India’s GDP amounted to $2.597 trillion at the end of last year, against $2.582 trillion for France
India has become the world’s sixth-biggest economy, pushing France into seventh place, according to updated World Bank figures for 2017. India’s gross domestic product (GDP) amounted to $2.597 trillion at the end of last year, against $2.582 trillion for France. India’s economy rebounded strongly from July 2017, after several quarters of slowdown blamed on economic policies pursued by Prime Minister Narendra Modi’s government.
India, with around 1.34 billion inhabitants, is poised to become the world’s most populous nation, whereas the French population stands at 67 million. This means that India’s per capita GDP continues to amount to just a fraction of that of France which is still roughly 20 times higher, according to World Bank figures.
Manufacturing and consumer spending were the main drivers of the Indian economy last year, after a slowdown blamed on the demonetisation of large banknotes that Modi imposed at the end of 2016, as well as a chaotic implementation of a new harmonised goods and service tax regime.
India has doubled its GDP within a decade and is expected to power ahead as a key economic engine in Asia, even as China slows down.
According to the International Monetary Fund, India is projected to generate growth of 7.4% this year and 7.8% in 2019, boosted by household spending and a tax reform. This compares to the world’s expected average growth of 3.9%.
The London-based Centre for Economics and Business Research, a consultancy, said at the end of last year that India would overtake both Britain and France this year in terms of GDP, and had a good chance to become the world’s third-biggest economy by 2032.
At the end of 2017, Britain was still the world’s fifth-biggest economy with a GDP of $2.622 trillion. The US is the world’s top economy, followed by China, Japan and Germany.
Ahead of China, India to remain fastest growing economy in FY19 & FY20
India will continue to be the fastest growing major economy, ahead of China, with 7.3% growth rate in 2018-19 and 7.6% in 2019-20, the Asian Development Bank (ADB) said on Thursday.
The growth in India will be driven by increased public spending, higher capacity utilisation rate and uptick in private investment, said the ADB supplement to the Asian Development Outlook (ADO).
While retaining India’s growth rate for current fiscal and the next, ADO said economic growth in China would decelerate to 6.6% in 2018 and further to 6.4% in 2019. China’s growth rate was 6.9% in 2017.
On India, it said: “In sum, the GDP growth forecast for FY2018 (ending March 2019) is maintained at 7.3%. Growth in FY2019 is expected to rise to 7.6% as measures taken to strengthen the banking system bolster private investment and as benefits kick in from the goods and services tax. Any further increase in oil prices poses a downside risk to growth.”
The ADB said India was the dominant economy in the South Asia sub-region with its growth gaining momentum at 7.7% in the last quarter ended March of 2017-18, the highest rate of growth since first quarter of 2016-17.
This pushed full-year growth to 6.7% (2017-18), a tad higher than estimated in ADO 2018, largely driven by government spending for both consumption and public administration.
“In the first half of 2018-19, the growth rate is expected to benefit from a low base. Other key drivers of growth include an uptick in public consumption, which is typical before elections, and a recovery in exports following shortages of working capital related to a new goods and services tax,” said the ADO supplement.
In India, the private consumption is expected to grow at a healthy rate as disruption caused by demonetisation in 2016 fades. Capacity utilisation rates are at their highest in four years and should provide incentives to firms to invest.
Growth in Asia and the Pacific’s developing economies for 2018 and 2019 will remain solid as it continues apace across the region, despite rising tensions between the US and its trading partners.
“South Asia, meanwhile, continues to be the fastest growing sub-region, led by India, whose economy is on track to meet fiscal year 2018 projected growth of 7.3% and further accelerating to 7.6% in 2019, as measures taken to strengthen the banking system and tax reform boost investment,” it said further.
Developing Asia is largely on track to meet growth expectations as set out in April in Asian Development Outlook 2018 (ADO 2018), said the report. The regional gross domestic product (GDP) is forecast to expand by 6% in 2018 and 5.9% in 2019, the rate envisaged in April, ADO supplement said.
In April, ADO had said that India’s economic growth would rise to 7.3% this fiscal and further to 7.6% in the next financial year, retaining the fastest-growing Asian economy tag, on back of GST and banking reforms.
“Although rising trade tensions remain a concern for the region, protectionist trade measures implemented so far in 2018 have not significantly dented buoyant trade flows to and from developing Asia,” said ADB chief economist Yasuyuki Sawada. “Prudent macroeconomic and fiscal policy-making will help economies across the region prepare to respond to external shocks, ensuring that growth in the region remains robust,” he added.
ADO has also retained the combined growth forecast for the major industrial economies — the US, the Euro zone and Japan — as growth in the US and the Euro area remains robust.
In Japan, though, unanticipated contraction in the first quarter prompts slight revision of the 2018 growth forecast, it added.
However, ADB said that the rise in protectionist trade measures from the US and countermeasures from China and other countries “poses a clear downside risk to the outlook for developing Asia”.
The ADO supplement has factored in the tariffs imposed by July 15.
“The risk of further ratcheting up of protectionist measures could undermine consumer and business confidence and thus developing Asia’s growth prospects,” ADB said.
On price rise front, ADO has raised the South Asia inflation forecast to 5 per cent from 4.7 per cent, mainly to accommodate an increase in the forecast for India, but kept at 5.1 per cent for 2019.
“The upgrade in the 2018-19 inflation forecast for India from 4.6 per cent to 5 per cent responds to higher oil prices, significant depreciation of the Indian rupee in the past few months, and generous increases announced on 4 July in minimum support prices for summer crops,” the ADO said.
For developing Asia, it has revised down inflation projections from 2.9 per cent to 2.8 per cent in 2018 and from 2.9 per cent to 2.7 per cent in 2019 citing domestic factors to help contain inflationary pressures.
“As the US monetary policy normalises, central banks in the region act to spare their currencies’ sharp depreciation and to subdue inflation. Further, some governments have reintroduced subsidies to contain the effects of rising food and oil prices.”
SEBI has proposed giving the board of directors of the company the authority to take appropriate action after conducting an investigation against the individual or firm that violates any regulations or submits a false certificate or report.
India’s capital market regulator has proposed amendments to tighten laws governing auditors and other third-party individuals hired by listed companies for auditing financial results, among other things.
The Kotak Committee, formed to come up with proposals for improving corporate governance, last year recommended that the Securities and Exchange Board of India (SEBI) should have clear powers to act against auditors and other third-party individuals or firms with statutory duties under the securities law.
Auditing lapses have caused several frauds to go unnoticed for years and the capital market regulator has had no direct control on the auditing firms.
SEBI has proposed giving the board of directors of the company the authority to take appropriate action after conducting an investigation against the individual or firm that violates any regulations or submits a false certificate or report.
The proposed changes come months after Punjab National Bank, India’s second largest state-run lender, stunned markets after uncovering a $2 billion loan fraud that had gone undetected for years.
Merchant bankers, credit rating agencies, custodians, among others, are registered and regulated by SEBI but chartered accountants, company secretaries, valuers and monitoring agencies do not come under any direct regulators.
The amendments would mean auditors must ensure certificates or reports issued by them are true in all material respects and they must exercise all due care, skill and diligence with respect to all processes involved in issuance of the report or certificate.
The auditors would be responsible to report in writing to the audit committee of the listed company or the compliance officer on any violation of the securities law they noticed.
In January, SEBI barred Price Waterhouse from auditing listed companies in India for two years after an investigation into a nearly decade-old accounting fraud case in a software services company that became India’s biggest corporate scandal.
SEBI has sought feedback and comments on the draft regulations over the next 30 days.
ICAI have launched Unique Document Identification Number (UDIN) facility which is a unique number, which will be generated by the system for every document certified/ attested by a Chartered Accountant and registered with the UDIN portal available at https://udin.icai.org/ with effect from 1st July 2018.
It has been noticed that financial statements and documents were being certified/attested by third persons, in lieu of Chartered Accountants. As these statements are being relied upon by the authorities as true statements and certificates, UDIN can be generated by a practicing CA by registering his/her documents/ certificates on UDIN Portal for verification.
A practicing Chartered Accountant can generate a UDIN for certificate/ document attested by him either in individual capacity or as a partner.
At present, this facility is recommendatory. But ICAI is mulling to make the same compulsory in near future, so as to curb the menace of fake or forged documents.
No change is possible in the data already registered by a Chartered Accountant in the online system. Therefore, members are requested to thoroughly check the details in preview option before submission of their application.
Information filled in can be edited/ modified any number of times before the submission. But once it is submitted, it cannot be edited.
The UDIN once generated can be withdrawn or cancelled with narration. Hence if any user search for this UDIN, appropriate narration indicated by Member with the date of revoke will be displayed for reference.
The Securities and Exchange Board of India (Sebi) on Thursday eased several rules relating to Initial Public Offers (IPO), rights issues, buybacks and takeovers. The regulator’s board approved these changes as also those relating tenures of managing directors of market intermediaries. The capital markets watchdog reduced the time for announcing the price band of initial […]The Securities and Exchange Board of India (Sebi) on Thursday eased several rules relating to Initial Public Offers (IPO), rights issues, buybacks and takeovers.
The regulator’s board approved these changes as also those relating tenures of managing directors of market intermediaries. The capital markets watchdog reduced the time for announcing the price band of initial public offers (IPO) from five working days before the opening of the issue to two working days. This will give companies more time to fix the price band.
Companies now need to provide investors with financial disclosures — for public issues and rights issues — for only three years. Currently, information is provided in the offer documents for five years. Also, companies need to provide only consolidated audited financial disclosures in the IPO offer document; audited standalone financials of the issuer and subsidiaries must be disclosed on the company website.
Following a board meeting on Thursday, the capital markets regulator tweaked the buyback norms. The buyback period has been defined as the time between the board resolution or the date of declaration of results for a special resolution authorizing the buyback of shares and the day on which the shares are paid.
Also, Sebi has amended the takeover rules. It has given companies additional time to revise the open offer price upwards till one working day before the start the tendering period.
The Sebi board also approved some recommendations of R Gandhi committee on regulations relating to market infrastructure institutions (MIIs). For rights issues the threshold for submission of the draft letter of offer to Sebi has been increased to Rs.10 crore as against the earlier prescribed Rs 50 lakh. The regular also tweaked the rules relating to the underwriting of all non-SME public issues. If 90% of the fresh issue of share is subscribed, the underwriting will be restricted to that portion only. Accordingly, the requirement to underwrite 100% of the issue without regard to the minimum subscription requirements has been deleted.
Sebi also reduced minimum anchor investor size to Rs 2 crore from the existing Rs 10 crore, for SME issuances. This will allow companies to attract more anchor investors for an issue.
The board has permitted eligible domestic and foreign entities to hold up to 15% shareholding in case of Depository and Clearing Corporation. Moreover, multilateral and bilateral financial institutions, as notified by the government, have also been recommended to hold up to 15% in an MII. Moreover, Sebi has decided to limit the tenure of managing directors of an MII for a for a maximum of two terms of up to 5 years each or up to 65 years of age, whichever is earlier. The requirement would also apply to incumbent MDs of MIIs.
The regulator is also looking into the issues regarding IPO ICICI Securities in ICIC AMC bought the large stake.The regulator had sought details of a significant investment made by ICICI Prudential Mutual Fund in the IPO of ICICI Securities. “Yes we are looking into that, and we have sought some information from them, and we are yet to get their replies,” Tyagi said.
Last week, the Parliament cleared a bill to further amend the Companies Act.
The financial statements and annual returns of all company must be filed on time with the ROC / MCA each year. As per Companies Act, 2013, non-filing of annual return is an offence, consequences of which affect the directors, as well as the company.
Hence, it is a must for every company to file with the MCA:
1. The annual return within 60 days of the Annual General Meeting and
2. The Financial Statement, within 30 days of the Annual General Meeting.
The various consequences and the penalties for not filing annual return of a company (Forms MGT-7 & AOC-4) are highlighted here.
A. Consequences – for Directors
The Directors of a company are responsible for ensuring the compliance of the company with all applicable rules and regulations. When a company defaults on compliance or dues payable, the Directors are held responsible for the default. The following are penal consequences for a Director of a company for default of non-filing of the Annual Return.
Director Disqualification
In case a company has not been filed its Annual Return for three continuous financial years, then every person who has been a director or is currently the director of the specific company could be disqualified under the Companies Act, 2013. If a Director is disqualified, his/her DIN would become inactive and the person would not be eligible to be appointed as a Director of any company for a period of five years from the date of disqualification. Further, disqualified Directors would not also be allowed to incorporate another company for a period of five years.
Fine & Imprisonment
A director of the company can be punished if the company has not been filed even after 270 days from the date when the company should have originally filed with additional penalty. Any Director who has defaulted in the filing of annual return of a company can also be penalized with an imprisonment of a term extended up to six months or with a fine of an amount not lesser than fifty thousand rupees and it might extend up to five lakh rupees, or with both imprisonment and fine. However, this provision provided under the Companies Act, 2013 is rarely used.
In addition, if any information filed by a Director or any other person in the annual return is false by any nature or if he/she failed to mention any fact or material that is true can be punished with imprisonment for a term which is not lesser than six months and which could extend up to 10 years. Further, he/she can also be liable for payment of a fine which is not lesser than the amount subject to the fraud involved and it may extend to an amount three times of the sum concerned with the fraud.
B. Consequences of Default – For Company
The following are some of the penal consequences for a company that has not filed its annual return:
Penalty
Normally, the Government fee for filing or registering any document under the Companies Act required or authorized to be filed with the Registrar is Rs.200. A private limited company would be required to file form MGT-7 and form AOC-4 each year and the government fee applicable if filed on time would be Rs.400. In case of delay in filing of annual return, the penalty as mentioned would be applicable:
The penalty for not filing a company’s annual return (Form MGT-7 and Form AOC-4) is increased to Rs.100 per day w.e.f.July 1, 2018.
Strike-Off
In case the company has not filed its Annual Return for the last two financial years continuously, then such companies would be termed as an “inactive company”. On such a classification, the bank account of the company could be frozen. Further, the Registrar could also issue a notice to the Company and initiate strike-off of the company from the MCA records.
In case you need any assistance to file annual return for your company, you can contact us at Director@Sunkrish.com
Taxpayer would be required to approach the concerned jurisdictional tax officer to get the password for the GST Identification Number (GSTIN) allotted to the business
The Finance Ministry on Thursday said that GST registrants can approach jurisdictional tax officer with valid documents to change the e-mail and mobile number recorded against their GST identification number (GSTIN).
The revenue department had received complaints from taxpayers that the intermediaries who were authorised by them to apply for registration on their behalf had used their own e-mail and mobile number during the process.
These intermediaries are not sharing the user details with the taxpayers.
“With a view to address this difficulty of the taxpayer, a functionality to update e-mail and mobile number of the authorised signatory is available in the GST system.
“The e-mail and mobile number can be updated by the concerned jurisdictional tax authority of the taxpayer,” the ministry said in a statement.
Taxpayer would be required to approach the concerned jurisdictional tax officer to get the password for the GSTIN allotted to the business. Taxpayers can check jurisdiction through ‘Search Taxpayer’ option available on GST portal.
Taxpayer would be required to provide valid documents to the tax officer as proof of his/her identity and to validate the business details related to his GSTIN. Following this, the officer would authenticate the activity and enter the new e-mail address and mobile number provided by the taxpayer.
After uploading of the documents, tax officer will reset the password for GSTIN in the system and username and temporary password reset will be communicated to the e-mail address as entered by the officer.
Taxpayer would then have to login on GST portal using the username and temporary password e-mailed to him. The username and password can now be changed by the taxpayer.
