India will be home to 10,500 start-ups by 2020: Report

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India continues to harbour the third largest start-up base, marginally behind the U.K., according to a Nasscom-Zinnov start-up report.

The report, titled “Indian Start-up Ecosystem Maturing – 2016,” says that the ecosystem is poised to grow by an impressive 2.2X to reach more than 10,500 start-ups by the year 2020 despite the popular belief that the Indian start-up ecosystem is slowing down.

There is an increased interest from student entrepreneurs this year, according to the report. A remarkable growth of 25 per cent has been witnessed in 2016 with over 350 ventures founded by young students. The median age of start-up founders has reduced marginally from 32 years in 2015 to 31 years in 2016.

“Technology start-ups are creating a new identity for India and its technological prowess,” said R. Chandrashekhar, President of the IT industry body Nasscom, in a statement. “They are defining the way the world operates making life better and easier for people and businesses alike.”

Some of the notable findings of the report include; continued growth in the number of start-ups in 2016, with Bengaluru, the National Capital Region, and Mumbai continuing to lead as major start-up hubs for the nation.

In terms of vertical growth, investors are looking at the domains like health-tech, fin-tech, and edu-tech. With a total funding of approximately $4 billion, close to 650 young firms were funded signifying an aware and healthy growth of the ecosystem, according to the report.
The number of technology firms in India is expected to grow by 10-12 per cent to over 4,750 start-ups by the end of 2016, according to the report. Interestingly over 1400 new ventures have emerged in 2016 denoting that the ecosystem is becoming prudent with both investors and start-up founders focusing on profitability and optimising the overall spend.

With this impetus, India will become home to over 10,500 start-ups by 2020, employing over 210,000 people reveals the report.

“Today, India is brimming with new ideas which need the right guidance and funding to be scalable for the market,” said C.P. Gurnani, Chairman, Nasscom, in a statement.

Source: http://www.thehindu.com/business/Industry/india-will-be-home-to-10500-startups-by-2020-report/article9272293.ece

India ranks 130th in ease of doing business index

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India continues to rank low at 130th position in terms of ease of doing business, with the country seeing little or no improvement in dealing with construction permits, getting credit and other parameters.

In the World Bank’s latest ‘Doing Business’ report, India’s place remained unchanged from last year’s original ranking of 130 among the 190 economies that were assessed on various parameters. However, the last year’s ranking has been now revised to 131 from which the country has improved its place by one spot.

The government has been making efforts to further improve the ease of doing business and aims to bring the country in the top 50.

Expressing disappointment over no change in India’s ranking in the World Bank’s index on ease of doing business, Indian government regretted that the report did not take into consideration 12 key reforms undertaken by the government.

When it comes to ‘distance to frontier’ — a measurement of the gap between an economy’s performance and the best practice score of 100 — India’s score has improved to 55.27 this year from 53.93 last year.

India is the only country for which the report has a box dedicated to its ongoing economic reforms.

The list of countries in the Doing Business 2017 is topped by New Zealand while Singapore is ranked second. It is followed by Denmark, Hong Kong, South Korea, Norway, the UK, the US, Sweden and former Yugoslav Republic of Macedonia.

Neighbouring Pakistan is ranked 144th in the list.

On the basis of reforms undertaken, the top 10 improvers are Brunei Darussalam, Kazakhstan, Kenya, Belarus, Indonesia, Serbia, Georgia, Pakistan, United Arab Emirates and Bahrain.

A record 137 economies around the world have adopted key reforms that make it easier to start and operate small and medium-sized businesses, the report said.

Developing countries carried out more than 75 per cent of the 283 reforms in the past year, with Sub-Saharan Africa accounting for over one-quarter of all reforms, it added.

“What we have seen is a remarkable effort on the part of the government to implement business reforms. It looks like we are going to have to wait for another year or so. But the direction of change is fundamentally a very significant one,” Global Indicators Group Director Augusto Lopez-Claros told PTI in an interview.

The rankings are based on ten parameters — starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

India has improved its ranking with respect to various areas. In terms of getting electricity, the country’s position has jumped to 26th spot from 51st place last year.

When it comes to trading across borders, the ranking has moved up one place to 143, and in enforcing contracts the rise is of six spots to 172nd position.

However, with respect to starting a business, the ranking has slipped four places to 155th spot and in the case of dealing with construction permits by one rank to 185th.

As per the report, India’s ranking in terms of protecting minority investors dropped to 13th place from 10th position last year.

With regard to getting credit, the ranking has fallen by two places to 44.

Explaining as to why India’s reform efforts is not being reflected in the ease of doing business report, Lopez-Claros said it very often takes some time for the reforms implemented by governments about the regulatory environment to be felt on the ground by the business community.

Rita Ramalho, Manager of the Doing Business project said that there were in fact improvements this year.

“There are four areas of improvement this year in India getting electricity, trading across border, enforcing contracts and paying taxes,” Ramalho told PTI.

India’s ranking is based on the study of the system in the two cities of Mumbai and New Delhi.

“The reason why there is no real movement in the ranking is more to do with the fact that other countries are also moving. In absolute terms India, does improve significantly.

There aren’t many countries that improved more than India in terms of absolute number,” Ramalho said.

The ‘Doing Business’ project provides objective measures of business regulations for local firms in economies and selected cities at the sub-national level.

The World Bank is emphasising that countries pay attention to what it calls “distance to frontier” which is an absolute metric, Lopez-Claros said.

“There has been actually substantial increase in the last 12 months in India by couple of percentage points, which is quite large,” he noted.

Source: http://www.businesstoday.in/current/economy-politics/india-ranks-130th-in-ease-of-doing-business-index/story/238944.html

Ease of doing business: India banks on ‘remarkable work’ to improve World Bank ranking

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A man is silhouetted against the logo of the World Bank at the main venue for the International Monetary Fund (IMF) and World Bank annual meeting in Tokyo October 10, 2012. REUTERS/Kim Kyung-Hoon

As the World Bank looks set to release its annual ranking of countries in the ease of doing business later this week, India expects to improve its position from last year’s 130 out of 189 economies. The optimism stems from the fact that, for a second straight year, the country expects its ranking in “getting electricity’’ to improve substantially on the back of some “remarkable work” done by states, a senior government official told FE.

Last year, India was placed at 70 of the 189 countries in “getting electricity”, compared with 99 in the previous year. This had helped the country improve its ranking in the overall ease of doing business by 4 notches.

The government also believes that its “targeted intervention” to improve performance in difficult parameters — including dealing with construction permits and enforcing contracts — where the country has been faring badly for years now will start to pay, the official said.

So while it will take some time to correct the course in certain legacy issues, especially in enforcing contracts, the DIPP believes the much-improved performance of states will be reflected in the country’s ranking for the years to come.

For instance, while only two states (Gujarat and Andhra Pradesh) had scored over 70% in a 98-point action plan for the ease of doing business — jointly decided by them and the Centre — last year, as many as 16 states have scored over 70% so far this year, that too on a 340-point action plan, showed the latest data by the Department of Industrial Policy and Promotion (DIPP). Importantly, 10 states have scored over 90% so far this year (Andhra Pradesh and Telangana top the charts in 2016, each scoring over 99%).

The latest ranking of the World Bank takes into account reforms done up to the end of May, except in case of taxation.

The performance in access to electricity has been impressive, the official said. For instance, in Mumbai, the time required for getting a new electricity connection has been reduced to an average of around 15 days from 67 days earlier. The number of procedures involved has been cut down to just 3 from 7. Similarly, in Delhi, people can get connections in just 15 days now from as many as 140 days a few years earlier. The number of document required has been reduced to just 2 from 7 earlier. Access to electricity is crucial as it also has bearing on performance in some other aspects of the ease of doing business.

In “dealing with construction permits”, where the country was ranked at 183 of the 189 countries, the performance has improved. For instance, in Delhi and Mumbai, common online application form has been adopted for seeking construction permits. People don’t have to get no-objection certificates from anyone, as municipal corporations will get these certificates for them online. Earlier, some 18 no-objection certificates from different departments were required to be obtained by individuals for getting construction permits.

Also, in a metro like Delhi which has traditionally fared badly in handling construction permits, the documents required for this purpose has now been cut to just 14 from 39 earlier. Nine departments involved in the process of the sanction of buildings have been integrated online. The drawing of the construction plan is “auto-checked” by a software and no site inspection is necessary. Reforms on this parameter have been even quicker in other parts of the country.

On enforcing contracts in which India was placed at 178, the government has decided to set up commercial courts in a big way after the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Bill was signed into a law on January 1.

Although the exact data on the formation of such courts are yet to be compiled precisely, roughly a dozen such courts are learnt to have been set up, especially in Delhi, Mumbai, Gujarat and Himachal Pradesh, to settle high-value business disputes.

All pending suits and applications on commercial disputes involving a claim of Rs 1 crore or more in high courts and civil courts will be transferred to the relevant commercial division or courts. The decision to set up such courts is in sync with the Narendra Modi government’s aim of making India a global arbitration hub. The government plans to introduce e-summon system and efforts are on to expedite the process of getting a verdict, said the official.

To boost cross-border trade, the number of documents required for trade has been restricted to just 2-3 from as many as a dozen in certain cases earlier. Importantly, the finance ministry is learnt to have sanctioned Rs 2,500 crore for the upgrade of the IT and some other systems of the Customs departments.

Source: http://www.financialexpress.com/economy/ease-of-doing-business-india-banks-on-remarkable-work-to-improve-world-bank-ranking/428887/

Salaried taxpayers to get SMS alerts on TDS deductions

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As many as 2.5 crore salaried taxpayers will now receive SMS alerts from the Income Tax department regarding their quarterly TDS deductions.

Finance Minister Arun Jaitley on Monday launched the SMS alert service for Tax Deducted at Source (TDS) for salaried class and the CBDT will soon offer this facility on a monthly basis.

Briefing reporters about the facility, Jaitley said salaried class cannot afford to pay tax twice or indulge in litigations and hence they should be kept updated about their TDS deductions.

“Hence taxpayers will benefit if they receive information through use of technology. So they can match the office salary slip and the SMS and at the end of the fiscal he will be clear about any possible tax dues,” Jaitley said.

He asked the CBDT to work towards making the grievance redressal system for TDS mismatch online so that there is no interface between the taxpayer and the tax department.

Jaitley said e-Nivaran is working well for taxpayers and the CBDT is taking several tax payer friendly initiative.

The CBDT will soon extend this SMS facility to another 4.4 crore non-salaried taxpayers.

“The frequency of SMS alerts will be increased, once the process for filing TDS returns is streamlined to receive such information on a real time basis,” the CBDT said.

CBDT chairperson Rani Singh Nair said the tax department is encouraging people to register their mobile number on the e-filing website.

She said a taxpayer will initially receive a welcome message from the CBDT informing him about the facility and after that each assessee would be sent messages informing them about their respective TDS deductions.

The new step is an effort by the I-T department to directly communicate deposit of tax deducted through SMS alerts to salaried taxpayers. In case of a mismatch, they can contact their deductor for necessary correction.

Besides, SMS alerts will also be sent to deductors who have either failed to deposit taxes deducted to e-file their TDS returns by the due date.

Source: http://timesofindia.indiatimes.com/business/india-business/Salaried-taxpayers-to-get-SMS-alerts-on-TDS-deductions/articleshow/55034864.cms

Annual Compliance to be made by Private Limited Company in India

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The annual mandatory compliances which a private limited company has to  follow are listed below:

  1. Appointment of Auditor

The Statutory Auditor of the company shall be appointed for the 5 (Five) years and e-Form ADT-1 shall be filed for 5-year appointment. After that, in every year AGM, Shareholders shall ratify the Auditor, though there is no need to file e-Form ADT-1. The first Auditor of a company shall be appointed within one month from the date of incorporation of the Company.

  1. Statutory Audit of Accounts

Every Company shall prepare its Accounts and get the same audited by a Chartered Accountant at the end of the Financial Year compulsorily. The Audit Report and the Audited Financial Statements shall be attached for the purpose of filing it with the Registrar.

  1. Filing of Annual Return (e-Form MGT-7)

Every Private Limited Company is required to file its Annual Return within 60 days of holding of Annual General Meeting. Annual Return will be for the period 1st April to 31st March. There shall be attached the list of shareholders, as annexure to the e-Form MGT-7.

Annual Return shall be digitally signed by a Director and the Company Secretary; or where there is no Company Secretary by a Company Secretary in Practice.

If paid up capital of the company is more than Rs. 10 crore or turnover is more than Rs. 50 crore, a copy of e-Form MGT-8 (Certificate by Practicing Professional) is required to be annexed in e-Form MGT-7.

  1. Filing of Financial Statements (e-Form AOC-4)

Every Private Limited Company is required to file its Balance Sheet along with statement of Profit and Loss Account and Directors’ Report in this e-Form AOC-4, within 30 days of holding of Annual General Meeting.

  1. Holding Annual General Meeting (AGM)

It is mandatory for every Private Limited Company to hold an Annual General Meeting of the shareholders in every Calendar Year. Companies are required to hold their AGM within a period of six months, from the date of closing of the Financial Year.

  1. Holding of Board Meeting

 Every Company shall hold a minimum number of FOUR meetings of its Board of Directors every year in such a manner that maximum gap between two meetings should not be more than 120 (One hundred twenty) days. Company should hold at least 1 (one) Board Meeting every quarter of calendar year.

Preparation of Directors’ Report

Directors’ Report shall be prepared with a mention of all the information required under Section 134 of the Companies Act, 2013. Board’s report and any annexures thereto shall be signed by the ‘Chairperson’ authorized by the board or at least by two directors.

The above are the minimum annual compliances for a Private Limited Company in India – essentially, having minimum of 4 board meeting in a year, having an annual general meeting and having the audited accounts and filing e-Forms MGT-7, AOC-4 and ADT-1 with Ministry of Corporate Affairs.

Non-Compliance

If a Company fails to comply with the rules and regulations of the Companies Act, then the Company and every officer who is in default shall be punishable with fine for the period for which default continues.

If there is delay in any filing, then additional fees is required to be paid, which keeps on increasing as the time period of non-compliance increases.

Other event-based filing with e-Form MGT-14

Besides Annual Filings, there are various other compliances to be made as and when any event takes place in the Company. The instances of such events are:

  • Change in Authorised or Paid up Capital of the Company. – e-Form SH-7
  • Allotment of new shares or transfer of shares – e-Form PAS-3
  • Amendment of Objects Clause of Memorandum of Association
  • Change of situation of the Registered Office – e-Form INC 22 / e-Form INC 23
  • Giving Loans to other Companies.
  • Giving Loans to Directors
  • Appointment of Managing or whole time Director and payment of remuneration.
  • Availing of Term Loan / Working Capital or enhancement of WC limits from banks or institutions.
  • Raising of Private Equity or going for IPO.
  • Appointment or change of the Statutory Auditors of the Company.

Different forms are required to be filed with the Registrar for all such events, with e-filing of resolutions and agreements to the Registrar in e-Form MGT-14, within specified time periods. In case, the same is not done, additional fees or penalty might be levied. Hence, it is necessary that such compliances are met on time.

Foreign VCs can now invest in unlisted firms sans RBI nod

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Foreign venture capital entities can now invest in unlisted Indian companies without Reserve Bank of India approval.

The venture capital firm will, however, have to be registered with market regulator SEBI. The investment can be made in an Indian company in 10 specific sectors or in any start-up.

The central bank on Thursday amended the regulations governing foreign venture capital investors (FVCI) in order to further liberalise and rationalise the investment regime and to give a fillip to foreign investment in start-ups.

According to the RBI, the 10 sectors in which SEBI-registered FVCIs can invest without its nod are: biotechnology, IT, nanotechnology, seed research and development, discovery of new chemical entities in pharmaceutical sector, dairy industry, poultry industry, production of bio-fuels, hotel-cum-convention centres with over 3,000 seating capacity, and infrastructure sector. FVCIs can also invest in equity, equity-linked instruments or debt instruments issued by an Indian ‘start-up’ irrespective of the sector in which it is engaged. The RBI said a start-up will mean an entity (private limited company, registered partnership firm or a limited liability partnership) incorporated or registered in India not prior to five years, with an annual turnover not exceeding Rs. 25 crore in any preceding financial year.

These start-ups should be working towards innovation, development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property and satisfying certain conditions as given in the Foreign Exchange Management Regulations, 2016.

The RBI also said FVCIs can invest in units of a venture capital fund (VCF) or a Category-I alternative investment fund (AIF) or units of a scheme/fund set up by a VCF or by a Category-I AIF.

In a circular issued to banks authorised to deal in foreign exchange, the RBI said: “In order to further liberalise and rationalise the investment regime for FVCIs and to give a fillip to foreign investment in the start-ups, the extant regulatory provisions have been reviewed, in consultation with the Government of India.”

The consideration for all investments by an FVCI can be paid out of inward remittance from abroad through normal banking channels or out of sale/maturity proceeds of or income generated from investment already made. There will be no restriction on transfer of any security/instrument held by the FVCI to any person resident in or outside India.

Source: http://www.thehindubusinessline.com/todays-paper/foreign-vcs-can-now-invest-in-unlisted-firms-sans-rbi-nod/article9247432.ece

Assam gets off the block with GST registration

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The BJP-ruled Assam, the first state to ratify the GST Amendment Bill, has started the process for providing registration to taxpayers in the new indirect tax regime that is slated to kick in from April next year.

The state tax department has started collecting mobile numbers and e-mail IDs of registered dealers or taxpayers under VAT, CST, entry tax, luxury tax and entertainment tax to provide Goods and Services Taxpayers Identification Number (GSTIN) on a provisional basis.

In order to facilitate communication of GST registration number to the existing registered entities, the Assam tax department has asked them to furnish the mobile number and email ID on or before November 5, 2016.

“If such mobile numbers and e-mails IDs are not furnished on or before November 5, 2016, GST registration number will not be generated.

Moreover, such dealers will be disabled to upload their tax returns and apply for statutory forms under the existing Acts,” it said. It has asked the taxpayers to log into the tax department website of the Assam government and after feeding the mobile number, PAN and e-mail ID, the provisional GSTIN will be sent.

The government plans to roll out GST, which will subsume excise, service tax and other local levies, from April 2017. In the run-up to the biggest indirect tax reform, the states have to get their taxpayers registered with the pan-India GST Network, which will help in seamless movement of goods and services throughout the country.

After the GST Constitutional Amendment Bill was passed by Parliament on August 8, Assam was the first state to ratify it on August 12.

A constitution Amendment requires ratification by 50 per cent of state Assemblies before presidential assent.

With the President approving it last month, GST is now a law and the GST Council, chaired by Union Finance Minister Arun Jaitley, will decide on the crucial tax rate in its three-day meeting beginning tomorrow.

Source: http://www.moneycontrol.com/news/economy/assam-gets-offblockgst-registration_7635021.html