Abhinav TiwariJohara Lakhani

Nagendra Pratap SinghPradeep Damani

Being Entrepreneur in India is NOT a Death Wish

Indian EconomyGDP – $ 1.250 trillionGrowth Rate- 8.8 % avg.Services – 10.7 %Manufacturing- 8.4 %Agriculture – 2.6 %Fiscal Deficit (est.) for the year 08-09- Rs.

133,287 CroreDirect tax collection-228745 croreService tax collection-23053 crore

Source- Union Budget 08-09

What is entrepreneurEntrepreneur is one who organizes, operates

and assumes the risk in a business venture in expectation of gaining the profit

In simple words entrepreneur is one who wants to start a business or enterprise

Entrepreneurship helps Economy…Generate EmploymentRevenues for the GovernmentInclusive GrowthNew TechnologyDevelopment of the societyGives higher purchasing power to the people

of the country

Leading Entrepreneurs of IndiaSunil Bharti Mittal – Bharti Airtel Ltd.Narayan Murthy – Infosys Technologies Ltd.P.P. Chhabria – Finolex Industries Ltd.Kishore Biyani – Future Group.Azim Premji – Wipro.Naresh Goyal – Jet Airways.L.N. Jhunjhunwala – LNJ Bhilwara Group.Ratan Tata- Tata Sons.

Some facts about INDIA2nd largest pool of scientists and engineers in the

World.

The domestic BPO sector is projected to increase to $4 billion in 2004 and reach $65 billion by 2010. (McKinsey & Co.).

Wal-Mart sources $1 Billion worth of goods from India

Hyundai India is set to become the global small car hub.

Indian economy- 1947 - 1991India faced with a serious problem of balance

of payment in 1990-91Major transportation like airways, buses

were in hands of government Banks were nationalized License rajPoor infrastructure facilitiesMajor industries in the hand of government

Indian Economy – 1991 onwardsOpening up the public sector to private

playersDivesting profit making PSUs, reduction in

fiscal deficitEnd of License RajAbolishing threshold limits of MRTP

companiesFDIAutonomy to private sectorReduction of import duties

How LPG policies has helped Entrepreneur Tariffs on imported capital goods have been

lowered

Financial sector and market reform.

Pervasive delicensing of the industrial sector

Inflows of foreign investment

Better infrastructure

Infrastructure DevelopmentRoadways

Railways

Ports

Airports

Communication Services

Power

SEZ

Banking

RoadsThe Golden quadrilateral- completion

percentage– 96.48%*North – south corridorEast- West corridorPradhan Mantri Gram Sadak YojnaAllocation for the NHDP- Rs. 12,966 crore.*

} Completion percentage- 23.36%*

*Source- Union Budget 2008-2009Source- 11th Planning Commission Report

RailwaysIndian Railways have started the work of

making the dedicated freight lines on the Mumbai- Delhi and Howrah- Delhi routes called the Eastern and Western corridors.

The opening of container movement will help companies in a large way in terms of their logistics.

Source- 11th Planning Commission Report

PortsAccording to the trends the cargo traffic is

expected to increase form 540MT in 2004-05 to 800MT in 2012 .

So the government has decided to upgrade all existing port to handle more traffic.

This port expansion process will not only help in reducing the load on the port but will also help private sector and public sector in transportation of their goods.

Source- 11th Planning Commission Report

AirportsAir traffic in India has increased considerably

for past many years.For this reason government has taken up

modernization of existing airports and also construction of 35 new airport.

Up gradation of Delhi and Mumbai airport is expected to finish by 2010 and new airports in Bangalore and Hyderabad have already been constructed.

Source- 11th Planning Commission Report

Communication ServicesOn an average this sector adds 5 million

customers per month

Contributes Rs.17000 crore to the National Exchequer.

Figure estimated to reach Rs. 60,000 crore by the end of 11th five year plan

Contd..Allocation of Rs. 1680 crore to department of

telecommunication.

Rs. 75 crore for common service centres.

Rs. 450 crore for SWAN

Rs. 275 crore for state data centres.

Source- Union Budget 08-09

PowerYearYear Electricity – production( kWh)Electricity – production( kWh)

20032003 533,300,000,000533,300,000,000

20042004 533,300,000,000533,300,000,000

20052005 547,200,000,000547,200,000,000

20062006 556,800,000,000556,800,000,000

20072007 630,600,000,000630,600,000,000

Source- government of India

Contd..

Contd..Rs. 5500 crore allocated to the Rajiv Gandhi

Vidyutikaran Yojna

Rs. 800 crore to be provided for Accelerated power development and reforms project.

Source- Union Budget 08-09

Special economic zonesA Special Economic Zone (SEZ) is a

geographical region that has economic laws that are more liberal than a country's typical economic laws.

Evolved in the last three years.Central S.E.Z Act ready and already 8 states

have accepted the Act.Currently, India has 1022 units in operations

in 9 functional SEZs, each an average size of 200 acres.

Some functional S.E.Z’s in IndiaKandla and Surat (Gujarat) Cochin (Kerala) Santa Cruz (Mumbai–Maharashtra) Falta (West Bengal) Chennai (Tamil Nadu) Visakhapatnam (Andhra Pradesh) NOIDA (Uttar Pradesh)UP Ilandaikulam Madurai (Tamil Nadu) Nanguneri and Tirunelveli (Tamil Nadu) Nagpur (Maharashtra) MIHANPune (Maharashtra) Pithampur (Madhya Pradesh)

Why S.E.Z’s…Tax exemptionNo license required for import of goods.Manufacturing, trading and services allowed.Single window approval by R.O.C.No license required for manufacture of items

under S.S.I.100% F.D.I allowed in manufacturing and no

cap on foreign investments.

Contd..100% tax exemption for 5 years.50% tax exemption thereafter.50% for reinvestment for 10 years.Service tax exemption to S.E.Z unitsPermitted to carry forward losses.Duty free imports for goods/procurement of

goods for development, maintenance and operation of S.E.Z units

MIHAN project at NagpurNagpur Airport has been declared as

International Airport for Passenger & Cargo operation by Government of India.

The cost of project is Rs. 2500 croresA captive power project of 100 MW to be built.Size of the project – 4354 hectaresCompanies like DLF, Wipro, Satyam have been

allotted space in the SEZ. Boeing is setting up a M.R.O facility with an

investment of Rs.850 crores.Source- MADC website

BankingTime bound working.

Change in attitude towards customers.

Transparency in procedures.

Increase in banking hours.

New services.

Source of FinanceSIDBI

IFCI

ICICI

IDBI

SIDBINew entrepreneursDirect credit schemes

Technology upgradation fund

Composite loan schemes

Single window schemes

Contd..Existing EntrepreneursDirect credit schemes

Technology upgradation fund

Composite loan schemes

Direct discounting scheme

Budget 08-09 HighlightsIncome tax holidays.

Reduction in excise duty.

Reduction in customs duty.

Application of customs duty on naphtha to protect the local producers.

Contd..Banking transaction tax withdrawn w.e.f.

1/4/09

Sales tax to be reduced from 3 % to 2%

Increase in the threshold limit of service tax- Rs. 1000000

Changes in Income Tax slabs

Tools to the EntrepreneursRight to Information Act

Availability of various facilities online such as Income tax returns, ROC.

RecommendationsGovernment should take measures to

increase the number of tax payers.

The parallel economy should be brought under the tax net.

Committee to keep a check on government allocations and equivalent application of the money.

Practical Cases.

Company born in an hourName- Corporate Professionals eSolution Pvt.

Ltd; New Delhi

Promoter filed for name application at 10:41 AM.

By 10:50 AM the MoA & AoA were stamped and notarized.

By 11:50 AM the certificate of incorporation was given by ROC

* Source- Economic Times Delhi; Date: Aug 2, 2006; Section: Economy; Page Number: 19

Opaque GroupEarlier Now

A lot of formalities needed to be completed with the excise department for getting the excise registration.

With all documents ready, one can get registration online

An inspection was conducted by the excise inspector.

No inspection is required now.

Approval of price list by the department No approval of the price list is required.

Bill Book authentication Self – authentication by the director

Deposition of excise duty before the delivery of material

Duty to be deposited fortnightly

Excise Department

Contd…Earlier Now

Only nationalized banks were available Private as well as nationalized banks are available

High rate of interest Interest rate now calculated on the basis of prime landing rate and performance of account

Rigid attitude More customer friendly

No time bound working Time bound working

High amount of collateral security To be decided on the basis of project to be funded, the reputation of the company with the bank

Less working hours 12 hour working for most of the banks

Absence of any facility New facilities in terms of day-to-day banking as well as new credit facilities

Banking Sector-

Import policies Started business in 1977 in Secundrabad.High difficulty in getting import license.Only source for imported product- Custom

notified shops.

Ease of getting import license.An importer of toys and RC planes from

China.Fast transportation.

Business Model

Business ModelConversion of plastic waste to crude oil.

A project of 5 MT. per day costs Rs. 5.5 Crore.

Total amount of waste generated in India – 27000 MT/day*

1 kg. plastic waste yields 1 lit. of crude oil.*- an estimate by the Central Pollution Control Board

Contd…Cost of production – Rs. 7 per kg.

Cost of raw material – Rs. 12-15 per kg.

The crude oil produced yields petrol, diesel, kerosene, LPG and coke.

The Process

CalculationsCrude Oil Consumption in India 115 MMTPA

Crude Imported 80% 92 MMTPAWaste plastic generated in India

(excluding almost equal amount of imported Waste dumped in India)

27000 MT/dayi.e. 9855000.00 MT/annumi.e. 9855000000.00 Kg/annum

Quantity of crude that can be replaced by the output of the Zadgaonkars’

Process (Assumption: Only the Waste Plastic generated in India is processed.)

11481075 Kilo-litre /annum

i.e. 11481075000.00 Litres /annumi.e. 72213791.00 Barrels/annum

Average rate of crude oil *100 USD per Barrel

Saving on Foreign Currency 7221379100 USD

288855164000 INR

Source – Ministry of Petroleum, CPCB1 USD = Rs. 40.( estimated)*- Estimated value

AdvantagesThe country would save a huge amount of

Foreign Currency.

The dependency on OPEC nations will reduce.

The problem of disposal of plastic waste will get solved.

The petrol produced does not have any sulphur or lead content.

Contd…Successfully passed all the test conducted by

IOC.

The vehicle tested runs better on this petrol as compared to the normal petrol.

Our special thanks to..Prof. Debajyoti Majumder.Mr. J.K. Damani – Opaque Group, Nagpur.Mr. Yogesh Agrawal – Chartered Accountant,

Nagpur.Mr. Vinod Satwani- Shopping Centre,

SecundrabadMrs. Alka Zadgaonkar – H.O.D.(Chemistry), G.H.R.C.E; Nagpur.

Thank You….

Questions ???