone believes that incorporation and registration of business
are far more difficult than running it. It is because of the long and complex steps of
registration. Under the Start-up India scheme, an application is there to facilitate
registration. A single meeting is arranged to at the Start-up India hub. Also, there is a
single doubt and problem-solving window for them.
D. Government Tenders - Everyone seeks to acquire Government tenders because of high
payments and large projects. But it is not easy to acquire the government tenders.
Under this scheme, the start-ups get priority in getting government tenders. Also, they
are not required to have any prior experience.
E. Huge Networking Opportunities - Networking Opportunities means the opportunity to
meet with various Start-up stakeholders at a particular place and time. The government
provides this opportunity by conducting 2 Start-ups fests annually (both at domestic
as well as the international level). Start-up India scheme also provides Intellectual
Property awareness workshop and awareness.
Registration of the Start-up can be done only from following types of companies-
1. Partnership Firm
2. Limited Liability Partnership Firm
3. Private Limited Company.
4. Skill India
The contents on National Skill Development Corporation to be included at the end of the
contents covered under the aforesaid point.
National Skill Development Corporation

National Skill Development Corporation (NSDC) is a not-for-profit public limited company
incorporated on July 31, 2008 under section 25 of the Companies Act, 1956 (corresponding to
section 8 of the Companies Act, 2013). NSDC was set up by Ministry of Finance as Public
Private Partnership (PPP) model. The Government of India through Ministry of Skill
Development & Entrepreneurship (MSDE) holds 49% of the share capital of NSDC, while the
private sector has the balance 51% of the share capital.
NSDC aims to promote skill development by catalysing creation of large, quality and for-profit
Vocational institutions. Further, the organisation provides funding to build scalable and
profitable vocational training initiatives. Its mandate is also to enable support system which
focuses on quality assurance, information systems and train the trainer academies either
directly or through partnerships. NSDC acts as a catalyst in skill development by providing
funding to enterprises, companies and organizations that provide skill training. It also develops
appropriate models to enhance, support and coordinate private sector initiatives. The
differentiated focus on 21 sectors under NSDC’s purview and its understanding of their viability
will make every sector attractive to private investment.
The details of various schemes and initiatives are provided below-
(a) Pradhan Mantri Kaushal Kendra:
Vocational training needs to be made aspirational to transform India into the skill capital of
the world. In line with the same, Ministry of Skill Development and Entrepreneurship (MSDE)
intends to establish visible and aspirational Model Training Centres (MTCs) in every district
of the country. NSDC is the implementation agency for the project.
The model training centres envisage to:
 Create benchmark institutions that demonstrate aspirational value for competency based
 skill development training.
 Focus on elements of quality, sustainability and Connection with stakeholders in skills
delivery process.
 Transform from a Mandate-driven footloose model to a sustainable institutional model.

Funding Support
Capital Expenditure
NSDC will provide a concessional secured loan funding per centre, up to 75% of the project
investment, to cover expenditure only related to:
• Training infrastructure including purchase of plant, machinery & equipment
• Training aid and other associated items
• Civil work including setting up prefabricated structures and retrofit existing structures
Operations Support
The sustainability of the centres will be assured against dedicated training numbers under
Pradhan Mantri Kaushal Vikas Yojna (PMKVY) or its successor schemes (any other scheme
under MSDE or NSDC). Each PMKK will be assured a training mandate for three years, under
the PMKVY scheme, as per common norms, subject to capacity and utilization of the centre.
(b) International Skill Training:
A country’s ability and potential for growth is determined by the size of its youth population.
Youth today need to be harnessed, motivated, skilled and streamlined to bring rapid progress
for a country.
India has the relative advantage at present over other countries in terms of distribution of
youth population even when compared to large, fast growing Asian economies such as China
and Indonesia, the two major countries other than India which determine the demographic
features of Asia.
Skill Development and Entrepreneurship: Policy

Recognizing the imperative need for skill development, National Skill Development Policy was
formulated in 2009. Given the vast paradigm shift in the skilling and entrepreneurship
ecosystem in the country and the experience gained through implementation of various skill
development programmes, a need was felt to revisit the existing policy to align the policy
framework with the emerging trends in the national and international milieu. Accordingly,
Government framed the National Policy for Skill Development and Entrepreneurship 2015. The
primary objective of this policy was to meet the challenge of skilling at scale with speed,
standard (quality) and sustainability.
Pre-Departure Orientation Training (PDOT)

Given the need to orient potential migrant workers with regards to language, culture,
do's and don'ts in the destination country, the emigration process and welfare measures,
PDOT program has been launched. Ministry of External Affairs (MEA) in collaboration
with Ministry of Skill Development and Entrepreneurship (MSDE) is conducting the PDOT
program. NSDC is the implementing agency for this program.
A longer variant of PDOT i.e. 160 hours was offered at all IISCs which consisted of country
orientation, language and digital literacy.
A shorter variant of PDOT program i.e. 1 Day (ongoing) is offered to all migrant workers who
are likely to depart soon and register for the training through registered recruitment agents.
PDOT program is delivered by trainers who have undergone Training of Trainers (ToT) program
organized by MEA. So far, 52 trainers from existing IISCs and NSDC Training Partners have
undergone the PDOT (ToT).
c) Technical Intern Training Program : The program promotes international collaboration through
the transfer of skills, technology, and knowledge among the participating countries thereby,
contributing towards the human resource development. It offers training to the workers for a
specific period (3 – 5 years) in Japan’s industrial society.
The objective is to ensure that the most competent youth is selected and sent to Japan to
participate in TITP.
Ministry of Skill Development & Entrepreneurship (MSDE), Government of India and the
Ministry of Justice, Ministry of Foreign Affairs and Ministry of Health, Labour and Welfare of
Japan signed a Memorandum of Cooperation initiating the Technical Intern Training Program
(TITP) in India in October 2017.
5. Investment in physical infrastructure

India’s infrastructure development has not kept pace with economic growth as it continues to
be beleaguered by perennial problems. To name a few, these challenges revolve around poor
project management practices, financing and regulation. The rising demand for infrastructure
facilities, rapid growth in urbanisation, bulging of the middle class and an increasing working-
age population would engender substantial increase in infrastructure investments during the
next few years.
Sustained investment in infrastructure is one of the key imperatives for turning the “Make in
India” vision into reality. Achieving a manufacturing-led transformation would necessitate
addressing the bottlenecks across infrastructure.
The Government has started taking initiatives in this direction and rewards are being witnessed.
To start with, public spending on infrastructure such as roads, railways, irrigation and urban
infrastructure has received a significant fillip in the Budget. Many bottlenecks facing
infrastructure projects have been eased, particularly in the area of procedurally complex
environmental rules. The execution of planned infrastructure in a timely and high quality manner
would provide the necessary boost to the manufacturing sector and help India realise her true
potential in manufacturing.
Significant pick-up in infrastructure investments can be expected in the coming years given
the various initiatives taken by the Government to address the infrastructure bottlenecks. The
Government strategy to increase investment in infrastructure through a combination of public
investment and public private partnership indicates an increased thrust on the sector.
The Government has also emphasized the need for stepping up the scale and scope of private
investment in infrastructure by allowing 100% FDI in some areas of railway infrastructure and
by easing of FDI rules in construction. Development of smart cities is likely to bridge the gap
in infrastructure development in the country.
Given the renewed emphasis on infrastructure sector by boosting infrastructure financing
coupled with initiatives to enhance physical infrastructure such as roads, railways, urban
infrastructure, the investment in physical infrastructure is expected to increase sharply.
According to D&B’s estimates, physical infrastructure investment is expected to surge to 10.4%
of GDP by FY25 from around 7.5% (Estimated) of GDP in FY15. Resolution of policy
bottlenecks such as land acquisition and improvement in demand conditions would also stoke
private infrastructure investment.
NEED FOR ENTREPRENEURSHIP IN INDIA

The entrepreneurs are considered ‘change agents’ in the process of industrial and economic
development of an economy. The premium mobile role that entrepreneurs play in promoting
industrial and economic development of an economy is well adduced across the countries. In a
sense, entrepreneurs are the ‘spark plugs’ who transform the economic scene of an economy.
The developed countries have more entrepreneurial development as compared to underdeveloped
countries.
Thus, the need for entrepreneurs in India may be captured in the following points:
1. Entrepreneurs promote capital formation by mobilising the idle saving of the people.
2. They create immediate and large-scale employment by establishing small- scale enterprises.
Thus, they reduce the unemployment problem in the country, i.e., the root cause of all
socioeconomic problems.
3. They promote balanced regional development by establishing small-scale enterprises in rural,
remote and less developed regions.
4. They help reduce the concentration of economic power.
5. They promote the equitable redistribution of wealth, income and even political power in the
interest of the country.
6. They encourage effective resource mobilization of capital and skill which might otherwise
remain unutilized and idle.
7. They, by establishing industries, induce backward and forward linkages which stimulate the
process of economic development in the country.
8. Last but no means the least; they also promote country’s export business, i.e. an important
ingredient to economic development.
BOTTLENECKS IN ENTREPRENEURIAL GROWTH

1. Inefficient time management
Most entrepreneurs think on infinite time scales, as though they have plenty of time to achieve
their goals. Time is the most valuable resource, yet most entrepreneurial leaders don’t use it
effectively. It is very important to analyze the business flow metrics and identify time-wasting
processes. Comparing the performance with industry standards to find out the problem areas
in a major challenge . Leveraging technology tools such as automation and machine learning
wherever possible is very important in contemporary times.
McKinsey & Co. reported that the next era of supply chain management will hinge on
autonomous vehicles and a network of smart programs that can optimize efficiency.
Organisational efficiency can be increased by implementing software solutions that break
through bottlenecks and boost productivity.
2. Lack of money
Inadequate funds – Less funding and the resources obtained by these funds -- can hinder
expansion. When it comes to resolving bottlenecks, money matters a lot. It helps in the purchase
of a software programs and hire consultants who reduce the obstacles to growth and
profitability. As the company expands, there is a need to scale up the technology, invest in
sales enablement and direct resources to a number of other critical areas. Money is needed to
achieve all of that.
Fortunately, there are a number of capital sources out there. In addition to venture capital
funding, one can apply for a loan backed by the Small Business Administration. Loans repaid
in less than seven years typically incur a less than 10 percent interest rate, and these loans
can be used to purchase new technology or building your team with supply chain experts.
3. Too much noise

Building and running a start-up can become too complex when the entrepreneur is trying to
cut through the noise generated through social media, marketing, apps and vendors. It’s enough
to make entrepreneurs think they need to chase down the "next big thing" and clamour for
the media limelight.
But limelight doesn’t guarantee success. Many companies that drew huge amounts of press
and venture funding have ultimately failed. The better path is to focus on the work and trust
that attention will come. Put out a great product, and be rigorous about clearing ones path to
growth. The accolades will follow, but they matter only if one can scale and thrive sustainably.
4. A small (or non-existent) network

Being a first-time entrepreneur, with a near-non-existent industry, developing contacts is one
of the biggest challenges to overcome. A strong network is crucial to a company’s growth. But
strong networks aren’t built through viral campaigns or flashy marketing. They develop over
years through resilience, relationship-building and cultivation of a community around the idea.
In Japan and China, sustainable strong networks are and integral part of the value chain and
supply chain To build a supportive network around one’s own business, the type of reach an
entrepreneurship wants to have is critical. Is the brand primarily local? Thereafter, a blue print
needs to be put down, roots have to be made, , through partnerships and sponsorships with
influencers in the region.
If the entrepreneur wants to have global appeal, there is a need to attend conferences and
reach out internationally to learn how to move into other markets. The entrepreneur must
become relevant to the rest of the world.
5. Growing too much too soon

With the objective of growing production, the problems also compound at the same rate.
Figuring out how to scale requires frequent testing and a willingness to pivot – the entrepreneur
doesn’t want to miss out on strategic opportunities. For instance, there’s nothing wrong with
starting small and growing slowly. It's better to take that approach than to overinvest in a
lackluster strategy. One needs to pay attention and switch gears when that's needed.
When Groupon, a US based start-up started the concept of online couponing in 2008, it was a
tremendous hit. But Groupon focused too much on customer acquisition and not enough on
customer retention. So when the company rushed to scale, it hadn't dealt with its pre-existing
issues. Within months of filing its IPO in 2011, Groupon's share price plunged from $20 to $9.
As common as these issues are, Start-up founders are actually the biggest bottlenecks in their
own businesses. They believe they have to do everything themselves, and they try to charge
through problems on their way to growth. Hence, there is a strong need to create strong
internal bonds and decentralisation systems.
MCQ
1. According to a / an _____________, 300 mn youth will enter the labour force by 2025.
(a) Reserve Bank of India Report
(b) Central Statistical Office Report
(c) World Bank Report
(d) Indian Labour Report
2. The Stand-up India scheme is managed by which of the following ministry?

(a) Ministry of Finance
(b) Ministry of Human Resource Development
(c) Ministry of Statistics and Programme Implementation
(d) Ministry of Labour
3. “Most entrepreneurs think on infinite time scales, as though they have eons to achieve their
goals”. The mentioned phrase relates to which of the following bottleneck?
(a) Growing too much too soon
(b) A small (or nonexistent) network
(c) Too much noise
(d) Inefficient time management
4. ‘Make in India’ programme that was launched in ____________.

(a) September 2015
(b) September 2017
(c) September 2014
(d) September 2018
5. Registration of the Start-up cannot be done for which of the following type of company?
(a) Partnership Firm
(b) Limited Liability Partnership Firm
(c) Private Limited Company.
(d) Public Limited Company
Chapter 7: BUSINESS ENVIRONMENT
CHAPTER 7: BUSINESS ENVIRONMENT

OVERVIEW OF BUSINESS ENVIRONMENT
Business organization has to interact and transact with its environment. Hence, both
the business and environment are totally interrelated and mutually interdependent.
Business environment refers to those aspects of the surroundings business enterprise,
which affect or influence its operations and determine its effectiveness.
According to Keith Davis, “Business environment is the aggregate of all conditions,

events and influence that surrounds and affect it”.
According to Andrews, “The environment of a company as the pattern of all external influences that affect
its life and development”.
The business environment is always changing and is uncertain. It is because of dynamism of

environment. As it is already said that the business environment is the sum of all the factors outside
the control of management of a company, the factor, which are constantly changing, and they carry
with them both opportunities and risks or uncertainties which can, make or mark the future of business.
Business environment encompasses all those factors that affect a company’s operations and includes
customers, competitors, stakeholders, suppliers, industry trends, regulations other government
activities, social and economic factors and technological developments. Thus, business environment
refers to the external environment and includes all factors outside the firm, which lead to opportunities
and threats of a firm.
FEATURES AND FACTORS INFLUENCING BUSINESS ENVIRONMENT

The main features of business environment are:
1. All the external forces: Business Environment includes all the forces, institutions and factors
which directly or indirectly affect the Business Organizations.
2. Specific and general forces: Business environment includes specific forces such as investors,
customers, competitors and suppliers. Non-human or general forces are Social, Legal,
Technological, Political, etc. which affect the Business indirectly.
3. Inter-relation: All the forces and factors of Business Environment are inter-related to each
other. For example with inclination of youth towards western culture, the demand for fast
food is increasing.
4. Uncertainty: It is very difficult to predict the changes of Business Environment. As environment
is changing very fast for example in IT, fashion industry frequent and fast changes are taking
place.
5. Dynamic: Business environment is highly flexible and keep changing. It is not static or rigid
that is why it is essential to monitor and scan the business environment continuously.
6. Complex: It is very difficult to understand the impact of Business environment on the
companies. Although it is easy to scan the environment but it is very difficult to know how
these changes will influence Business decisions. Some-time change may be minor but it
might have large impact. For example, a change in government policy to increase the tax
rate by 5% may affect the income of company by large amount.
7. Relativity: The impact of Business environment may differ from company to company or
country to country. For example, when consumer organisation CES published the report of
finding pesticides in cold drinks, resulted in decrease in sale of cold drinks, on the other hand
it increased the sale of juice and other drinks.
TYPES OF ENVIRONMENT / DIMENSIONS OF ENVIRONMENT
Political
environment
Economic
Legal Factors
environment
Types Of
Environment
Technological
Social Factors
Factors
1. Political environment: The political environment affects the economic environment of businesses.
Legislators at the local, state and federal levels may provide incentives or tax
breaks to companies or they can impose regulations that restrict business transactions. In the
latter case, for example, if a political body states that a company must include a certain
chemical in its product, the cost of the product differs. The company passes those costs on to
the customer in the form of higher prices. The customer must determine whether he wants
to purchase that product. If he does not purchase the product, then the company does not
receive the revenue. If a large number of customers decide not to purchase the product, the
company may need to lay off employees.
2. Economic environment: The larger economic environment of a society is a factor that can affect a
company's business environment. During a recession, consumers spend less on optional items such as cars and
appliances. As a result, the business environment suffers. On the other hand, if the economic environment is one
of prosperity, consumers are more likely to spend money, not just on necessities, but larger items as well.
3. Social Factors: Social factors that affect the economic environment of a business are the cultural influences
of the time. For example, a fashion designer that creates bell bottom, striped pants will not succeed in an
environment where straight-leg, solid colored pants are desired. A social environment that tends to be more
conservative will not support styles that appear to be trendy. The fashion designer's business will suffer if he
does not change the clothing style. The same would apply to the manufacturers that produce and stores that
sell these wares.
4. Technological Factors: Innovation and technology affect business environments. As technology advances,
a business is forced to keep pace. For example, when computers were first invented, they were the size of a
room. Users were forced to employ punch cards to perform basic functions. Today, computers that are much
more powerful can fit into the palm of a hand. Businesses that do not keep up with technology risk increased
costs of production and higher prices. If the company's cost to produce a product or service outpaces competitors,
the company may soon find itself out of business.
5. Legal Factors: Often, a business will need to change how it operates for legal reasons. This is often done
when a company's lawyers anticipate a change in legislation, or it may be due to lawsuits, already filed or
anticipated. For example, if a part in a machine is found to be defective, the company may need to issue a
recall. If other companies in the same industry are being sued over something like a data breach of confidential
information, a business may need to change how information is collected and stored.
EASE OF DOING BUSINESS INDEX BY WORLD BANK FOR INDIA (EDB)

In the World Bank’s latest Doing Business Report(DBR, 2019), India has recorded a jump of 23
positions against its rank of 100 in 2017 to be placed now at 77thrank among 190 countries assessed
by the World Bank. India' leap of23 ranks in the Ease of Doing Business ranking is significant considering
that last year India had improved its rank by 30 places, a rare feat for any large and diverse country of the size of
India. As a result of continued efforts by the Government, India has improved its rank by 53 positions in last two
years and 65positions in last four years.
The Doing Business assessment provides objective measures of business regulations and their
enforcement across 190 economies on ten parameters affecting a business through its life cycle. The
DBR ranks countries on the basis of Distance to Frontier (DTF), a score that shows the gap of an
economy to the global best practice. This year, India’s DTF score improved to 67.23 from 60.76 in the
previous year.
India has improved its rank in 6 out of 10 indicators and has moved closer to international best
practices (Distance to Frontier score) on 7 out of the 10 indicators. But, the most dramatic
improvements have been registered in the indicators related to 'Construction Permits' and 'Trading
across Borders'. In grant of construction permits, India's rank improved from 181 in 2017 to 52in 2018,
an improvement of 129 ranks in a single year. In 'Trading across Borders', India's rank improved by 66
positions moving from 146 in 2017 to 80in 2018. The changes in six indicators where India improved
its rank are as follows:
S.No. Indicator 2017 2018 Change

1 Construction Permits 181 52 +129
2 Trading Across Borders 146 80 +66
3 Starting a Business 156 137 +19
4 Getting Credit 29 22 +7
5 Getting Electricity 29 24 +5
6 Enforcing Contracts 164 163 +1
Overall rank 100 77 +23
The important features of India's performance are:

• The World Bank has recognized India as one of the top improvers for the year.
• This is the second consecutive year for which India has been recognized as one of the top
improvers.
• India is the first BRICS and South Asian country to be recognized as top improvers in
consecutive years.
• India has recorded the highest improvement in two years by any large country since 2011 in
the Doing business assessment by improving its rank by 53 positions.
• As a result of continued performance, India is now placed at first position among South Asian
countries as against 6th in 2014.
Indicator wise highlights of India’s performance are:

A. Construction Permits
a. Procedures reduced from 37 to 20 in Mumbai and from 24 to 16 in Delhi
b. Time reduced from 128.5 to 99 days in Mumbai and from 157.5 to 91 days in Delhi
c. Building quality control index improved from 12 to 14 in Mumbai and 11 to 14 in Delhi
d. Cost of obtaining construction permits reduced from 23.2 percent to 5.4 percent
e. DTF score improved from 38.80 to 73.81
B. Trading Across Borders

a. Changes in time and cost are as follows:
b. Robust Risk Management System has reduced inspections significantly

c. e-Sanchit allows traders to file all documents electronically
d. Time and cost to export reduced through the introduction of electronic self-sealing of
container at the factory
C. Starting a Business
a. Procedures reduced from 11 to 10 in Delhi and 12 to 10 in Mumbai
b. Time reduced from 30 to 16 days in Delhi and 29.5 to 17 days in Mumbai
c. PAN, TAN, DIN now merged with SPICe making it a single form for company incorporation
d. No requirement of inspection for registration under Shops & Establishment in Mumbai
e. Distance to Frontier improved from 75.40 to 80.96
D. Access to Credit
a. Rank improved from 29 to 22
b. DTF improved from 75 to 80
c. Strength of legal rights index improved from 8 to 9
d. Secured creditors will now be repaid first during business liquidation hence given priority
over other claims
E. Access to Electricity
a. Procedures reduced from 5 to 3 in Delhi and 5 to 4 in Mumbai
b. DTF improved from 85.21 to 89.15
Improvement has taken place due to the commitment of the Government to carry out comprehensive and complex
reforms, supported by the bureaucracy which has changed its mindset from a regulator to a facilitator. The
Government has undertaken an extensive exercise of stakeholder consultations to understand challenges of the
industry, government process re-engineering to provide simplified and streamlined processes to create a more
conducive business environment in the country. As a result of continued efforts, India's rank has improved as
follows:
The eight indicators in which India has improved its rank over last four years:
S. No. Indicator 2014 2018 Change
1 Construction Permits 184 52 +132
2 Getting Electricity 137 24 +113
3 Trading across Borders 126 80 +46
4 Paying Taxes 156 121 +35
5 Resolving Insolvency 137 108 +29
6 Enforcing Contracts 186 163 +23
7 Starting a Business 158 137 +21
8 Getting Credit 36 22 +14
EASE OF DOING BUSINESS INDEX BY DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL
TRADE (DPIIT) FOR STATES
Department for Promotion of Industry and Internal Trade (DPIIT), in coordination with Central
Ministries/Departments and Governments of States/Union Territories (UTs), has taken several reform measures with
an aim to improve regulatory environment and facilitate doing business in India. The details of action taken in
this regard are given below:
A. World Bank’s Ease of Doing Business Assessment
The World Bank released the Doing Business Report (DBR), 2019 on 31st October, 2018. India
ranks 77 among 190 countries assessed by the Doing Business Team. India has leapt 23 ranks over
its rank of 100 in the DBR 2018. The DBR is an assessment of 190 economies and covers 10
indicators which span the lifecycle of a business. The indicator wise rank of India in World Bank’s
DBR 2019 is as follows:
S. No. Indicator Rank
1. Starting a Business 137
2. Dealing with Construction Permits 52
3. Getting Electricity 24
4. Registering Property 166
5. Getting Credit 22
6. Protecting Minority Investors 7
7. Paying Taxes 121
8. Trading Across Borders 80
9. Enforcing Contracts 163
10. Resolving Insolvency 108
Overall 77
Some of the major indicator wise reforms undertaken by the Government towards easing the business
environment in the country are as under:
(i) Starting A Business

a. The minimum capital requirement for public and private company has been eliminated
under the Companies (Amendment) Act, 2015.
b. Introduced a single form SPICe (Simplified Proforma for Incorporating Company
electronically) by merging five different applications in it i.e. Name reservation, Company
incorporation, Director Identification Number (DIN), Permanent Account Number
(PAN) and the Tax Deduction/Collection Account Number (TAN).
c. Introduced an e-form AGILE (Application for registration of the Goods and Services Tax
Identification Number (GSTIN), Employees’ State Insurance Corporation (ESIC)
registration plus Employees’ Provident Fund Organization (EPFO) registration). Any
applicant, if he wants to register for any of these bodies, can fill in e-form AGILE and get
registration at the time of company incorporation itself. This form enables a user to apply
for GST, EPF and ESI registration with the SPICe form.
d. Launch of a new and simplified web based service i.e. R.U.N. (Reserve Unique Name) for
reserving a name. This has also removed the requirement to use a Digital Signature
Certificate (DSC) during name reservation.
e. Incorporation fee reduced to zero for companies with authorized capital up to INR 15
lakhs
f. The requirement to issue a physical PAN card has been eliminated. Additionally, PAN and TAN are mentioned
in the Certificate of Incorporation (CoI) which is considered as a sufficient proof for PAN and TAN.
g. Online and common registration for EPFO & ESIC is provided on ShramSuvidha Portal.
h. Registrations under Mumbai Shops & Establishments Act are provided in real time without any cost and any
inspection
i. Eliminated the requirement of bank account details for GST registration
(ii) Dealing with Construction Permits:
a. An online single window system has been introduced in Delhi (By Municipal Corporations
in Delhi) and Mumbai (By Municipal Corporation of Greater Mumbai) integrating internal
and external departments, removing requirement of visiting them individually.
b. Unified building bye-laws 2016 have been introduced in Delhi.
c. Deemed approvals have been introduced in Delhi, if approvals are not granted within
defined timelines.
d. Risk based classification of buildings has been introduced for fast tracking building plan
approval, inspection and grant of occupancy-cum-completion certificate.
e. Requirement of submitting notarized certificates or affidavits for building plan approval
has been replaced with e-undertaking in Delhi.
f. Multiple inspections at completion stage have been replaced by single joint inspection in Delhi.
g. Road cutting and restoration for water and sewer connections have been simplified.
(iii) Getting Electricity
a. Procedures for internal wiring inspection by the Electrical Inspectorate (in Delhi) have been eliminated.
b. In Delhi, service line charges have been capped to INR 25,000/- in electrified areas for Low Tension loads
up to 150 KW.
c. Time taken by the utility to carry out external connection works has been reduced in Delhi.
(iv) Getting Credit
a. Secured creditors are paid first during business liquidation, and hence have priority over
other claims such as labour and tax.
(v) Paying Taxes
a. 17 indirect Central and State taxes have been replaced with a single indirect tax, Goods and Service Tax
(GST), for the entire country. The previous sales taxes including the central sales tax, CENVAT, state VAT and
the service tax have been merged into the GST. Unification of these taxes will reduce the cascading effect of taxes
and make taxes paid on inputs creditable to a higher percentage.
b. Corporate income tax has been reduced from 30% to 25% for companies with a turnover
up to INR 250 crore.
c. Electronic System for payment of Social Security Contributions has been introduced
enabling easier return payment.
d. Making payment of EPF has been made mandatory electronically.
e. Administrative charges on The Employees' Provident Funds Scheme, 1952 (EPFS) have
been reduced in March 2017 from 0.85% to 0.65% of the monthly pay. The Employees’
Deposit Linked Insurance (EDLI) administrative charges of 0.01% have been removed.
(vi) Trading Across Borders
a. Time and cost to export and import has been reduced through various initiatives,
including the implementation of electronic sealing of containers, up gradation of port
infrastructure and allowing electronic submission of supporting documents with digital signatures.
b. Enhancement of risk-based inspections for both imports and exports, whereby only about
5% of goods are physically inspected.
c. Advance Bill of Entry has been adopted which allows importers to start the process of
customs clearance before the arrival of the vessel.
d. Equipment on the Nhava Sheva Port in Mumbai has been upgraded by adding 15 new
Rubber Tyre Gantry Cranes. The Phase 1 of the Fourth Container Terminal at the
Jawaharlal Nehru Port Trust, with an additional annual capacity of 2,400,000 TEUs, was
completed in February 2018.
e. The new container terminal, Adani CMA Mundra Terminal Private Limited has been fully
operational since June 2017, with an additional annual capacity of 1,300,000 TEUs.
f. e-Sanchit, an online application system, under the Single Window Interface for Trade (SWIFT) has been
implemented. It allows traders to submit all supporting documents electronically with digital signatures.
(vii) Enforcing Contracts
a. National Judicial Data Grid has been introduced which makes it possible to generate
case measurement report on local courts.
b. The Commercial Courts Act 2015 has been amended to reduce the pecuniary jurisdiction of commercial courts
from INR 1 crore to INR 3 lakhs to establish commercial courts at the District Level. This will help in speedier
disposal of commercial disputes and reduce pendency.
(viii) Resolving Insolvency
a. Insolvency and Bankruptcy Code 2016 has been adopted that introduced a reorganization
procedure for corporate debtors and facilitated continuation of the debtors’ business
during insolvency proceedings.
b. Professional institutions have been established for effective handling of restructuring
and insolvency proceedings.
c. Time-bound resolution process is done under the IBC and liquidation is the last resort.
d. Section 42 of the Insolvency & Bankruptcy Code 2016 has been amended to provide
that a creditor has the right to object to decisions of the liquidator accepting or rejecting
claims against the debtor brought by the creditor itself and by any other creditor.
B. Implementation of Business Reforms by States / UTs

1. The Department spearheaded a dynamic reform exercise that commenced in 2014 to rank
all the States/UTs in the country based on implementation of designated reform parameters.
2. The aim of this exercise is to create a conducive business environment by streamlining

regulatory structures and creating an investor-friendly business climate by cutting down red
tape.
3. DPIIT also developed an online portal, which can be accessed at http://eodb.dipp.gov.in,

wherein all the reforms implemented are accessible for public viewing. The portal also gives
dynamic ranking which updates, as and when, any of the reform points are recognized and
approved.
4. In 2017, the reform exercise was updated to 372 action points with additions introduced
such as Central Inspection system, Trade License, Registration under Legal Metrology, and
Registration of Partnership Firms & Societies.
5. Initiatives taken by DPIIT for the reform process:

i. A nationwide workshop was held on 29th July, 2017 to discuss the relevance and importance of
implementing reforms. The all-day conference witnessed an active involvement of almost 100 participants
from 26 States/UTs. The workshop witnessed sharing of the best practices by States/UTs
ii. A unique handholding method was introduced where leading States were partnered with laggard States/UTs.
West Bengal merits a special mention for its effort for conducting a 3 day workshop for Nagaland
iii. Priority reforms was identified for North east States and others with low implementation
score
iv. 8 workshops were conducted along with the World Bank to address queries posed by States/UTs in Tripura,
Punjab, Haryana, Daman & Diu, Dadra Nagar Haveli, Andaman and Nicobar Islands, Goa and Karnataka
v. To handhold all the 8 north-eastern States, video conferences were arranged.
vi. The assessment of States/UTs under Business Reform Action Plan, 2017-18 was released
jointly by DPIIT and the World Bank on 10th July, 2018.
6. Some important achievements under the exercise for 2017-18 are:-

i. 19 States have designed an Information Wizard providing information for all approvals, licenses, registrations
timelines, and procedure to establish business/industrial unit (pre-establishment & pre-operation)
ii. 21 States/UTs have designed and implemented online Single Window System.
iii. 16 States/UTs have stipulated Construction Permits to be provided within 45 days (Building plan approval to be
provided in 30 days/ Plinth level inspection to be completed in 7 days, final occupancy certificate provided in 8
days). Telangana, Assam and Tamil Nadu have mandated even shorter timelines of 29, 30 and 37 days,
respectively. Tamil Nadu has claimed to have done away with the process of issuance of completion certificate.
iv. 21 States/UTs have implemented a GIS system to provide details about the land earmarked for industrial use
across the State
v. 23 States/UTs have reduced the number of documents required for Obtaining Electricity connection to only 2
vi. 18 States/UTs have brought all compliance inspections conducted by Labour, Factories, Boilers Departments
and Pollution Control Boards under Central Inspection Framework
vii. 12 States/UTs have merged of the payment of court fees and process fees into a single transaction with
some states like Jharkhand, Maharashtra, and Gujarat even repealing process fees from the Court Fees Act
viii. 29 States/ UTs have notified a list of white category industries exempted from taking pollution clearances.
ix. 20 States/UTs implementing an online application system Wholesale Drug License and Retail Drug License
(Pharmacy).
x. 18 States/UTs have online systems for Registration of Partnership firms and Societies,
xi. 20 States/UTs have implemented an online system for registration and renewal under the Legal Metrology
Act, 2009.
7. Business Reform Action Plan 2019 for States

i. An 80 point Action Plan, 2019 has been prepared by DPIIT and shared with all the States
and UTs for implementation of reforms.
ii. As capacity building initiatives, 7 workshops have been conducted in Union Territories
(Dadra & Nagar Haveli, Delhi, Chandigarh, Daman & Diu, Puducherry, Andaman & Nicobar Islands and
Lakshadweep).
iii. 8 regional workshops have been conducted in Lucknow (North Region), Kolkata (East Region), Mumbai (West
Region), Bengaluru (South Region) and Guwahati (North-eastern Region).
8. District Reform Action Plan: A comprehensive 218-point District Reform Plan has been prepared
and shared with the State Governments with a request to implement the same in the districts.
The Action Plan is spread across 8 areas: Starting a Business for Construction, Urban Local
Body Services, Paying Taxes, Land Reform Enabler, Land Administration and Property
Registration Enablers, Obtaining Approval, Miscellaneous and Grievance Redressal/ Paperless
Courts and Law & Order.
MCQ (ICSI):
1. The World Bank released the Doing Business Report (DBR), 2019 on _____________.
(a) 31st October, 2018
(b) 31st August, 2018
(c) 31st July, 2018
(d) 31st May, 2018
2. The DBR is an assessment of _________ and covers 10 indicators which span the lifecycle of a business.
(a) 200 economies
(b) 190 economies
(c) 180 economies
(d) 170 economies
3. In the World Bank’s latest Doing Business Report(DBR, 2019), India has recorded a jump of 23 positions
to be placed at ___________ among 190 countries
(a) 77th rank
(b) 87th rank
(c) 97th rank
(d) 107th rank
4. Who gave the following definition, “Business environment is the aggregate of all conditions, events and
influence that surrounds and affect it”?
(a) FW Taylor
(b) Henry Fayol
(c) Keith Davis
(d) Maslow
5. According to Ease of Doing Business Index by Department for Promotion of Industry and Internal Trade
(DPIIT) for States, what is the rank of India with reference to starting a business?
(a) 140
(b) 157
(c) 167
(d) 137
Chapter 8: GOVT. INSTITUTIONS
CHAPTER 8: KEY GOVERNMENT INSTITUTIONS

NITI AAYOG (Replacement of Yojana Aayog / Planning Commission)
Objectives
1. To evolve a shared vision of national development priorities, sectors and strategies with the active
involvement of States.
2. To foster cooperative federalism through structured support initiatives and mechanisms with the States
on a continuous basis, recognizing that strong States make a strong nation.
3. To develop mechanisms to formulate credible plans at the village level and aggregate these
progressively at higher levels of government.
4. To ensure, on areas that are specifically referred to it, that the interests of national security are
incorporated in economic strategy and policy.
5. To pay special attention to the sections of our society that may be at risk of not benefiting
adequately from economic progress.
6. To design strategic and long term policy and programme frameworks and initiatives, and monitor
their progress and their efficacy. The lessons learnt through monitoring and feedback will be used for
making innovative improvements, including necessary mid-course corrections.
7. To provide advice and encourage partnerships between key stakeholders and national and
international like-minded Think tanks, as well as educational and policy research institutions.
8. To create a knowledge, innovation and entrepreneurial support system through a
collaborative community of national and international experts, practitioners and other
partners.
9. To offer a platform for resolution of inter-sectoral and inter¬ departmental issues in order to accelerate
the implementation of the development agenda.
10. To maintain a state-of-the-art Resource Centre, be a repository of research on good
governance and best practices in sustainable and equitable development as well as help their
dissemination to stake-holders.
11. To actively monitor and evaluate the implementation of programmes and initiatives, including the
identification of the needed resources so as to strengthen the probability of success and scope of
delivery.
12. To focus on technology up gradation and capacity building for implementation of programmes and
initiatives.
13. To undertake other activities as may be necessary in order to further the execution of the national
development agenda, and the objectives mentioned above.
Features
NITI Aayog is developing itself as a State-of-the-art Resource Centre, with the necessary resources, knowledge
and skills, that will enable it to act with speed, promote research and innovation, provide strategic policy vision
for the government, and deal with contingent issues.
NITI Aayog’s entire gamut of activities can be divided into four main heads:
1. Design Policy & Programme Framework
2. Foster Cooperative Federalism
3. Monitoring & Evaluation
4. Think Tank and Knowledge & Innovation Hub
The different verticals of NITI provide the requisite coordination and support framework for NITI to carry
out its mandate. The list of verticals is as below:
1. Agriculture
2. Health
3. Women & Child Development
4. Governance & Research
5. HRD
6. Skill Development & Employment
7. Rural Development
8. Sustainable Development Goals
9. Energy
10. Managing Urbanization
11. Industry
12. Infrastructure
13. Financial Resources
14. Natural Resources & Environment
15. Science & Tech
16. State Coordination & Decentralized Planning (SC&DP)
17. Social-Justice & Empowerment
18. Land & Water Resources
19. Data management & Analysis
20. Public-Private Partnerships
21. Project Appraisal and Management Division (PAMD)
22. Development Monitoring and Evaluation Office
23. National Institute of Labour Economics Research and Development (NILERD)
SUSTAINABLE ACTION FOR TRANSFORMING HUMAN CAPITAL (SATH)

‘SATH’ the programme for Sustainable Action for Transforming Human Capital (SATH) focuses on two main
sectors — Education and Health and to build three ‘Role Model’ States.
After an elaborate selection process based on the Challenge Method, three States namely, Jharkhand,
Madhya Pradesh and Odisha, were selected for the project. The program is being implemented in
these States along with knowledge partners Boston Consulting Group (BCG) & Piramal Foundation
for Education Leadership (PFEL) consortium with NITI Aayog as a facilitator and coordinator in the
process.
The project is being implemented in three phases over a period of 30 months, coming to an end in 2020.
The two phases of the project have been completed. It is now in the third phase of implementation,
which will last for 18 months.
Major achievements under the project SATH-Education include:

• In depth field diagnosis of districts and schools of Jharkhand, Odisha, and Madhya Pradesh.
• State transformation roadmaps released for all the three States, which contain quarterly milestones
committed for each initiative.
• Critical interventions including school mergers, remediation program, training, monitoring teacher recruitment /
rationalization, institutional reorganization at district and state level and proper utilization of MIS are in execution
mode since January, 2018.
Progress of the project is being monitored through a National Steering Group (NSG) and Central Project Monitoring
Unit (CPMU) at national level and State Project Monitoring Unit (SPMU) at State level.
MINISTRY OF CORPORATE AFFAIRS

The Ministry is primarily concerned with administration of the Companies Act 2013, the Companies
Act 1956, the Limited Liability Partnership Act, 2008 & other allied Acts and rules & regulations
framed there-under mainly for regulating the functioning of the corporate sector in accordance with
law. The Ministry is also responsible for administering the Competition Act, 2002 to prevent practices
having adverse effect on competition, to promote and sustain competition in markets, to protect the
interests of consumers through the commission set up under the Act. Besides, it exercises supervision
over the three professional bodies, namely, Institute of Chartered Accountants of India(ICAI), Institute
of Company Secretaries of India(ICSI) and the Institute of Cost Accountants of India (ICAI) which are
constituted under three separate Acts of the Parliament for proper and orderly growth of the professions
concerned. The Ministry also has the responsibility of carrying out the functions of the Central
Government relating to administration of Partnership Act, 1932, the Companies (Donations to National
Funds) Act, 1951 and Societies Registration Act, 1980.
The affiliated offices of Ministry of Corporate Affairs are as under:

(i) Serious Fraud Investigation Office: The Government in the backdrop of major failure of non-
banking financial institutions, phenomenon of vanishing companies, plantation companies
and the recent stock market scam had decided to set up Serious Fraud Investigation Office
(SFIO), a multi-disciplinary organization to investigate corporate frauds. The Organization
has been established and it has started functioning since 1st October, 2003.
(ii) Competition Commission of India: The Competition Commission of India (CCI) was established
under the Competition Act, 2002 for the administration, implementation and enforcement of
the Act, and was duly constituted in March 2009.
The following are the objectives of the Commission.

1. To prevent practices having adverse effect on competition
2. 2. To promote and sustain competition in markets.
3. 3. To protect the interests of consumers and
4. 4. To ensure freedom of trade
5. Consequent upon a challenge to certain provisions of the Act and the observations of the
Hon'ble Supreme Court, the Act was amended by the Competition (Amendment) Act, 2007.
The Monopolies and Restrictive Trade Practices Act, 1969 [MRTP Act] repealed and is replaced
by the Competition Act, 2002, with effect from 01st September, 2009 [Notification Dated 28th
August, 2009].
(iii) Indian Institute Of Corporate Affairs : IICA has been established by the Indian Ministry of Corporate
Affairs for capacity building and training in various subjects and matters relevant to corporate
regulation and governance such as corporate and competition law, accounting and auditing
issues, compliance management, corporate governance, business sustainability through
environmental sensitivity and social responsibility, e-Governance and enforcement etc.
One of the Wings of IICA, the ICLS Academy, has the responsibility for conducting the
Induction & Advanced Training for probationary Officers (POs) belonging to the Indian
Corporate Law Service recruited through the Common Exam of Civil Services Examination
conducted by UPSC.
The Institute has been designed with an eye on the future to provide a platform for dialogue, interaction and
partnership between governments, corporate, investors, civil society, professionals, academicians and other
stake holders in the emerging 21st century.
SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

Securities and Exchange Board of India (SEBI) is a statutory regulatory body entrusted with the responsibility
to regulate the Indian capital markets. It monitors and regulates the securities market and protects the interests
of the investors by enforcing certain rules and regulations. SEBI was founded on April 12, 1992, under the
SEBI Act, 1992. Headquartered in Mumbai, India, SEBI has regional offices in New Delhi, Chennai, Kolkata
and Ahmadabad along with other local regional offices across prominent cities in India.
The objective of SEBI is to ensure that the Indian capital market works in a systematic manner and provide
investors with a transparent environment for their investment. To put it simply, the primary reason for setting up
SEBI was to prevent malpractices in the capital market of India and promote the development of the capital
markets.
The Preamble of the Securities and Exchange Board of India describes the basic functions of the Securities
and Exchange Board of India as:
“...to protect the interests of investors in securities and to promote the development of,
and to regulate the securities market and for matters connected therewith or incidental
thereto.”
Functions of SEBI
The functions and powers of SEBI have been listed in the SEBI Act,1992. SEBI caters to the needs of
three parties operating in the Indian Capital Market. These three participants are mentioned below
• Issuers of the Securities: Companies that issue securities are listed on the stock exchange.
They issue shares to raise funds. SEBI ensures that the issuance of Initial Public Offerings
(IPOs) and Follow-up Public Offers (FPOs) can take place in a healthy and transparent way.
• Protects the Interests of Traders & Investors: It is a fact that the capital markets are functioning
just because the traders exist. SEBI is responsible for safeguarding their interests and ensuring
that the investors do not become victims of any stock market fraud or manipulation.
• Financial Intermediaries: SEBI acts as a mediator in the stock market to ensure that all the
market transactions take place in a secure and smooth manner. It monitors every activity of
the financial intermediaries, such as broker, sub-broker, NBFCs, etc
Powers of SEBI
Securities and Exchange Board of India has the following three powers:
Quasi-Judicial: With this authority, SEBI can conduct hearings and pass ruling judgements in cases
of unethical and fraudulent trade practices. This ensures transparency, fairness, accountability
and reliability in the capital market. SEBI PACL case is an example of this power.
Quasi-Legislative: Powers under this segment allow SEBI to draft rules and regulations for the
protection of the interests of the investor. One such regulation is SEBI LODR (Listing Obligation
and Disclosure Requirements). It aims at consolidating and streamlining the provisions of existing
listing agreements for several segments of the financial market like equity shares. This type of
regulation formulated by SEBI aims to keep any malpractice and fraudulent trading activates at
bay.
Quasi-Executive: SEBI is authorised to file a case against anyone who violates its rules and regulation. It
is empowered to inspect account books and other documents as well if it finds traces of any suspicious activity.
RESERVE BANK OF INDIA (RBI)

The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve
Bank of India Act, 1934.
The Central Office of the Reserve Bank was initially established in Calcutta but was permanently
moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are
formulated.
Though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully owned by the Government
of India.
The Preamble of the Reserve Bank of India describes the basic functions of the Reserve Bank as:
"to regulate the issue of Bank notes and keeping of reserves with a view to securing monetary stability in
India and generally to operate the currency and credit system of the country to its advantage; to have a
modern monetary policy framework to meet the challenge of an increasingly complex economy, to maintain price
stability while keeping in mind the objective of growth."
Main Functions of RBI

Monetary Authority
• Formulates, implements and monitors the monetary policy.
• Objective: maintaining price stability while keeping in mind the objective of growth.
Regulator and supervisor of the financial system

• Prescribes broad parameters of banking operations within which the country's banking and
financial system functions.
• Objective: maintain public confidence in the system, protect depositors' interest and provide
cost-effective banking services to the public.
Manager of Foreign Exchange

• Manages the Foreign Exchange Management Act, 1999.
• Objective: to facilitate external trade and payment and promote orderly development and
maintenance of foreign exchange market in India.
Issuer of currency
• Issues and exchanges or destroys currency and coins not fit for circulation.
• Objective: to give the public adequate quantity of supplies of currency notes and coins and in
good quality.
Developmental role
• Performs a wide range of promotional functions to support national objectives.
Regulator and Supervisor of Payment and Settlement Systems

• Introduces and upgrades safe and efficient modes of payment systems in the country to meet
the requirements of the public at large.
• Objective: maintain public confidence in payment and settlement system
Related Functions
• Banker to the Government: performs merchant banking function for the central and the
state governments; also acts as their banker.
• Banker to banks: maintains banking accounts of all scheduled banks.
Other Significant Facts

• Has 27 regional offices, most of them in state capitals and 04 Sub-offices.
• Deposit Insurance and Credit Guarantee Corporation of India (DICGC), Bharatiya Reserve
Bank Note Mudran Private Limited (BRBNMPL), Reserve Bank Information Technology Private
Limited (ReBIT), Indian Financial Technology and Allied Services (IFTAS) are fully owned
subsidiaries of Reserve Bank of India.
• Has six training establishments- Three, namely, RBI Academy, College of Agricultural
• Banking and Reserve Bank of India Staff College are part of the Reserve Bank.
Others are autonomous, such as, National Institute for Bank Management, Indira Gandhi Institute for
Development Research (IGIDR), Institute for Development and Research in Banking Technology
(IDRBT)
INSOLVENCY AND BANKRUPTCY BOARD OF INDIA (IBBI)

The Insolvency and Bankruptcy Board of India was established on 1st October, 2016 under the Insolvency
and Bankruptcy Code, 2016 (Code). It is a key pillar of the ecosystem responsible for implementation of
the Code that consolidates and amends the laws relating to reorganization and insolvency resolution of corporate
persons, partnership firms and individuals in a time bound manner for maximization of the value of assets of such
persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders.
It is a unique regulator: regulates a profession as well as processes. It has regulatory oversight over the
Insolvency Professionals, Insolvency Professional Agencies, Insolvency Professional Entities and
Information Utilities. It writes and enforces rules for processes, namely, corporate insolvency resolution,
corporate liquidation, individual insolvency resolution and individual bankruptcy under the Code. It
has recently been tasked to promote the development of, and regulate, the working and practices of,
insolvency professionals, insolvency professional agencies and information utilities and other
institutions, in furtherance of the purposes of the Code. It has also been designated as the ‘Authority’
under the Companies (Registered Valuers and Valuation Rules), 2017 for regulation and development
of the profession of valuers in the country.
NATIONAL COMPANY LAW TRIBUNAL (NCLT)

The Central Government has constituted National Company Law Tribunal (NCLT) under section 408 of the
Companies Act, 2013 (18 of 2013) w.e.f. 01st June 2016.
In the first phase the Ministry of Corporate Affairs have set up eleven Benches, one Principal Bench at New Delhi
and ten Benches at New Delhi, Ahmadabad, Allahabad, Bengaluru, Chandigarh, Chennai, Guahati, Hyderabad,
Kolkata and Mumbai. These Benches will be headed by the President and 16 Judicial Members and 09
Technical Members at different locations.
National Company Law Tribunal is the outcome of the Eradi Committee. NCLT was intended to be
introduced in the Indian legal system in 2002 under the framework of Companies Act, 1956 however,
due to the litigation with respect to the constitutional validity of NCLT which went for over 10 years,
therefore, it was notified under the Companies Act, 2013. It is a quasi-judicial authority incorporated
for dealing with corporate disputes that are of civil nature arising under the Companies Act. However,
a difference could be witnessed in the powers and functions of NCLT under the previous Companies
Act and the 2013 Act. The constitutional validity of the NCLT and specified allied provisions contained
in the Act were re-challenged. Supreme Court had preserved the constitutional validity of the NCLT,
however, specific provisions were rendered as a violation of the constitutional principles.
NCLT works on the lines of a normal Court of law in the country and is obliged to fairly and without any biases
determine the facts of each case and decide with matters in accordance with principles of natural justice and in
the continuance of such decisions, offer conclusions from decisions in the form of orders. The orders so formed
by NCLT could assist in resolving a situation, rectifying a wrong done by any corporate or levying penalties and
costs and might alter the rights, obligations, duties or privileges of the concerned parties. The Tribunal isn’t
required to adhere to the severe rules with respect to appreciation of any evidence or procedural law.
Major Functions of NCLT

1. Registration of Companies
The new Companies Act, 2013 has enabled questioning the legitimacy of companies because
of specific procedural errors during incorporation and registration. NCLT has been
empowered in taking several steps, from cancelling the registration of a company to dissolving
any company. The Tribunal could even render the liability or charge of members to unlimited.
With this approach, NCLT can de-register any company in specific situations when the
registration certificate has been obtained by wrongful manner or illegal means under section
7(7) of the Companies Act, 2013.
2. Transfer of shares
NCLT is also empowered to hear grievances of rejection of companies in transferring shares and securities and
under section 58- 59 of the Act which were at the outset were under the purview of the Company Law Board.
Going back to Companies Act, 1956 the solution available for rejection of transmission or transfer were limited only
to the shares and debentures of a company but as of now the prospect has been raised under the Companies
Act, 2013 and the now covers all the securities which are issued by any company.
3. Deposits
The Chapter V of the Act deals with deposits and was notified several times in 2014 and
Company Law Board was the prime authority for taking up the cases under said chapter.
Now, such powers under the chapter V of the Act have been vested with NCLT. The provisions
with respect to the deposits under the Companies Act, 2013 were notified prior to the inception
of the NCLT. Unhappy depositors now have a remedy of class actions suits for seeking remedy
for the omissions and acts on part of the company that impacts their rights as depositors.
4. Power to investigate
As per the provision of the Companies Act, 2013 investigation about the affairs of the company
could be ordered with the help of an application of 100 members whereas previously the
application of 200 members was needed for the same. Moreover, if a person who isn’t related
to a company and is able to persuade NCLT about the presence of conditions for ordering an
investigation then NCLT has the power for ordering an investigation. An investigation which
is ordered by the NCLT could be conducted within India or anywhere in the world. The
provisions are drafted for offering and seeking help from the courts and investigation agencies
and of foreign countries.
5. Freezing assets of a company

The NCLT isn’t just empowered to freezing the assets of a company for using them at a later stage when such
company comes under investigation or scrutiny, such investigation could also be ordered on the request of others
in specific conditions.
6. Converting a public limited company into a private limited company

Sections 13-18 of the Companies Act, 2013 read with rules control the conversion of a Public
limited company into the Private limited company, such conversion needs an erstwhile
confirmation from the NCLT. NCLT has the power under section 459 of the Act, for imposing
specific conditions or restrictions and might subject granting approvals to such conditions.
NATIONAL COMPANY LAW APPELLATE TRIBUNAL (NCLAT)

National Company Law Appellate Tribunal (NCLAT) was constituted under Section 410 of the Companies
Act, 2013 for hearing appeals against the orders of National Company Law Tribunal(s) (NCLT), with effect
from 1st June, 2016.
NCLAT is also the Appellate Tribunal for hearing appeals against the orders passed by NCLT(s) under Section 61
of the Insolvency and Bankruptcy Code, 2016 (IBC), with effect from 1st December, 2016. NCLAT is also the
Appellate Tribunal for hearing appeals against the orders passed by Insolvency and Bankruptcy Board of India under
Section 202 and Section 211 of IBC.
NCLAT is also the Appellate Tribunal to hear and dispose of appeals against any direction issued or decision
made or order passed by the Competition Commission of India (CCI) - as per the amendment brought to Section
410 of the Companies Act, 2013 by Section 172 of the Finance Act, 2017, with effect from 26th May, 2017.
Jurisdiction of NCLAT
The National Company Law Appellate Tribunal is headed by the Chairperson and consists of not more than
eleven members. It is a higher law governing forum than NCLT. The Appellate Tribunal hears appeals filed
against the Tribunal court orders. The appeal can be placed within 45 days from the date on which NCLT
announces its decisions. The Appellate Tribunal court goes through the evidence transferred from the Tribunal,
making changes or confirming the order given by the latter. This process happens within a time span of six months.
Dissatisfaction with Tribunal Orders

If a group or an individual is to be dissatisfied with the orders passed by the Tribunal Court it is obvious
to move on to the next, only, option, that is filing an appeal to the Appellate Court where the decisions
of NCLT are reviewed and checked from the point of law and facts. The Tribunal Court is in charge of
finding and gathering evidence while the Appellate Court decides cases based on the already collected
evidence. If the outcome is not satisfactory even then, one should approach the Supreme Court.
MCQ: (ICSI)
1. The Insolvency and Bankruptcy Board of India was established on___________.
(a) 1st October, 2016
(b) 1st October, 2017
(c) 1st October, 2015
(d) 1st October, 2018
2. Which of the following is not the affiliated office of Ministry of Corporate Affairs?
(a) Serious Fraud Investigation Office
(b) Competition Commission of India
(c) Indian Institute of Corporate Affairs

(d) Central Statistics Office
3. National Company Law Tribunal is the outcome of the _______________

(a) Srikrishna Committee
(b) NL Mitra Committee
(c) Eradi Committee
(d) Uday Kotak Committee
4. National Company Law Appellate Tribunal (NCLAT) was constituted under _________of the
Companies Act, 2013
(a) Section 310
(b) Section 410
(c) Section 510
(d) Section 610
5. The Reserve Bank of India was established on ___________

(a) April 1, 1940
(b) April 1, 1950
(c) April 1, 1935
(d) April 1, 1960
CA CS Harish Mathariya
[CA, CS, GDC & A, B.Com & L.L.B (P)]
Harish Mathariya is a Chartered Accountant

as well as a Company Secretary by
profession. He specializes in extending
services in the areas of Finance & Auditing.
He is also a visiting faculty to the most
reputed Management Institutes in & around
Pune.
His core lies in routing accounts through

the very basics, for which, he has been the
most loved face for Accounts.
Having taught students for over 7 years, he

is well known for taking Accounts in a very
conceptual way batches for Non-
commerce students.
To his credit, he as 100+ All India Rankers,

which also includes AIR 1 twice.
His students acknowledge his simpliﬁcation

in Accounts as “Don't worry Bol Hari”. He is
a Founder of http://www.onlylectures.com
and is also a Co-Founder of YES Academy,
most loved academy for CS.

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CHAPTER 6: ENTREPRENEURSHIP SCENARIO

Benefits of Start-up India

National Skill Development Corporation

 Transform from a Mandate-driven footloose model to a sustainable institutional model.

Skill Development and Entrepreneurship: Policy

Pre-Departure Orientation Training (PDOT)

5. Investment in physical infrastructure

NEED FOR ENTREPRENEURSHIP IN INDIA

BOTTLENECKS IN ENTREPRENEURIAL GROWTH

3. Too much noise

4. A small (or non-existent) network

5. Growing too much too soon

2. The Stand-up India scheme is managed by which of the following ministry?

4. ‘Make in India’ programme that was launched in ____________.

CHAPTER 7: BUSINESS ENVIRONMENT

According to Keith Davis, “Business environment is the aggregate of all conditions,

The business environment is always changing and is uncertain. It is because of dynamism of

FEATURES AND FACTORS INFLUENCING BUSINESS ENVIRONMENT

TYPES OF ENVIRONMENT / DIMENSIONS OF ENVIRONMENT

EASE OF DOING BUSINESS INDEX BY WORLD BANK FOR INDIA (EDB)

S.No. Indicator 2017 2018 Change

The important features of India's performance are:

Indicator wise highlights of India’s performance are:

B. Trading Across Borders

b. Robust Risk Management System has reduced inspections significantly

(i) Starting A Business

B. Implementation of Business Reforms by States / UTs

2. The aim of this exercise is to create a conducive business environment by streamlining

3. DPIIT also developed an online portal, which can be accessed at http://eodb.dipp.gov.in,

5. Initiatives taken by DPIIT for the reform process:

6. Some important achievements under the exercise for 2017-18 are:-

7. Business Reform Action Plan 2019 for States

CHAPTER 8: KEY GOVERNMENT INSTITUTIONS

SUSTAINABLE ACTION FOR TRANSFORMING HUMAN CAPITAL (SATH)

Major achievements under the project SATH-Education include:

MINISTRY OF CORPORATE AFFAIRS

The affiliated offices of Ministry of Corporate Affairs are as under:

The following are the objectives of the Commission.

SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

RESERVE BANK OF INDIA (RBI)

Main Functions of RBI

Regulator and supervisor of the financial system

Manager of Foreign Exchange

Regulator and Supervisor of Payment and Settlement Systems

Other Significant Facts

INSOLVENCY AND BANKRUPTCY BOARD OF INDIA (IBBI)

NATIONAL COMPANY LAW TRIBUNAL (NCLT)

Major Functions of NCLT

5. Freezing assets of a company

6. Converting a public limited company into a private limited company

NATIONAL COMPANY LAW APPELLATE TRIBUNAL (NCLAT)

Dissatisfaction with Tribunal Orders

(c) Indian Institute of Corporate Affairs