I believe that “Make in India” dream of our beloved PM is very much possible. But for the same we need to have certain basic enablers in place to make it happen like:
 
On policy side we need to remove the inverted duty structure as prevalent presently which favours imports rather than manufacturing in India. This will also augment tax revenue for Indian Government in the long term. Other than this we need simpler tax laws with non-adversarial tax regime where in tax issues are not lingered for years but are resolved in mutual consultation through alternate avenues like DRP, APA, MAP, Tax committees and industry representations.
 
On the issue of giving tax incentives to the industry I believe more than that we need world class infrastructure for the industry including electricity, water, roads, shipping etc. Other than this we need to develop more cities so that stress on some of the major cities can be reduced. We need to encourage and open more educational institutions which can impart cutting edge knowledge to youngsters so that they can become ready to take different roles in our emerging economy including starting their own ventures for the new age economy like e-commerce.
 
On implementation side we need Government to keep moving on the journey of simplifying the labour laws to make them more flexible and also the implementation of a broad base simple GST regime with low rates, fewer exemptions and very few rates. I believe that this will unleash the true strengths of Indian economy in coming years.
 
Last but not the least we need to improve our judicial system which is clogged with huge pendency of cases which impacts the industry in getting a meaningful resolution to any disputes. For this we should strengthen the Arbitration mechanism in our legal system. This will also help in reducing corruption in the Indian system to a great extent.
 
I believe that we have in ourselves to overtake China in the race of becoming the manufacturing hub for the world as we have successfully achieved for the services sector in the past. We just need to be patient and address the above issues and believe in ourselves. 

The concept ‘Make in India’ has to be seen in light of major manufacturing geographies in the world. After China, India is the most populated, however the natural bounties in India are not high in India as compared to China. Given the constraints on natural resources, it would be prudent that India focuses more on ‘software’ rather on ‘hardware’. To my mind, the balance of 35:65 is certainly a good ratio. Given the ratio, the tax policy has to be drafted keeping the ratio of industry in mind. A charter should be prepared and dynamics of fiscal prudence and at same time fiscal incentive keeping the interest of all states in mind has to be embarked upon. The tax policy should be such that it achieves two major milestones - correction of regional imbalance and making exports competitive. If these two objectives start a journey, I think India can then dream of double digit growth and then social welfare that includes health, education, recreation and home to everyone can be achieved.

In my view the Government can give a push to the “Make in India” program by taking the following steps from a tax perspective: 
·  We need to simplify laws and remove unnecessary regulations to bring down the cost of compliance. For example, introduction of rational safe harbour norms under TP regulations for the manufacturing sector with dispensation for maintaining documentation can bring significant relief to the taxpayers. Similarly we can scrap the domestic TP regulations to facilitate ease of doing business.  
 
·   As originally envisaged in the Direct Tax Code Bill 2009, India needs to gradually reduce the corporate tax rate to 25% from the present level of 30% (excluding surcharge). This will make the manufacturing sector competitive vis-à-vis other countries in Asia.
 
·   The concept of Special Economic Zone (SEZ) was introduced in 2005 to promote export of products made in India through various concessions under direct as well as indirect tax laws. Though tax holiday for units in the SEZ is still available, subsequent introduction of Minimum Alternate Tax (MAT) on book profits and Dividend Distribution Tax (DDT) on income distributed as dividend led to a virtual paralysis of the scheme. We can revive manufacturing in SEZ by eliminating MAT/DDT altogether or by imposing a token levy. 
 
·   Often the taxpayers in India have to deal with conflicting views of tribunals/courts on a variety of topics. This leads to endless litigations (with consequent impact on costs) which can easily be avoided if the Central Board of Direct Taxes (CBDT) or the Central Board of Excise & Customs (CBEC) intervenes and issues circulars or clarifications to bring finality on interpretations.
 
·   In August 2013, the previous government set up a Tax Administration Reforms Commission (TARC) under the chairmanship of Dr. Parthasarathi Shome to study Indian tax administration operations and identify key areas of improvement. The committee presented its first report to the new Finance Minister earlier this year. The recommendations of the TARC include enhancing “customer focus”, lowering compliance costs and strengthening dispute resolution processes. Implementation of TARC’s recommendations in a time-bound manner will go a long way in not only reforming the tax administration but making taxpayers’ lives much easier.
 
·   One of the most significant reforms for which the entire business/investor community is keenly waiting since 2010 is implementation of Goods and Services Tax (GST). As GST will subsume most of the indirect taxes at the central (e.g. excise duty, service tax) and state (e.g. VAT; stamp duty) level, it will also improve the ease of doing business considerably by bringing down the incidence of multiple taxes. The Government has set a target of 2016 to launch GST … and this time we must make it happen.  
 
·   The Government must defer the General Anti Avoidance Rules (GAAR), due to kick in from 1^st April 2015, by at least three years. Ideally GAAR should be introduced only after the tax administration reforms are complete.

With the Indian Government having embarked on a highly progressive path, some key areas that need consideration, to be in line with its proposed policies, including ease of doing business, are as follows.
    •  Single window clearance: Policy once framed should have a consistent implementation and recognition across various Ministries. For instance, once status/approval is accorded by a Ministry, all other benefits/approvals dependent on such status, should also be attended to simultaneously. Should there be any specific requirements to be fulfilled, the same should be enabled involving a one-time effort and point of contact. The Government Departments may be organized to work together cohesively to address and redress compliances/approval in a comprehensive manner. Typical case for such requisite is the infrastructure status to Telecom infrastructure companies as provided by erstwhile Government, though the same was granted per RBI policy but this needs similar adherence in other statutes i.e. Income Tax Law, Banking Law..etc.
    •  Definition of Infrastructure may also be re-visited in light of it being a key area for the Make in India agenda. For instance, it may include Aviation.
    •  To promote “Make in India”, S.35AD may be extended to sectors, like Telecom Infrastructure, Aviation. While CSR has seen a significant thrust under Corporate Laws, the financial impact of CSR on a business due to tax inefficiency creates conflicting outcomes. Definition of CSR expenditure under Income Tax laws may be extended to qualifying CSR expenditure under Corporate Laws that should be tax deductible simpliciter or at a enhanced value to enthuse CSR adoption.
    •  GST rollout should be done at the earliest post dialogue and inputs from Industry. This is the major legislation change which is being promulgated hence it should be inline with the expectation of industry with no pitfalls which are prone to endless litigation.
    •  Last but not the least, the SEZ legislation may be revived with more stable tax regime with no counter-intuitive levies like MAT and Service Tax.