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The Department for Promotion of Industry and Internal Trade (DPIIT) will take up for discussions lingering concerns of startups on issues around Angel tax, taxation of Employee Stock Option Plans and bank guarantee commitments in tenders in the upcoming budget to be presented after the general elections.
Further, the Centre is gearing up for a new World Bank assessment framework called Business Ready (B-READY), which would assess countries on everything from the start to the closure of a business.
“There are four or five elements which they (startups) are a little concerned about. Mainly these are on issues like Angel tax, TDS ( tax deducted at source) there is some software related issue, on ESOP… getting into some kind of double taxation,” DPIIT secretary Rajesh Kumar Singh told ET in an interview.
Singh said work needs to be done to improve the country’s performance on contract enforcement and compliance, customs and land transfers, and land transfer mutations.
“We are preparing for that (new framework). They have circulated a set of indicators and questionnaires which are quite voluminous. I think there are about 13,000 odd questions in that,” Singh said.
On land issues, he said along with land record digitization, the aim is to bring down litigation.
Singh said the department is trying to ensure that the B-READY elements are also covered in the Business Reforms Action Plan (BRAP) which ranks states and assesses them on 301 reform action points that improve investor confidence and access to government services for citizens. He said access and ease of utilities is one such area. Singh added that work had begun on reducing more compliances under the second edition of Jan Vishwas Bill as part of ease of doing business.
Tesla, EV policy
Singh hoped that Tesla Inc CEO Elon Musk’s upcoming India visit “will be something positive”.
Asked about the Tesla’s investment plans for India, Singh said: “I don’t want to prejudge that. These are commercial decisions. They have their own system where they have to take their board approval… what he will announce I have no idea but we are hoping that it will be something positive… It is their call. The ball is in their court.”
He said the DPIIT’s role, along with heavy industries ministry was to create an electric vehicle (EV) policy and “hopefully that will attract many people including Tesla”.
Investment
On falling FDI inflows, he said it should be looked at it in terms of three year average. “The three-year average shows the trend is very healthy,” he said. The inflows have risen to around $70 billion from about $30-40 billion and Singh said the idea is now to take it to $100 billion and make that the base. “We are confident we can get that,” he said.
Ecommerce policy
“From our side, consultations are over. We have submitted it. We’ll wait for the government to take a call. We’ll have to wait till the election,” Singh said on the ecommerce policy. He said the government would likely issue the consumer protection rules alongside, which are aligned to that policy. “The idea is to bring clarity to the whole issue of inventory versus (marketplace) what is possible and what is not possible,” he said. Definition of e-commerce and transmissions could also be part of the policy.
PLI scheme
Singh said the government aims to boost the existing laggard sectors such as advanced chemistry cell, textiles, bulk drugs and solar PV modules before adding any more new sectors. There was a proposal from DPIIT for e-bikes, toys and leather and footwear and from some other departments for vaccines and containers. “We are focusing on fully grounding the existing 14 out of which 9-10 are pretty much grounded, but there are 3-4 which have not taken off as much as we would wish,” Singh said.
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