There is a two inch ditch just inside walls that lead to floor drain (8 3/4 inches square, with two inch round hole in center). Can I dig this up and replace with a sump pump? I get water backing up through drain during heavy rain that floods my basement (clear water)?

Are you on a septic tank or city sewer? Let me know, Tom

Are you on a septic tank or city sewer? Let me know, Tom I am on a city sewer and the water that comes up through my basement floor drain is clear and non-smelling. I also have a gutter downspout on either side of the house going into the ground.

If local codes allow you to discharge into the city sewer, (mine do not) then install your sump pump.
I would also construct a dry well, (see image) away from the house so the rain water from the gutters doesn't enter your basement, if you do that first you might not even need a sump pump. Good luck, Tom