The proposed policy envisions the establishment of a dedicated Directorate of MSME at the state level to oversee the implementation of state and central government MSME schemes and programs. Additionally, a District MSME Centre (DMC) is planned for each district, initially utilizing existing District Industry Centres (DICs), to provide essential services and support. These include Udyam registration, single-window clearances, and assistance for the expansion of manufacturing and service MSMEs in both rural and urban areas.
Simplified Regulatory Landscape: Jharkhand MSME Special Concession Act 2023
To ease the regulatory burden on MSMEs, the policy proposes the introduction of the Jharkhand MSME Special Concession Act 2023. This act aims to grant exemptions to MSMEs from various approvals and inspections, streamlining the process of establishment and operation of enterprises.
Incentives to Propel Growth: Interest Subsidy, Fee Reimbursements, and Financial Assistance
The draft policy outlines an array of incentives, including a 5% per annum interest subsidy for new MSMEs on timely loan repayments. Other incentives include reimbursement of stamp duty and registration fees, assistance for quality certification, financial support for patent registration, reimbursement of electricity duty, and support for obtaining trademark registration.
Skill Development and Technology Adoption: Cluster-Based Development and Training Initiatives
Recognizing the importance of skill development and technology adoption, the policy emphasizes cluster-based development of MSMEs. It proposes regular training and workshops at the district level, focusing on technology usage and introducing new technologies in the MSME sector. MSMEs are encouraged to provide job-specific technical training and participate in re-skilling programs in collaboration with local educational institutions.
The comprehensive policy aims to position Jharkhand’s MSMEs on a level playing field, fostering individual business integrity while providing the necessary support for collective growth.
In a strategic move to address working capital challenges faced by Micro, Small, and Medium Enterprises (MSMEs), Red Fort Capital Finance Company, an NBFC lender, has launched its invoice discounting solution. This financial mechanism enables businesses to sell their outstanding invoices to a third-party financier, like a bank, at a discounted rate, facilitating swift access to working capital. The financier subsequently recovers the full amount from the customer upon the invoice’s maturity.
Empowering MSMEs with Flexible Funding
Parry Singh, Chairman and CEO of Red Fort Capital, expressed the company’s commitment to supporting the growth of borrowers, particularly in the current challenging business environment for small enterprises. The newly launched Invoice Discounting solution aims to empower businesses by offering quick and flexible lending options tailored to their unique requirements.
Documentation Requirements and Eligibility Criteria
MSMEs seeking Red Fort Capital’s invoice discounting solution need to provide essential documents such as invoices or purchase orders, details of the top 10 customers and their yearly sales, bank account statements for the last two years, monthly GST returns for the previous two years, KYC documents, audited financials, ITR returns for two years, sales ledger for the last one year, and collateral sale deed for secured lending. All sectors, except construction and education, are deemed eligible for invoice discounting, according to Red Fort Capital.
Recent Funding Initiatives by Red Fort Capital
Earlier this year, Red Fort Capital secured term loans of Rs 7.5 crore from IKF Finance and Rs 4 crore from Usha Financial Services for MSMEs. Specializing in secured business loans ranging from Rs 1 crore to Rs 10 crore, the NBFC aims to provide critical financial support to the MSME sector.
RBI’s Recent Measures and FIDC’s Caution
While the Reserve Bank of India (RBI) increased risk weights for various types of lending, including consumer credit, NBFCs have raised concerns about the potential adverse impact on credit flow to MSMEs. The Finance Industry Development Council (FIDC) has urged the central bank to reconsider these measures, emphasizing the potential negative consequences for MSMEs, self-employed individuals, and other sectors reliant on credit from NBFCs.
In a noteworthy development, the government’s Goods and Services Tax (GST) collections for October surged by 13% on a year-on-year basis, reaching a substantial total of Rs 1.72 lakh crore. This information was disclosed through official data released on Wednesday, highlighting a robust performance in revenue generation.
Second-Highest Monthly Collections Achieved
The October GST collections represent the second-highest monthly figures, closely trailing behind the record set in April 2023 when the collections peaked at Rs 1.87 lakh crore. This substantial growth reflects the effectiveness of GST mechanisms and underscores the resilience of economic activities contributing to tax revenue.
The impressive 13% YoY increase in GST collections signals economic recovery and stability. The sustained upward trajectory in tax collections bodes well for fiscal health, indicating positive momentum in various sectors contributing to the GST pool.
The Securities and Exchange Board of India (Sebi) has granted approval for five firms, marking a significant step towards their initial public offerings (IPOs). Among them are India Shelter Finance, DOMS Industries, Jana Small Finance Bank, Shiva Pharmachem, and Onest Ltd. The regulator’s issuance of observation letters, indicating the green light for IPO launches, follows the submission of draft papers between July and August.
India Shelter Finance’s Rs 1,800-crore IPO Plan
India Shelter Finance, a leading affordable housing finance company, is set to launch a Rs 1,800-crore IPO. The offering includes a fresh equity share issue of Rs 1,000 crore and an Rs 800-crore offer for sale (OFS) by investor shareholders. Funds raised will support onward lending and general corporate purposes.
DOMS Industries: Penciling Growth in Rs 1,200-crore IPO
Pencil manufacturer DOMS Industries plans a Rs 1,200-crore IPO, comprising a fresh issue of Rs 350 crore and an Rs 850-crore OFS by promoters. The capital will fuel the establishment of a new manufacturing facility and enhance production capabilities.
Jana Small Finance Bank’s IPO for Capital Augmentation
Jana Small Finance Bank’s IPO, totaling Rs 575 crore, involves a fresh issue and an OFS by existing investors. The bank aims to bolster its Tier-1 capital base to meet future capital needs for organic growth and expansion.
Shiva Pharmachem’s Rs 900-crore OFS IPO
Shiva Pharmachem’s IPO, solely an OFS of Rs 900 crore by promoters, will channel all proceeds to selling shareholders, with the company not receiving any funds.
Onest Ltd’s IPO to Fund Working Capital and Corporate Needs
Onest Ltd’s IPO, a blend of a Rs 77 crore fresh issue and an OFS of up to 32.5 crore shares, will direct fresh issue proceeds towards working capital requirements and general corporate purposes.
In a recent study titled ‘Decoding Digital Payments: A Retailer Perspective,’ NeoGrowth, an MSME-focused digital lender in India, sheds light on the evolving digital payments landscape among Indian retailers. Drawing from a dataset of 3,000 retailers and a survey of 1,000 retailers across the country, the study encompasses 25-plus cities and 70-plus industry segments.
Ubiquity of UPI in MSME Sales
The study reveals a significant trend among Micro, Small, and Medium Enterprises (MSMEs), with 70% reporting that half of their payments to suppliers are conducted through the United Payments Interface (UPI). Moreover, 7 out of 10 retailers anticipate that over half of their sales will be transacted via UPI in the next three years.
Preference for On-the-Go Digital Payments
The survey underscores UPI’s higher adoption compared to other digital payment methods like cards and online banking. It indicates a shift in consumer behavior, with customers preferring on-the-go purchases using digital payment options. Retailers, recognizing this preference, are increasingly embracing digital transactions, with UPI emerging as their preferred mode due to its customer convenience and swift payment processing.
Digital Transformation in Retail
As the study delves into the dynamics of digital payments adoption in the retail sector, it becomes evident that UPI’s prominence is reshaping the way MSMEs conduct transactions. The convenience and speed offered by UPI are driving both retailers and consumers towards a more digitally-driven retail landscape.
In the realm of business documentation, the Letter of Authorization for GST registration emerges as a critical component, streamlining representation before the GST department. This guide aims to unravel the concept, outlining its purpose, importance, format, and associated responsibilities.
Essence of Authorization Letter for GST
Delegating powers effectively is crucial in the multifaceted landscape of business ownership. The Authorization Letter, a legally binding document, plays a pivotal role in assigning specific powers to an authorized signatory. This ensures operational efficiency and mitigates the risks of mismanagement.
Significance in GST Registration
When obtaining a GST number, the Letter of Authorization becomes essential. Accompanied by the acceptance of authorization, it empowers a designated individual to act on behalf of the company in dealings with the GST department. Every entity, excluding sole proprietorships, requires an authorized signatory letter for GST registration.
Responsibilities of an Authorized Signatory
The authorized signatory bears key responsibilities integral to GST compliance. From applying for GSTIN to handling amendments, cancellations, and departmental correspondences, they are pivotal in GST-related activities. Their role extends to signing crucial GST documents, ensuring timely filing of returns, and representing the firm during assessments.
Crafting the GST Authority Letter
While the GST Act doesn’t prescribe a fixed format, certain elements are crucial. These include firm details, contact information, taxpayer and authorized signatory names, Aadhar and PAN details, and date, place, and signatures. Issuing the letter on official letterhead is essential.
Important Considerations in Drafting
Adhering to specific guidelines ensures the validity of the authorization letter. Issuing it on business letterhead, attaching proof of the principal place of business, appointing an authorized signatory for solo entrepreneurs, supporting the letter with a board resolution for companies, and ensuring all partners sign partnership firm authorization are vital considerations.
The repo rate, a pivotal tool in financial systems, influences the cost of credit and borrowing across the economy. As the central bank’s mechanism for lending to commercial banks, fluctuations in the repo rate have cascading effects on economic landscapes.
Credit Cost and Borrowing Impact
When the repo rate rises, borrowing becomes costlier for commercial banks, prompting them to pass on the added expenses to customers and businesses. This domino effect leads to higher loan interest rates, discouraging borrowing, and potentially stifling economic growth by limiting investments and employment opportunities.
NBFC Challenges and Profit Margins
Non-banking financial companies (NBFCs), crucial in extending financing to sectors overlooked by traditional banks, face challenges during high repo rate periods. Relying on a mix of loan and equity, NBFCs see a rise in the cost of debt, narrowing profit margins. Unlike traditional banks with access to low-cost financing, NBFCs, lacking such privileges, must lend at higher interest rates, impacting affordability for consumers.
Impact on SMEs and Low-Income Borrowers
The repercussions are felt keenly by small and medium enterprises (SMEs) and low-income borrowers. High lending rates hinder their ability to invest, expand, or achieve personal financial goals, exacerbating challenges in securing affordable credit.
Policy Challenges and the Road Ahead
Policymakers face the intricate task of balancing inflation management and sustaining economic growth amidst high repo rates. Crafting nuanced policies that consider the diverse needs of businesses and individuals is essential. Supporting financial inclusion and enabling NBFCs to access capital at reasonable rates contribute to building a more resilient and inclusive financial system.
Monetary Policy Complexity
The intricate relationship between high repo rates, expensive loans, and NBFC struggles underscores the complexities of monetary policy. Central banks and policymakers must make sophisticated decisions to foster a robust and inclusive economy, recognizing the evolving dynamics of the financial landscape.
Private general insurers in India have solidified their market standing, escalating their combined market share to 53.58% in gross direct premium underwritten during the first half of the current financial year, up from 50.81% in the same period last year. According to data released by the Insurance Regulatory and Development Authority of India (Irdai), 31 insurers in the non-life industry collectively underwrote gross direct premiums of Rs 1.43 lakh crore in the first half of the current fiscal year, marking a 14.86% annual increase.
Segment-Wise Insights
Health insurance emerged as the largest non-life segment up to September 2023, closely followed by motor (total) and crop insurance. Notably, private general insurers exhibited a robust growth rate of 21.13%, expanding their market share compared to the previous year. In contrast, PSU general insurers held a combined market share of 31.99%, experiencing a growth rate of 12.16%.
Top Insurers and Market Dynamics
The largest insurer in the landscape is the New India Assurance Company, commanding a market share of 13.09%, trailed by ICICI Lombard General Insurance Company (8.67%) and Bajaj Allianz General Insurance Company (7.69%). These top three insurers collectively hold a market share of 29.46%, showcasing a growth rate of 18.45%.
Segment-Wise Performance
While health insurance, motor (total), and crop insurance flourished, certain segments such as marine cargo, marine hull, crop insurance, and liability (total) experienced negative growth rates. Additionally, several segments, including fire, motor third party, overseas medical insurance, credit insurance, and others, recorded growth rates lower than those observed in the corresponding period of the previous year. The nuanced dynamics within these segments reflect the evolving landscape of the non-life insurance industry in India.
The High Court of Karnataka has raised concerns over the prima facie impact of exempting private medical establishments (PMEs) from the obligation to secure trade licenses and produce occupancy certificates (OC) during registration. The court, comprising Chief Justice Abhay Shreeniwas Oka and Justice John Michael Cunha, noted that this exemption, as outlined in a circular issued by the Commissioner for Health on August 17, 2020, appears to contradict the fundamental purpose and objectives of the Karnataka Private Medical Establishments Act, 2007.
Legal Challenge via PIL
The court’s observations were made while hearing a Public Interest Litigation (PIL) challenging the legality of the circular in question. The PIL contends that the circular, which relaxes the requirements for trade licenses and OCs for PMEs during registration, goes against the spirit of the regulatory framework established by the Karnataka Private Medical Establishments Act, 2007.
Court Action and Government Notice
In response to the PIL, the Division Bench ordered notice to the State government, seeking a response on the legality and implications of the circular. The court’s scrutiny suggests a critical examination of the exemptions granted to PMEs and the potential impact on public health and safety.
The Food Safety and Standards Authority of India (FSSAI) CEO, G Kamala Vardhana Rao, has urged states to enhance their efforts in monitoring and ensuring compliance with food safety standards. Speaking at the 39th Meeting of the Central Advisory Committee (CAC), Rao encouraged states and union territories (UTs) to increase regular surveillance, inspections, and random sampling of food products to detect and prevent adulteration.
Meeting Highlights
During the meeting, attended by over 60 officials, including Commissioners of Food Safety (CFS), representatives from states/UTs, senior FSSAI officials, nodal ministries, and committee members, key discussions centered around doubling quarterly targets. States/UTs were directed to intensify efforts and ensure the testing of at least 10 milk samples daily to uphold food safety standards.
Focus on Compliance
The statement emphasized the need for rigorous monitoring to verify compliance with laid-down standards, reflecting a commitment to safeguarding public health. The FSSAI’s call for increased vigilance aims to strengthen the regulatory framework and ensure the safety and quality of food products available in the market. By encouraging proactive measures, the FSSAI aims to create a robust system that protects consumers from potential health risks associated with food adulteration.
