In a recent “India’s Investment Readiness” survey conducted by Policybazaar.com across 350 cities, 63% of respondents expressed a clear preference for the Old Tax Regime over the New Tax Regime. The survey, targeting individuals within the taxable income bracket, aimed to understand the factors influencing Indians’ choice of tax regimes, especially with the New Tax Regime becoming the default option.
Factors Driving Preference
The findings reveal that tax-saving benefits and a sense of security offered by long-term savings instruments are key drivers behind the continued popularity of the Old Tax Regime. PPF (Public Provident Fund) and life insurance emerged as the most favored tax-saving instruments, chosen by 39% and 34% of respondents, respectively.
Demographic Shifts in Financial Prudence
The survey suggests a positive trend of financial prudence across India, with 71% of respondents making their tax regime choice based on meticulous calculations. Interestingly, women exhibited a slightly higher proactive approach than men, with 74% of women calculating tax liability under both regimes. Across age groups, a noteworthy shift is observed, with a majority in the 18-50 age group opting for the Old Regime, signaling an openness towards long-term investments.
Regional Dynamics and Preferred Instruments
Demographic sections traditionally limited in financial knowledge are showing recovery, with Tier 1, 2, and 3 respondents actively opting for the Old Regime. Southern India displayed the highest investment readiness at 65%, reflecting a collective shift in financial behavior.
Insurance and PPF: Shaping the Tax-Saving Landscape
The survey highlights a shift towards diversified investments, with PPF and life insurance emerging as the top tax-saving tools. This reflects an evolving financial landscape, indicating heightened awareness, prudent decision-making, and a preference for long-term financial stability among Indian investors.
These insights collectively paint a picture of a savings-centric mentality, where individuals are not only considering immediate tax benefits but also looking towards long-term gains from retirement-linked instruments, provident funds, pensions, and insurance.
In response to a query in the Lok Sabha, Minister of State in the MSME Ministry, Bhanu Pratap Singh Verma, acknowledged the absence of a dedicated study on the advantages and disadvantages of Foreign Direct Investment (FDI) in the Micro, Small, and Medium Enterprises (MSME) sector. Despite an investor-friendly policy fostering FDI in various sectors, including MSMEs, there’s a dearth of specific analysis concerning the competitiveness and viability of such investments.
Government’s FDI Promotion: Verma highlighted the government’s initiative to boost FDI through a favorable policy allowing 100% FDI under the automatic route in most sectors, barring strategically vital ones. This, however, is contingent upon adherence to sectoral laws, regulations, security conditions, and local laws.
FDI Trends and Concerns: Official data reveals a 24% decline in FDI equity inflows from $26.91 billion to $20.48 billion during April-September 2023. The overall FDI flows for FY23 also decreased by 16.3%, raising concerns about the attractiveness of the Indian market for foreign investors.
RBI Working Paper Insights: A working paper by the Reserve Bank of India earlier in the year delved into the impact of FDI on profitability. Notably, it found that FDI tends to have a more substantial positive effect on the profitability of larger companies compared to their smaller counterparts. The age and size of a company emerged as crucial factors, with older and smaller companies exhibiting lower profitability in the context of FDI.
Conclusion: The revelation of a lack of sector-specific analysis raises questions about the nuanced effects of FDI on MSMEs. As the government continues to advocate for foreign investment, a targeted examination of its impact on the MSME sector becomes imperative for informed policymaking and sustainable economic growth.
In 2023, B2B marketing has undergone a significant transformation, challenging the notion of a rigid and serious approach. B2B consumers, essentially individuals in various industries, are now recognized as people who share common interests with B2C consumers. Brands like Hootsuite have embraced a more human and fun approach, using memes and relatable content to engage with their target audience, especially social media managers.
LinkedIn’s Resurgence: The Power of Professional Networking
LinkedIn has witnessed a resurgence, becoming a prominent platform for professionals and brands alike. Brands such as Alibaba utilize LinkedIn to share their experiences and showcase their corporate culture, establishing a more personal connection with their audience.
Webinars Reimagined: Niche Engagement in the Digital Era
Webinars, while not a new concept, have evolved into a powerful tool for B2B brands. COVID-19 accelerated the realization of their potential, leading to the creation of niche webinars that focus on upskilling, information awareness, and myth-busting, offering valuable content to a targeted audience.
The Rise of Personal Branding: Beyond Elon Musk
Personal branding has gained increased awareness, with individuals like Kunal Shah becoming voices for their brands. Building goodwill and trust on a personal level has become integral to B2B marketing, showcasing the human side of business leaders.
ABM Evolution: Personalized Strategies for Client Relationships
Account-based marketing (ABM) has evolved into a sophisticated strategy for cultivating robust client relationships. B2B enterprises now deploy personalized ABM campaigns, tailoring messages to specific accounts for more impactful and personalized interactions.
The Junior Executives’ Revolution: Humanizing B2B Brands
2023 has seen junior to mid-level executives actively participating in humanizing B2B brands. This trend not only builds trust but also provides insights into the collaborative efforts behind the scenes, connecting individuals with the brands they represent.
In the dynamic and interconnected global marketplace, these trends signify a seismic shift in B2B marketing, demanding agile and innovative strategies to adapt to the ever-changing landscape.
In a recent development, the government announced that individuals eligible for Aadhaar can now enroll using iris scans if fingerprints are unavailable. This decision was prompted by the case of Josymol P Jose in Kerala, who faced difficulties enrolling for Aadhaar due to the absence of fingers. Minister of State for Electronics and IT, Rajeev Chandrasekhar, ensured Jose’s enrolment by instructing the Unique Identification Authority of India (UIDAI) to visit her home and generate her Aadhaar number using alternate biometrics.
The advisory issued to Aadhaar Service Kendras emphasizes that individuals like Jose, with blurred fingerprints or similar disabilities, should receive Aadhaar by utilizing alternate biometrics. Eligible persons who cannot provide fingerprints may enroll using only iris scans, and vice versa. If an individual cannot provide both finger and iris biometrics, they can still enroll without submitting either, with the available information captured along with highlighting the missing biometrics.
The enrolment process involves capturing the name, gender, address, date, and year of birth of the person, along with available biometrics. A photograph is taken to signify the unavailability of fingers or iris, and the Supervisor at the Aadhaar enrolment center validates such exceptional enrolments. The government emphasizes issuing Aadhaar numbers to every eligible person undergoing enrolment, regardless of biometric limitations. UIDAI has already enrolled approximately 29 lakh individuals with missing fingers or an inability to provide finger or iris biometrics through exceptional enrolment procedures, averaging 1,000 enrollments daily.
The Open Network for Digital Commerce (ONDC) is actively collaborating with the Ministry of Micro, Small and Medium Enterprises (MSME) to integrate MSMEs into its open e-commerce network. Minister of State in the Commerce Ministry, Som Parkash, highlighted ONDC’s efforts to onboard MSMEs through existing seller applications and integrate MSME-Mart, a B2B portal under the National Small Industries Corporation (NSIC) with over 2 lakh MSMEs. This strategic partnership aims to democratize e-commerce and potentially generate $250-300 billion in gross merchandise value by 2030, according to a report by consultancy firm RedSeer.
Expanding Reach through Industry Collaborations
ONDC is actively engaging with industry associations like the National Restaurant Association of India (NRAI) and the Federation of Hotel & Restaurant Associations of India (FHRAI) to onboard restaurants through various food aggregators. Currently, ONDC boasts over 59,000 food and beverage sellers and a total of more than 2.3 lakh sellers and service providers, including small, medium, and large enterprises.
Empowering Small Businesses and Fostering Awareness
To empower small businesses, ONDC has undertaken initiatives such as awareness workshops in collaboration with industry associations, a Feet on Street program for seller education, and the creation of educational content. The platform, launched in 2021, aims to challenge digital monopolies, standardize operations, and enhance efficiency throughout the e-commerce value chain. The concerted efforts of ONDC align with the vision to support India’s MSME ecosystem and contribute significantly to the digital transformation of e-commerce.
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In a significant development on November 16, 2023, the Delhi High Court declared the Tax Research Unit’s (TRU) clarification on the classification of polypropylene woven and non-woven bags as invalid. The court emphasized that the TRU, a body under the Ministry of Finance, lacks the authority to provide such clarifications, pointing to the exclusive jurisdiction vested in the Central Board of Indirect Taxes and Customs (CBIC) by Section 168 of the Central Goods and Services Tax Act, 2017.
Basis for Quashing Circular No. 80/54/2018-GST
The court scrutinized Circular No. 80/54/2018-GST, issued on December 31, 2018, and highlighted its shortcomings. Notably, the Circular failed to consider Section XI of the Customs Tariff Act, 1975, and neglected references to Chapter 56 or 63. Moreover, the court pointed out the Circular’s omission of acknowledgment of the Notes in Chapter 39, which explicitly exclude textiles from its scope.
Court’s Rationale and Precedent
In the case of Association of Technical Textiles Manufacturers and Processors v. Union of India, the court asserted that conflicting views from Appellate Authorities for Advance Ruling (AARs) cannot be resolved through directives or clarifications like the challenged Circular. Citing the Supreme Court’s decision in Union of India v. Bharat Forge Ltd. [2022 SCC Online SC 1018], the court stressed the importance of a more comprehensive resolution.
Classification Issue Left Open for Competent Authority
While allowing the writ petition, the court decided to leave the matter of classification open for consideration by the competent authority in future proceedings. This decision marks a crucial stance against unauthorized clarification and underscores the need for adherence to statutory procedures in matters of taxation.
The Employees’ Provident Fund Organisation (EPFO) has played a crucial role in supporting its subscribers during the challenging times of the Covid-19 pandemic. According to the draft Annual Report 2022-23, over 22 million subscribers, representing more than one-third of the total EPFO subscriber base, have availed themselves of Covid advances from their retirement savings. This significant financial assistance amounted to a total disbursement of Rs 48,075.75 crore over the course of three fiscal years starting from 2020-21.
Swift and Responsive Settlements
With a subscriber base exceeding 60 million and managing a substantial corpus of over Rs 18 lakh crore, the EPFO efficiently settled the majority of Covid claims within three days. This swift response played a crucial role in mitigating the financial impact on households, showcasing the EPFO’s commitment to providing timely and crucial financial support to its subscribers during times of economic uncertainty.
Alleviating Financial Strain on Households
The expedited disbursement of Covid advances reflects the EPFO’s proactive approach in alleviating the financial burden on its vast subscriber base. By swiftly facilitating access to retirement savings, the EPFO has contributed significantly to helping millions of individuals navigate the economic challenges brought about by the pandemic.
In a spectacular Grand Finale and Felicitation Ceremony held earlier today in New Delhi, the ET MSME Awards 2023 recognized and applauded the remarkable accomplishments of 27 winners spanning 26 distinct award categories. This prestigious event marked a momentous celebration of the entrepreneurial spirit and exceptional business achievements exhibited by India’s micro, small, and medium enterprises (MSMEs), widely acknowledged as the backbone of the nation’s economy.
Acknowledging Entrepreneurial Zeal
The awards ceremony showcased the vibrancy and resilience of the MSME sector, underscoring its pivotal role in driving economic growth. Entrepreneurs and businesses from various domains were lauded for their unwavering commitment, innovation, and impact on the nation’s economic landscape.
Comprehensive and Influential Recognition
The ET MSME Awards 2023 stood out as the most comprehensive and influential platform, covering a diverse array of award categories to ensure a thorough acknowledgment of the multifaceted contributions made by MSMEs across the country.
An Inspiring Tribute
The ceremony served as a poignant tribute to the visionaries and trailblazers who have not only navigated the challenges posed by the business landscape but have also significantly contributed to India’s journey towards becoming a global economic force. The event reflected the resilience, creativity, and transformative potential inherent in India’s MSME sector.
Affordable housing finance company, India Shelter Finance, has announced its debut initial public offering (IPO) valued at Rs 1,200 crore. The IPO encompasses a fresh issuance of equity shares amounting to Rs 800 crore and an offer-for-sale (OFS) worth Rs 400 crore by investor shareholders. The subscription window for retail investors is scheduled from December 13 to 15, with the anchor book opening for bidding on December 12.
Price Band and Share Offering: India Shelter Finance has fixed the price band for the shares at Rs 469-493 each. The OFS involves shares offered by entities such as Catalyst Trusteeship Ltd, Madison India Opportunities IV, MIO Starrock, Nexus Ventures III Ltd, and Nexus Opportunity Fund II Ltd. The proceeds from the fresh issue will be allocated for future capital requirements and general corporate purposes, particularly towards onward lending.
Reserved Quotas and Bidding Information: Half of the IPO’s size is reserved for qualified institutional buyers (QIBs), 35% for retail investors, and the remaining 15% for non-institutional investors. Investors can bid for a minimum of 30 equity shares, with subsequent bids in multiples of 30 equity shares.
Company Profile and Backing: India Shelter Finance, supported by Westbridge Capital and Nexus Venture Partners, is a retail-centric affordable housing finance company targeting self-employed customers. The focus is on first-time home loan applicants within the low and middle-income groups in Tier II and Tier III cities in India. ICICI Securities, Citigroup Global Markets India, Kotak Mahindra Capital Company, and Ambit are the appointed book-running lead managers overseeing the IPO.
The government is considering the enforcement of e-invoicing for Business-to-Consumer (B2C) transactions within the next 2-3 years, according to an official announcement on Wednesday. Currently applicable to businesses with a turnover exceeding Rs 5 crore, e-invoicing is mandatory for Business-to-Business (B2B) sales and purchases.
Upgradation of GST Systems for B2C Integration
Shashank Priya, a member of the Central Board of Indirect Taxes & Customs (CBIC) focused on GST, highlighted the ongoing efforts to upscale GST systems for the inclusion of B2C transactions under e-invoicing. Priya emphasized the need for system implementation and sector-wise prioritization, acknowledging that the process is a work in progress.
Challenges and Encouragement for Compliance
Priya noted that businesses with turnovers between Rs 5-10 crore have been slow to adopt e-invoicing, despite CBIC officers actively encouraging compliance. He highlighted the benefits, such as ease of doing business and automated processes like populated GSTR-1 and e-way bills, associated with the implementation of e-invoicing.
Staggered Implementation and Threshold Adjustments
The government has systematically enforced e-invoicing, starting with mandatory compliance for companies with turnovers exceeding Rs 500 crore from October 1, 2020. Subsequently, the threshold was reduced to Rs 100 crore from January 1, 2021, and further lowered to Rs 50 crore from April 1, 2021. The most recent adjustment brought the threshold down to Rs 20 crore from April 1, 2022, for B2B transactions.
