Government approves conversion of MUDRA into bank

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The Cabinet today approved conversion of MUDRA Ltd, an NBFC, into MUDRA Bank and also setting up of a Credit Guarantee Fund for loans disbursed under the Pradhan Mantri Micro Units Development Refinance Agency (MUDRA) Yojana.

Prime Minister Narendra Modi cleared creation of a Credit Guarantee Fund for MUDRA loans and to convert MUDRA Ltd into MUDRA Small Industries Development Bank of India (SIDBI) Bank as a wholly owned subsidiary of SIDBI, an official statement said.

“The MUDRA (SIDBI) Bank will undertake refinance operations and provide support services with focus on portal management; data analysis etc apart from any other activity entrusted or advised by Government of India,” it said.

The Credit Guarantee Fund is expected to guarantee more than Rs 1 lakh crore worth of loans to micro and small units in the first instance, it said, adding it will help in reducing risk taken by banks and financial institutions in case of default under the scheme.

A Credit Guarantee Fund for MUDRA Units (CGFMU) for guaranteeing loans – sanctioned under the scheme with effect from April 8, 2015 – will be set up.

The National Credit Guarantee Trustee Company Ltd (NCGTC Ltd), a wholly-owned company of Government of India, constituted under the Companies Act to manage and operate various credit guarantee funds, shall be the Trustee of the Fund, it said.

The guarantee would be provided based on a portfolio basis to a maximum extent of 50 per cent of amount in default in the portfolio.

Three products available under the PM MUDRA Yojana are Shishu, Kishor and Tarun to signify the stage of growth and funding needs of the beneficiary micro unit or entrepreneur.

Shishu covers loans up to Rs 50,000 while Kishor covers above Rs 50,000 and up to Rs 5 lakh. Tarun category provides loans of above Rs 5 lakh and up to Rs 10 lakh.

MUDRA Bank and a Credit Guarantee Fund was proposed to be set up with a refinance corpus of Rs 20,000 crore and a corpus of Rs 3,000 crore respectively in the Budget 2015-16.

As a precursor to the launch of the Pradhan Mantri MUDRA Yojana (PMMY) in April 2015, MUDRA Ltd was set up as a corporate subsidiary of SIDBI in March 2015.

The RBI has allocated Rs 20,000 crore and the first tranche of Rs 5,000 crore has been received by MUDRA as refinance.

Source: http://economictimes.indiatimes.com/articleshow/50467753.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

ITR-V verification deadline extended to 31st January

by | posted in: Corporate Updates, Income Tax,e-Filing- Individuals, Firms, Companies | 0
If you missed your 120 days ITR-V verification deadline, there is good news. The income tax department has extended the verification deadline till 31st January.

If you missed your 120 days ITR-V verification deadline, there is good news. The income tax department has extended the verification deadline till 31st January.

Although it has not been officially notified yet, taxpayers have been receiving this information via email from the I-T department. However, you won’t be able to e-verify. Like old times, will have to physically mail the signed ITR V to CPC Bangalore.

“The electronic verification option gets switched-off automatically after 120 days of the taxpayer filing the return. However, the extended deadline to physically submit the ITR-V is open for all,” says Archit Gupta, founder and CEO, Cleartax.in. The 120 days countdown begins from the date the taxpayer submits their income tax returns forms.

The tax department had extended the filing deadline to September 7 this years. So, people who had filed on the last date still have a window of one day to e-verify. Post that you too will have to mail the ITR-V. The last date to do so will still remain 31st January.

Many individuals who, who had e-verified their return using Aadhar or Net banking, are receiving reminder letters from the CPC at Bangalore to physically send their ITR-V acknowledgement forms on or before the 31st of January, 2015.

“Those trying to e-verify their return once again with reference to the above are getting the message “No returns pending for e-verification” when they try to do so,” says Varun Advani, COO, makemyreturns.com. CAs advice them to re-send their ITR-Vs physically to the department before the deadline to aviod any further problems.

Foreign investors find Indian realty sector attractive again after 5 years

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At least Rs 14,680 crore of funds have been raised in sector so far in current investment cycle.

Foreign investors’ interest in Indian real estate is on the rise after almost five years, India-specific fundraisings indicate.

The cycle started gaining momentum just before the 2014 general elections and at least $2.2 billion (Rs 14,680 crore) of funds have been raised so far in the current investment cycle, indicating an improvement in foreign investors’ confidence in Indian real estate, said consultancy firm JLL India. “During the pre-GFC (global financial crisis) phase, 82% of funds got raised in US dollar.

This reduced to 57% in post-GFC phase when micro-market understanding was required more than banking on the macro-economy,” said Shobit Agarwal, managing director of capital markets at JLL India. “Interestingly, the contribution, 2014-onwards, has increased considerably to 70% – hinting that the positivity is here to stay for some time.”

Recent easing of foreign direct investments rules is expected to bring in more capital into the property sector. PE funds are also looking to leverage on this rising interest among foreign investors.

“We believe this is an opportune time to invest in Indian real estate, with rigorous risk management and strong asset management.

Offshore funds are showing interest in Indian real estate and there is lot of interest from FDI funds back in Indian real estate,” said Rubi Arya, chief executive of Milestone Capital Advisors. “We are planning to leverage further on our structured debt and commercial platform to raise money from offshore funds.”

According to Arya, FDI funds are looking to invest in pre-leased commercial assets, create strategic-level partnerships with reputed developers mainly through equity deals and make structured debt investments in residential projects.

India-specific cumulative fundraising attained its peak in the pre-GFC period. During this period between 2005 and 2008, there were 50 such funds that raised $16 billion in total. However, post-GFC, only 29 funds got raised in five years, with cumulative fundraising of $3.9 billion, said the JLL India report.

Not only has the volume of investment increased, but there has also been an increase in the average investment size from $134 million to $184 million in the current cycle that started in 2014.

Source: http://economictimes.indiatimes.com/articleshow/50476154.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Govt gets Rs 2,428 cr from black money disclosures

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The national exchequer received Rs 2,428.4 crore in payments from disclosures made during a three-month long compliance window under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act last year, bolstering tax revenue collections.

This is 97 per cent of the amount due from 644 declarations made from holders of black money stashed overseas by December 31, the last day of payment.

The amount included tax and penalty on the declarations made under the three-month compliance window that ended September 30 last year on total disclosures of Rs 4,147 crore.

This added to government’s gross tax revenue collection, which touched 66 per cent of Budget Estimates for the full financial year till December, a sharp uptick from 52.4 per cent till November.

Even as government targets a fiscal deficit of 3.9 per cent during 2015-16, it is expecting a shortfall of Rs 30,000-40,000 crore in direct taxes this financial year. Besides, lower than expected nominal GDP (gross domestic product) growth at close to eight per cent will exert further pressure on the fiscal deficit target.

“The amount collected under black money disclosure is Rs 2,428 crores (97 per cent of amount due) by December 31, which was the last date of payment. The total tax revenue collected up to December this year is Rs 9.5 lakh crore, 66 per cent of Budget Estimates,” said Revenue Secretary Hasmukh Adhia in a tweet.

Source: http://www.business-standard.com/article/economy-policy/govt-gets-rs-2-428-cr-from-black-money-disclosures-116010700025_1.html

Rs 8K cr credit guarantee funds for MUDRA, Stand Up India

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The Union Cabinet on Wednesday approved the setting up of two credit guarantee funds to facilitate loans to micro and small entrepreneurs through MUDRA (Micro Units Development Refinance Agency) and the Stand Up India scheme. The corpus of credit guarantee fund for MUDRA will be Rs 3,000 crore and for Stand Up India Rs 5,000 crore. Finance minister Arun Jaitley said these schemes will improve funding to micro and small entrepreneurs and help boost economic activity.

 

Under MUDRA, the agency refinances loans up to Rs 10 lakh to micro and small units, and has so far disbursed loans worth Rs 72,000 crore to 1.73 crore beneficiaries. MUDRA was launched in April last year.

 

The Stand Up India scheme seeks to provide refinance window through Small Industries Development Bank of India (SIDBI) with an initial amount of Rs 10,000 crore.

 

The Stand Up India scheme is distinct as its objective is to help entrepreneurs from scheduled castes, scheduled tribes and women entrepreneurs.

 

Each branch of all banks, including private banks, will fund at least two entrepreneurs in the SC/ST category and one in women category, Jaitley said. The government aims to refinance loans of 2.5 lakh borrowers in 36 months under Stand Up India. The credit guarantee fee under both the funds will be paid by the banks and not passed on to the borrowers, banking secretary Anjuly Chib Duggal said.

 

She said the National Credit Guarantee Trustee Company Ltd (NCGTC) would be the trustee for both the credit guarantee funds of MUDRA as well as Stand Up India.

 

The Stand Up India scheme will handhold borrowers both at the pre-loan stage and during operations. “This would include increasing their familiarity with factoring services, registration with online platforms and e-market places as well as sessions on best practices and problem solving,” the government said in a statement. Under the scheme, the margin money would be up to 25 per cent, while remaining would be funded by the bank.

 

The credit guarantee fund for MUDRA is expected to guarantee more than Rs 1 lakh crore worth of loans to micro and small units in the first instance, the government said. It will help in reducing risk taken by banks and financial institutions in case of default under the scheme. The government will provide guarantee on portfolio basis to maximum extent of 50 per cent of the amount in default in portfolio.

 

The Cabinet also approved conversion of MUDRA Ltd, currently a non banking finance company, into a bank called MUDRA-SIDBI Bank, a wholly owned subsidiary of SIDBI.

Source: http://indianexpress.com/article/business/business-others/rs-8k-cr-credit-guarantee-funds-for-mudra-stand-up-india/

India Inc takes to social causes (CSR)

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The move to make corporate social responsibility (CSR) spending mandatory has resulted in a spurt in social spending by India Inc. Spending on CSR activities by the top 100 companies increased to Rs 5,240 crore in 2014-15. The figure had stood at Rs 3,000 crore in 2012-13, when CSR spending was voluntary. Corporate governance firm Institutional Investor Advisory Services (IiAS) projects spending will increase to Rs 8,500 crore in the current financial year.

The Companies Act, 2013, requires companies above a certain financial threshold to spend at least two per cent of their average net profit of the preceding three years on CSR. Although CSR spending is compulsory, the Act has taken a ‘comply or explain’ approach, where a company has to provide reasons if the spending is less than the stipulated amount.

According to IiAS, CSR spends in FY15 were 26 per cent lower than the prescribed amount.

“Even as CSR is entering corporate consciousness, the next two to three years will remain a ‘learning period’ for industry,” the governance firm said in a note on Tuesday.

India Inc takes to social causes
IiAS has tracked the spending of BSE 100 companies, where 95 companies qualify under the profitability criteria for mandatory spending. The remaining five companies were not required to spend as they made average losses in the preceding three years.

State-owned firms set aside lesser amount compared to private sector firms. In FY13, public sector units (PSUs) spent 0.6 per cent of their average profits in the preceding three years. In comparison, non-PSUs spent one per cent of their average profit before tax of the preceding three years.

The trend continued in FY15. The CSR spends of the S&P BSE 100 companies aggregated 1.5 per cent of their three-year average profits. Non-PSUs spent 1.6 per cent and the 21 PSUs spent 1.3 per cent of their average profit in the preceding three years, IiAS noted.

Close to Rs 61 crore of the CSR spends by India Inc in FY15 was towards the Prime Minister’s National Relief Fund and seven companies contributed Rs 47 crore towards Swachh Bharat Kosh.

Source: http://www.business-standard.com/article/companies/india-inc-takes-to-social-causes-116010500776_1.html

E-Commerce Industry to Cross $38 Billion Mark in India

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India’s e-commerce market is likely to touch $38-billion-mark in 2016, a 67 per cent jump over the $23 billion revenue it clocked last year, according to the Associated Chambers of Commerce and Industry (Assocham).

“Increasing internet and mobile penetration, growing acceptability of online payments and favourable demographics has provided the e-commerce sector in India the unique opportunity to companies connect with their customers,” according to the Assocham’s latest report.

Buying trends during 2015 have witnessed a significant upward movement due to aggressive online discounts. India’s e-commerce market was worth about $3.8 billion in 2009, it went up to $17 billion in 2014 and to $23 billion in 2015 and is expected to touch $38-billion mark by 2016, said D.S. Rawat, Secretary General, Assocham.

Mobile commerce

Mobile commerce (m-commerce) is growing rapidly as a stable and secure supplement to the e-commerce industry. Shopping online through smart phones is proving to be a game changer and industry leaders believe that m-commerce could contribute up to 70 per cent of their total revenues, according to the report.

Mumbaikars had left behind all other cities in India shopping online in 2015. While Delhi residents rank second, Ahemdabad came third, Bangalore fourth and Kolkata fifth in their preference for online shopping in 2015.

“The customer is connected 24×7 through their smart phones, tablets and other mobile devices which is leading to a gradual evolution of e-commerce into mobile commerce and there is an issue of convenience which also leads to impulsive buying,” Mr Rawat said. The browsing trends, which have broadly shifted from the desktop to mobile devices in India, online shopping is also expected to follow suit, as one out of three customers currently makes transactions through mobiles in Tier-1 and Tier-2 cities. In 2015, 78 per cent of shopping queries were made through mobile devices, compared to 46 per cent in 2013, said Mr. Rawat.

The highest growth rate was seen in the apparel segment, almost 69.5 per cent over last year followed by electronic items by 62 per cent, baby care products at 53 per cent, beauty and personal care products at 52 per cent and home furnishings at 49 per cent. The most important contributing factor to the rapid growth of digital commerce in India is the increase in the use of smartphones. Mobiles and mobile accessories have taken up the maximum share of the digital commerce market in India, according to the paper.
Online shoppers

Almost 45 per cent of online shoppers reportedly preferred cash on delivery mode of payment over credit cards (16 per cent) and debit cards (21 per cent).

Only ten per cent opted for internet banking and a scanty seven per cent preferred cash cards, mobile wallets and other such modes of payment.

As per the findings, many small companies have also established online stores for group buying, which enable customers to obtain goods at a discount so long as a certain number of people make the purchases.

Shopping centres, whole sale markets and supermarkets should create their online stores to reduce costs and develop product-tracking systems, Mr Rawat said.

Among the age segments, the 18-25 years age group was the fastest growing age segment online with user growth being contributed by both male and female segments, it was said in the paper.

The survey highlights that three per cent of regular shoppers are in 18-25 age group, 52 per cent in 26-35, eight per cent in 36-45 and two per cent in the age group of 45-60.

Sixty-five per cent of online shoppers are male with females constituting 35 per cent. The products that were sold most in 2015 were mobile phones, iPad and accessories, MP3 players, digital cameras and jewellery, among others.

As per the study, there would be more than a five to seven-fold increase in revenue generated through e-commerce compared to last year with all branded apparel, accessories, jewellery, gifts, footwear available at a cheaper rates and being delivered at the doorstep. The most popular among the e-commerce websites — Snapdeal, Myntra, Flipkart, Amazon, Jabong and others — have been doling out massive price cuts or discounts on purchase of popular brands of apparels, footwear, electronic goods, coinciding with the year end.

According to the report, the one of the driving factors for the online shopping is the age profile of the consumers who are young, between 15-35 years. This segment is quite net savvy and enjoys doing new type of shopping experience, virtually from their desk top in office, lap tops at home or even Android-based phones.

Source: http://www.thehindu.com/business/ecommerce-industry-to-cross-38-billion-this-year-assocham/article8058892.ece