India jumps 30 places on World Bank’s ease of doing business index, breaks into top 100

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Economy, Business Updates, Corporate Affairs | 0
The World Bank’s ease of doing business report showed that eight reforms were key in helping businesses in 2016/17. India is also among the 10 economies to have improved the most, alongside El Salvador, Malawi, Nigeria and Thailand.

Doing business in India became much easier over the past one year because of a raft of policy reforms, an annual World Bank index showed on Tuesday, in what is possibly a shot in the arm for Prime Minister Narendra Modi’s efforts to win big-ticket investments.

For the first time, India jumped 30 places to break into the top 100 in the ease of doing business rankings for the year to June 2017. The 190-country index is an influential barometer of competitiveness among countries that likely also helps businesses make investment decisions.

India’s impressive performance was largely due to reforms in taxation, insolvency laws and access to credit, part of measures Prime Minister Modi’s government has pushed to boost investment and jobs that would help absorb a million people who join the workforce every month.

“India’s performance is not based on efforts of just one year but consistent efforts made over the last three years to continuously improve the regulatory environment of doing business,” Annette Dixon, vice president South Asia, told a press conference.

“It is the result of a number of reforms that the government has undertaken that India is becoming a preferred destination to do business.”

India saw improvements in six of 10 indicators, including on winning construction permits, enforcing contracts, paying taxes and resolving insolvency. It, however, slipped when it came to starting a business, getting an electricity connection, cross-border trade and registering property.

Underlining how reforms had helped India improve its overall ranking, the World Bank said the establishment of debt recovery tribunals reduced non-performing loans by 28% and lowered interest rates on larger loans, suggesting that faster processing of debt recovery cases cut the cost of credit.

India was also among the 10 economies to have improved the most, alongside El Salvador, Malawi, Nigeria and Thailand.

– Hindustan Times

IMF says global growth recovery an opportunity for Indian economy

by | posted in: Corporate Updates, Economy, Business Updates, Corporate Affairs, India & International - Corporate updates | 0
IMF expects the Indian economy to recover sharply in 2018 to grow at 7.4%, though 30 basis points lower than its earlier estimate in April.

The International Monetary Fund (IMF) on Tuesday pared its growth forecast for the Indian economy by half a percentage point to 6.7% for 2017, blaming the lingering disruptions caused by demonetisation of high value currencies last year and the roll out of the Goods and Services Tax (GST).

However, IMF said the structural reforms undertaken by the Prime Minister Narendra Modi-led government would trigger a recovery—above 8% in the medium term.

In its latest World Economic Outlook, IMF said the global economy is going through a cyclical upswing that began midway through 2016. It raised the global growth estimate marginally for 2017 to 3.6% while flagging downside risks. The upward revisions in its growth forecasts including for the euro area, Japan, China, emerging Europe, and Russia more than offset downward revisions for the United States, the United Kingdom, and India.

“In India, growth momentum slowed, reflecting the lingering impact of the authorities’ currency exchange initiative as well as uncertainty related to the midyear introduction of the countrywide Goods and Services Tax,” it said in the WEO.

However, IMF expects the Indian economy to recover sharply in 2018 to grow at 7.4%, though 30 basis points lower than its earlier estimate in April.

One basis point is one-hundredth of a percentage point.

In its South Asia Economic Focus (Fall 2017) released on Monday, the World Bank reduced India’s GDP growth forecast to 7% for 2017-18 from 7.2% estimated earlier, blaming disruptions caused by demonetisation and GST implementation, while maintaining at the same time that the Indian economy would claw back to grow at 7.4% by 2019-20.

Both the Asian Development Bank as well as the Organisation for Economic Cooperation and Development (OECD) have also cut their growth projections for India to 7% and 6.7%, respectively, for fiscal 2017-18.

IMF said a gradual recovery in India’s growth trajectory is a result of implementation of important structural reforms. GST, “which promises the unification of India’s vast domestic market, is among several key structural reforms under implementation that are expected to help push growth above 8% in the medium term,” it added.

The multilateral lending agency said India needs to focus on simplifying and easing labour market regulations and land acquisition procedures which are long-standing requirements for improving the business climate. It also called for briding the gender gap in accessing social services, finance and education to accelerate growth in developing countries like India.

IMF said given faster-than-expected declines in inflation rates in many larger economies, including India, “the projected level of monetary policy interest rates for the group is somewhat lower than in the April 2017 WEO.”

In its monetary policy review last week, the Reserve Bank of India (RBI) kept its policy rates unchanged and marginally raised its inflation forecast for rest of the year.

Highlighting the growing income inequality within and among emerging market economies, IMF said a country’s growth rate does not always foretell matching gains in income for the majority of the population. “In China and India, for example, where real per capita GDP grew by 9.6% and 4.9% a year, respectively, in 1993–2007, the median household income is estimated to have grown less—by 7.3% a year in China and only 1.5% a year in India,” it said.

Source: Live Mint

FDI likely to rise further after GST: Moody’s

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Economy, Business Updates, Corporate Affairs, India & International - Corporate updates | 0
FDI in India grew by 18% during 2016 to touch $46 billion, data released by the Department of Industrial Policy and Promotion showed.

India is likely see increased foreign direct investment (FDI) inflows on the back of reforms such as introduction of the goods and services tax and the bankruptcy code, international ratings agency Moody’s said in a report on Monday.

“Combined with reforms such as the introduction of a goods and services tax, which lowers the cost and complexity of doing business, and a simplified and clarified bankruptcy code, FDI is likely to rise further,” the agency said in its report on how structural reforms by Asia Pacific sovereigns could become more effective from stronger global demand.

In India, Moody’s said, the government has raised ceilings for authorised FDI in a number of sectors. “FDI has already increased substantially, albeit from a low base,” the report said.FDI in India grew by 18% during 2016 to touch $46 billion, data released by the Department of Industrial Policy and Promotion showed.

The Narendra Modi government has liberalised FDI framework for a number of sectors including insurance, defence and civil aviation and also taken steps towards the ease of doing business. Moody’s said the positive economic impact of India and Indonesia’s measures to attract higher levels of FDI, combined with steps to improve business conditions, are likely to be more apparent in a stronger global macroeconomic environment. The agency has maintained India’s sovereign rating at Baa3 positive.

“India and Indonesia’s governments have both implemented reforms over the past few years to improve the overall business climate and, more specifically, to attract FDI,” Moody’s said, adding that a robust global environment is likely to amplify the positive impact of the reforms on the two countries’ attractiveness to foreign investors.

Moody’s Investors Service said the strengthening in global demand since the end of last year has buoyed Asia Pacific’s trade-reliant economies, but added that faster export growth has yet to feed into a sustainable acceleration in output growth.

CBEC plans strategy to bring more businesses in GST net

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Economy, Business Updates, Corporate Affairs, Income Tax,e-Filing- Individuals, Firms, Companies | 0

Tax officials are working out strategies to encourage more businesses to register for the Goods and Services Tax (GST) and further increase the taxpayer base.

At present, there are about 90 lakh businesses registered to file returns and pay taxes under the new levy, which kicked in from July 1.

But, the Central Board of Excise and Customs will now also encourage small businesses and dealers, who may be exempt from registering for GST.

“We plan to increase awareness of even small businesses about the benefits of GST and why they should register,” said a senior official, pointing out that in the long run it will be beneficial to them as suppliers would only choose to buy from those businesses from where they can get input tax credit.

Further, in some cases tax officials may also verify whether businesses that were paying taxes earlier have registered for GST.

Officials believe that as the new tax system stabilises, more businesses will register under GST, taking the tax base to over one crore in the next one year, if not before.

At present, businesses with an annual turnover of up to ₹20 lakh (or ₹10 lakh in some States) are exempt from registering for GST.

Though the number of taxpayers registered with the GSTN is much higher than the original estimate of about 80 lakh, Prime Minister Narendra Modi had, at the recent Rajaswa Gyan Sangam, urged the Centre and State tax officials to further expand the tax base under GST.

“To enable all traders to take maximum benefit of GST, we should work towards ensuring that all traders, including even relatively smaller traders with a turnover below ₹20 lakh, should register with the GST system,” he had said, asking officials to further increase the taxpayer base.

The issue was also then followed up by Prime Minister’s Office. Also Cabinet Secretary PK Sinha and Revenue Secretary Hasmukh Adhia, at a recent video-conferencing meeting with Centre and State tax officials, assessed the roll out of the new levy and measures to increase the tax base.

Source: The Hindu Business line

Nuclear deal between India and Japan opens up new vistas of cooperation

by | posted in: Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Economy, Business Updates, Corporate Affairs, India & International - Corporate updates | 0

Prime Minister Shinzo Abe is visiting India nearly two months after operationalisation of the historic Indo-Japan civil nuclear deal, which has added a new dimension to bilateral ties that could scarcely be imagined in the wake of the 2011 Fukushima tragedy.

The journey traversed by the two nations over the past six years reflects growing confidence in each other and depth of the strategic partnership.

Japan and India signed a memorandum of understanding for civil nuclear cooperation in December 2015, when Abe was in Delhi for the annual bilateral summit, overcoming reservations over India’s status as a nation which has not signed the Non-Proliferation Treaty.

This was transformed into a deal in November last year when PM Narendra Modi was in Tokyo for the summit.

Subsequently the Japanese government got approval from the Diet (parliament) for the nuclear deal with India.The landmark deal came into force in July this year with the completion of necessary formalities in both countries. This will enable Japan to export nuclear power plant technology as well as provide finance for nuclear power plants in India.

Besides, Japan will assist India in nuclear waste management and may undertake joint manufacture of nuclear power plant components under Make in India initiative, people familiar with the development told ET. Growing civil nuclear ties will be highlighted during Abe’s trip as one of the key elements of Indo-Japan strategic partnership, they said.

Japanese conglomerate Toshiba, which owns US-based Westinghouse, will have a major role when the US nuclear firm supplies technology for the set of six reactors in Andhra Pradesh following its bankruptcy.

Westinghouse, which was to set up six nuclear reactors in Andhra Pradesh, will supply technology while construction will be undertaken by an Indian partner. This was discussed as a way out during Modi’s visit to Washington, D.C. for ensuring the presence of Westinghouse in India following the troubles the company faced over bankruptcy.

The finance for the project from the US Exim Bank remains intact and the initiative may kick-start only in 2018. Westinghouse, which was acquired by Japanese conglomerate Toshiba in 2006 for $5.4 billion, had filed for bankruptcy in March this year. HitachiBSE 2.80 %, another Japanese firm, has a stake in GE, which is also proposed to set up reactors in India.
ET View: Enhance areas of partnership

The partnership in space, like that on the African continent, will give a new dimension to the longstanding India-Japan ties. It makes sense for India to partner with Japan to focus such opportunities in areas where the two countries have complementary strengths. The space partnership will serve as another plank in the effort to present a counter to Beijing. For New Delhi, it is also a spring board for a bigger role in the global arena. India must seize this opportunity with a clear plan.

India, Japan Ink 15 Agreements Including Aviation, Trade and Science

by | posted in: Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Economy, Business Updates, Corporate Affairs, India & International - Corporate updates | 0
The pact in the area of disaster risk management, entered into between the Ministry of Home Affairs and the Cabinet Office of the Government of Japan, aims to cooperate and collaborate in the field of disaster risk reduction, an official statement said

India and Japan on Wednesday signed 15 deals in key areas, including civil aviation, trade, science and technology, and skill development.

The pact in the area of disaster risk management, entered into between the Ministry of Home Affairs and the Cabinet Office of the Government of Japan, aims to cooperate and collaborate in the field of disaster risk reduction, an official statement said.

It said the understanding in the field of skill development looks to further strengthen bilateral relations and cooperation in the field of Japanese language education in India.

The one titled ‘India-Japan Investment Promotion Road Map’ envisages enhanced Japanese investments in India while the ‘Japan-India special programme for Make In India’ is on bilateral cooperation towards infrastructure development in the Mandal Bechraj-Khoraj region in Gujarat.

There was exchange of RoD (Record of Discussions) on civil aviation under which Indian and Japanese carriers can now mount unlimited number of flights to selected cities in both countries.

There was an agreement to establish a joint exchange programme to identify and foster talented young scientists from both countries to collaborate in the field of theoretical biology.

The MoU (Memorandum of Understanding) between the Department of Biotechnology and Japan’s National Institute of Advanced Science & Technology (AIST) seeks to promote research collaboration between these institutions in the field of life sciences and biotech, the statement said.

The India Japan Act East Forum, among the agreements signed, seeks to enhance connectivity and promote developmental projects in India’s North Eastern region in an efficient and effective manner, it said.

There were four agreements in the field of sports, including one to facilitate and deepen international education cooperation and exchanges between both Sports Authority of India and Nippon Sport Science University, Japan.

Source: NDTV

Centre asks banks to restrict accounts of 2.09 lakh firms

by | posted in: Company Incorporations, e-filing of MCA Returns, Corporate & Business Advisory Services, Corporate Updates, Economy, Business Updates, Corporate Affairs | 0

The finance ministry has advised all banks to take immediate steps to restrict transactions in bank accounts of more than 2.09 lakh companies, whose names have been struck off the Register of Companies.

Banks have also been advised to step up due diligence while dealing with all firms in general and been alerted that even if a firm is ‘active’ in the corporate affairs ministry database, it should be seen with ‘suspicion’ if it has failed to file statements or returns.

‘Not compliant’

“…Prima facie, the company is not complying with its mandatory statutory obligations to file this vital information for availability to its stakeholders,” the finance ministry has reasoned.

On July 1, Prime Minister Narendra Modi had first revealed the government’s decision to cancel the registrations of one lakh companies that had suspicious and questionable operations, identified on the basis of data mined from the deposit of bank notes following last November’s demonetisation of Rs.500 and Rs.1,000 notes.

The PM had promised more action would follow on two lakh similar firms and 38,000 shell companies. Tuesday’s statement reveals that progress has been made in scrapping another 1,09,032 firms under the Companies Act since then.

‘Directors barred’

“The existing directors and authorised signatories of such struck-off companies will now become ex-directors or ex-authorised signatories. These individuals will therefore not be able to operate bank accounts of such companies till such companies are legally restored under Section 252 of the Companies Act by an order of the National Company Law Tribunal,” the ministry said, disclosing ‘stepped up decisive action’ against errant companies.

“Since such ‘struck off’ companies have ceased to exist, action has been initiated to restrict the operation of [their] bank accounts. The Department of Financial Services has, through the Indian Banks Association, advised all banks … [to] take immediate steps to put restrictions on bank accounts of such struck-off companies,” the ministry said, adding that the list of firms had been put up on the corporate affairs ministry’s website.

In addition, the statement said that banks had been advised to go in for ‘enhanced diligence while dealing with companies in general.’

“A company… even having an active status on the website of the Ministry of Corporate Affairs but defaulting in filing of its due financial statement/s or annual return/s in particular of charges on its assets on the secured loan should be seen with suspicion…” the ministry has told banks.

Source: The Hindu