Month: January 2022

Budget 2022: Industrial incentives to further stimulate the Atmanirbhar agenda

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Government of India announced its ‘Atmanirbhar’ agenda in 2020. Through this initiative, the policymakers aim to make our economy self-reliant. A key pillar of this agenda was the announcement of ‘Production Linked Incentives’ (PLI) schemes for manufacturers in economically significant sectors.

These schemes aim to promote large scale domestic manufacture in India. It is envisaged that the manufacturing capacity enabled by this initiative will not only serve domestic consumption, but will lead to a surplus; thus, enabling higher exports. At the same time, creation of such manufacturing facilities would lead to mass job creation. Therefore, these schemes are designed as a holistic solution to multiple issues affecting the economy. Needless to say, they are also significantly furthering the ‘Make in India’ initiative.

The PLI scheme for each sector outlines eligibility criteria such as investment, production capacity and annual turnover. Qualifying approved investors are offered sales linked fiscal incentives as a percentage of annual turnover for a specified duration. Therefore, the government has adopted an outcome-oriented approach with these schemes.

The budget outlay for PLI schemes (currently exceeding INR 2 lakh crore) and their design are a testament to the government’s intent to provide long term support to industry. Owing to this, PLI schemes are proving to be a gamechanger for the nation’s investment landscape. The initiative was announced at a time when the global supply chain network was reeling under the impact of the pandemic. However, the last 18 months have seen the PLI schemes come to life, drawing attention from domestic and foreign investors alike.

These rapid developments are owing to the simplistic, outcome-oriented design of the PLI schemes. It offers investors visibility on the likely benefits thus enabling investment decisions.

In the near future, it is expected that some PLI schemes may be renewed. Similar schemes may be announced for IoT devices, wearables, chemicals etc. As the budget approaches, businesses that the PLI coverage is not only widened to additional sectors but is also deepened to accommodate specialised products across these sectors. This two-pronged focus will help plug the gaps in the manufacturing ecosystem thus truly acting as an enabler for import substitution, export promotion and employment generation which are the three pillars of Atmanirbhar Bharat.

Globally, renewable energy and research & development have become the mainstay of incentives measures. If the PLI schemes are recalibrated to include these areas (with the announcement of dedicated schemes as necessary), it will bring our incentives at par with global standards.

As the PLI schemes grew increasingly popular, investors faced some concerns which can be addressed in the upcoming schemes. In some sectors, the qualifying investment limits seemed higher than necessary to achieve the production targets. In some cases, the year-on-year sales growth targets were above industry norms, which led to some hesitation among investors.

It is also worth exploring how PLI can be made more accessible to investors. This would imply elimination of technicalities such as permitting only greenfield investments etc. A rationalisation in such criteria will create a level playing field and allow a larger pool of investors to benefit from this initiative. This will also lead to deeper percolation of the PLI benefits in each sector.

Also Read: Budget 2022: Experts list out direct, indirect tax expectations

On the implementation front, measures such as online dashboards indicating application evaluation status and timely announcement of approvals may be introduced. This will lead to increased transparency and robust processing, thus adding to the credibility of the initiative.

The PLI schemes are a recent measure. However, state level fiscal incentives have long been offered in India. Together with PLI, they make for a lucrative package since investors have the option of pursuing both. A modernisation of the state incentives implementation mechanism on the lines of PLI may be explored. This will significantly reduce the compliance burden on investors and speed up the processing of incentives matters.

Close on the heels of the PLI scheme for advanced chemistry cell batteries, the signing of an agreement between the investor and the government(s) may be introduced for high stake investments. This will reinforce commitment from all stakeholders and help businesses hit the ground running. A co-ordination committee may also be set up between the Centre and the State to ensure that the processing of incentives matters takes place within the specified timelines.

Also Read: Eco Survey 2022: Fiscal situation comfortable, says Niti Aayog VC; adds infra spending to spur employment

In addition to fiscal incentives, the reduced corporate tax rate of 15 percent for new manufacturing entities has also been drawing several investors to India. However, the deadline to avail this tax relief (31 March 2023) is fast approaching. Considering the last two years were largely affected by the pandemic, an extension in this date will be helpful to investors.

Also Read: Expectations of the Health Insurance sector from the Union Budget 2022

Through these incentives and various tax relief measures, India offers a plethora of benefits to investors. By continuously monitoring the pulse of industry, the policymakers continue to make rapid strides in the creation of an investor friendly ecosystem. In the long run, this momentum would pave the way for India to gain even greater prominence in the global supply chain network.

-The author Bhavesh Thakkar is Partner -Tax and Regulatory at EY. Prutha Pathak, Tax Manager at EY also contributed to the article. The views expressed are personal.

Read more from CNBC-TV18’s budget coverage here

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

BPCL Q3 Results: Revenue up 15% to Rs 1.18 lakh crore on improved sales; net profit down 12% to Rs 2,805 crore

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The state-owned Bharat Petroleum Corporation Limited today reported a revenue from operations at nearly Rs 1.18 lakh crore in the quarter ended December 31, 2021, a 15 percent quarter-on-quarter increase–and a near-35 percent rise year-on-year–driven mainly by an improvement in market sales and exports.

In its quarterly earnings report, the company reported market sales of 11.15 million metric tonnes of fuel in the reported quarter, up from 9.91 MMT in the second quarter of the fiscal. The company exported 0.55 MMT as against 0.48 in Q2FY22.

The company reported a net profit of Rs 2,805.09 crore, down 12 percent quarter-on-quarter from Rs 3,200.9 crore reported in the September quarter, but an increase of over 47 percent YoY.

Further, the company reported earnings per share (at a face value or Rs 10 each) of Rs 13.17 crore and a paid-up equity share capital of Rs 2,219.45 crore, the same as in the previous quarter.

In the earnings note, the company said, “The COVID-19 pandemic, globally and in India, has resulted in significant disturbance in economic and business activities. The management has assessed the potential impact of COVID-19 based on the current circumstances and expects no significant impact on the continuity of operations of the business on long-term basis or  useful life of the assets or its financial position.”

Also read: IOC Q3 Results: Revenue up 35% QoQ to Rs 1.99 lakh crore; net profit up 0.4% to Rs 6,261 crore

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Startup Digest: Anicut Capital secures Rs 140 crore for 2nd debt fund, UpScalio acquires Truphe & EaseMyTrip reports 84% jump in profits in Q3

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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FUNDING NEWS

Anicut Capital secures Rs 140 crore from SIDBI for second debt fund

Anicut Capital has raised Rs 140 crore from the Small Industries Development Bank of India (SIDBI) for its second debt fund. The funds will be deployed through the second debt fund – Grand Anicut Fund-2 – which closed recently at Rs 875 crore, a statement said. The funds received from SIDBI is through the Fund of Funds for Startups (FFS) that was launched under the Startup India Initiative in January 2015, it added.

Anicut’s second debt fund has invested across over 15 growth and early-stage startups with an average deal size of Rs 15-100 crore. GAF-2 has already invested upwards of Rs 580 crore, and portfolio companies include startups like Wow Momos, ASG Eye Care Hospital, Akna Medical (acquired by Pharmeasy), B9 Beverages (Bira), Azure Hospitality, Kissflow and Wingreens.

The fund plans to invest in more than 30 early and growth-stage companies across sectors, such as consumer brands, technology, F&B, fintech, among others, under categories of acquisition financing, promoter/buyback financing, growth capital and capital restructuring, the firm added.

100ms in talks to raise over $15 million from Falcon, Matrix & Accel: Report

Live video infrastructure startup 100ms is in talks to raise around $15-18 million in a fresh fundraise from new and existing investors, according to Entrackr. “100ms is finalising a $15-18 million round in which Falcon Edge’s Alpha Wave, Matrix and Accel will be the lead investors,” sources told Entrackr.

The round may also see participation from a couple of new investors and some angels, the report added. The startup had previously raised a $4.5 million seed fund led by Accel with participation from Strive.vc.

MemeChat raises over $1 million from Beenext, launches NFT marketplace

Homegrown social media networking app MemeChat secures over $1 million in its second round of funding led by Singapore-based venture capital firm Beenext, Stanford Angels & Entrepreneurs, 9unicorns, Founders Room Capital, Gaurav Munjal, Roman Saini and Abhishek Goyal, also participated in the funding round.

Also Read: Changing risk profiles of e-commerce and startups in post COVID-19 world

MemeChat will continue to strengthen the userbase for its newly launched The Meme Club – An NFT Marketplace (TMC), develop its networking app by building tools to easily discover & share memes and build a stronger recall value, the company said in a statement. With the newly launch NFT Marketplace, creators can also mint their memes and earn.

Currently, the startup has over 5 million downloads and 20 million memes generated on the application. It has partnered with the top OTT platforms like ALT Balaji, Hotstar, and Amazon Prime.

Antler India invests undisclosed sum in Gold loan aggregator Bold Finance

Gold loan aggregator Bold Finance raised an undisclosed pre-seed round from Antler India. The firm partners with local jewellery stores and banks to provide gold loans. It aims to cater to mid to low-income customers seeking gold loans.
With its first product, Bold Loan, Bold Finance aims to revolutionize the $85 billion unorganized gold loan market, by leveraging existing jeweller networks to source and dispense gold loans, it said in a statement.

“The majority of low and mid-income segment groups still do not have access to good customer experience in financial services, because of low ticket size and neglect from banks. Currently, 65 percent of the $135 billion gold loan market is unorganized and is managed by pawnbrokers, money lenders & jewellers. In the unorganized market, customers are often exploited with high-interest rates, usually upwards of 30 percent, and lenders bypass all regulations. This is the key challenge we are undertaking – to enable financial freedom for Bharat, starting with gold loans,” said Nikhil Jain, co-founder at Bold Finance.

The firm plans to scale its presence to Maharashtra, Gujarat and Madhya Pradesh this year. The startup will utilise the pre-seed funds towards onboarding channel partners, offline branding, and operations, it added.

INDIA STARTUP NEWS

UpScalio acquires Truphe; aims to hit Rs 750 crore revenue by FY21 end

Roll-up e-commerce startup UpScalio has acquired home and gardening brand Truphe for an undisclosed sum. Truphe is a manufacturer and distributor of gardening tools, seeds, planters and other accessories. It is available on marketplaces such as Amazon and Flipkart.

UpScalio said it aims to grow Truphe to a Rs 50 crore annual recurring revenue (ARR) brand in the next 1-2 years. It will work on the company’s inventory regionalization, sourcing, and brand marketing to scale the brand, the firm added. “The home and gardening category in India has quickly grown to become a $900 million space, and we plan to capture a large chunk of it with Truphe,” said Saaim Khan, co-founder and COO, UpScalio.

This is UpScalio’s ninth investment since its inception in June 2021. The roll-up e-commerce company has recorded over Rs 210 crore in annualised revenue. The company plans to acquire five more brands by the end of FY21 and is projecting a consolidated revenue run rate of Rs 750 crore for the same period.

Airtel picks up 25% stake in Lavelle Networks

Telecom operator Bharti Airtel has announced an agreement to acquire about 25 percent equity stake in technology startup Lavelle Networks. The agreement is subject to statutory approvals. “Airtel acquires about 25 percent strategic stake in SD-WAN startup Lavelle Networks”, the company said in a statement. Financial details about the deal were not disclosed.

Also Read: Indian electronics and lifestyle startup files papers for Rs 2,000 crore IPO

Lavelle Networks specialises in software-defined Wide Area Network solutions and it serves a range of industry segments. Airtel Business’ Network as a Service (NaaS) is a digital platform that focuses on emerging connectivity requirements of enterprises as they go through the cloud and digital adoption.

Under the NaaS portfolio, Airtel will offer software-defined connectivity solution from Lavelle Networks and co-create a series of innovations as part of its platform. “This also aims to bring ‘Made in India’ products and solutions for enterprises by offering cutting edge technology and cost efficiencies,” Airtel said.

EaseMyTrip reports 84% jump in profits in Q3

Online travel platform Easemy Trip has reported an 83.8 percent jump in consolidated profit after tax to Rs 40.42 crore in the third quarter ended on December 31, 2021. The company had posted a profit after tax of Rs 22 crore in the same period last fiscal, the company said in a statement.

Gross bookings revenue (GBR) in the period under review stood at Rs 1,293 crore as compared to Rs 783 crore in the year-ago quarter, up by 65 per cent, it added. Air segment booking grew 49 percent and hotel nights booking grew by 144 percent during the quarter.

Commenting on the performance, Easemy Trip co-founder Prashant Pitti said despite the challenges posed by the second and third wave of the pandemic, the company continued to deliver robust growth in one of the most disruptive periods for the travel and tourism industry.

On the outlook, Pitti said, “We are now extremely bullish about the strong pent-up demand in the travel industry.” He further said, “We will continue to strengthen on all fronts and are confident that our continued focus on financial and operational efficiency will help us to achieve sustainable business growth in the coming quarters as well.

PhonePe drives cumulative 6.63 bn transactions in Q4 2021, Maharashtra crosses 1 bn transactions: Pulse Q4 2021 Report

Digital payments and financial services platform PhonePe drove a cumulative 6.63 billion transactions in the fourth quarter of the calendar year 2021, a 26 percent quarter-on-quarter (QoQ) jump, it said in its Pulse Q4 2021 Report.
In addition, the total payments value (TPV) of transactions processed on the application grew to $155 billion.

Money transfers with UPI reached 2.72 billion while merchant payments registered a 37 per cent QoQ growth hitting 3.15 billion transactions during the quarter, according to the report. Maharashtra became the first state to cross 1 billion transactions in a quarter, with Pune accounting for 38 percent of overall transactions from the state. At a close second, Karnataka showed 24 percent QoQ growth, driving 932 million transactions.

In addition, Goa with an increase of 71 percent, Andaman with 41 percent, and Assam with 37 percent were the top three states and union territories in terms of QoQ transaction growth. Interestingly, 37 percent of all transactions after six in the evening, on the PhonePe application, were reported from food and beverage stores, the report highlighted.

Also Read: From LIC to Delhivery, Ola, Pharmeasy, a look at upcoming IPOs in 2022

The online merchant transactions category saw 32 percent QoQ growth hitting 655 million transactions. 25 million merchants were digitised across 15,700 towns and villages in India during the quarter, it said.

India has over 61,000 recognised startups, Delhi takes over as startup capital: Economic Survey

India is home to more than 61,400 startups recognised by The Department for Promotion of Industry and Internal Trade (DPIIT), as per the Economic Survey. The services sector has the maximum number of startups in the country. In 2021, DPIIT recognized over 14,000 new startups in comparison to 733 new startups recognised in 2016-17.

Delhi-NCR is now officially the startup capital of India as per the Economic Survey for 2022. The national capital region replaced India’s Silicon Valley Bengaluru as home to the most number of new startups getting created in the country. The government recognized over 5,000 new startups in Delhi-NCR compared to 4,514 startups in Bengaluru between April 2019 and December 2021.

In fact, some of the recently listed startups like Zomato, Policybazaar and Paytm are all headquartered in Delhi-NCR. The top two startup cities house some of the most valued startups in the country like Byjus, Swiggy, Oyo, Ola, PhonePe, Delhivery, OfBusiness, Razorpay and Cars24 among others.
At 11,308, Maharashtra has the highest number of recognised startups in the country. In terms of distribution, the survey said, 555 districts had at least one new startup in 2021 when compared to 121 districts with at least one new startup in 2016-17.

India’s startup ecosystem has been cruising on top gear with investors betting big on the India story, pandemic led the shift to digital and the opportunity in the ‘Bharat’ market. Indian startups raised a record 35+ billion dollars in venture capital in the last year as per data from Venture Intelligence. 2021 has also been a historic year for the Indian startup ecosystem with a record 44 startups hitting billion-dollar valuations entering the coveted ‘Unicorn Club’.

India has now overtaken the UK to become the third country with the most number of unicorns after the US and China. The US added 487 unicorns in 2021 while China saw the creation of 301 billion dollar firms in the year. India’s 83 unicorns are valued at $277.77 billion as per the survey, interestingly more than half of them were created in 2021. The trend seems to continue into 2022, January has seen four new startups enter the billion-dollar club which translates to one unicorn a week in the first month of the year.

Celcius inks pact with Shriram Transport Finance to fund transport entrepreneurs

SaaS-based cold chain aggregator platform Celcius has announced a financial tie-up with Shriram Transport Finance Company (STFC) to fund vehicles and working capital financing for the cold supply chain market. Under the collaboration, which marks STFC’s entry into the cold supply chain segment, the two partners will provide light and heavy commercial vehicles to the cold chain industry.

Besides, the platform also announced the launch of the Vahan Vikas Samriddhi programme, which will financially support aspiring regional entrepreneurs in the transportation sector. The programme will address the supply gap and empower aspiring entrepreneurs to establish operations in the cold chain sector to transport items such as COVID-19 vaccines, perishable fruits, vegetables, meat, dairy and other pharmaceutical products across the country, including remote locations, Celcius said in a statement.

“Our tie-up with Celcius will help us collaboratively improve the cold chain logistics sector. Efficiency is at the core of everything we do, and this joint effort will aid us with streamlining vehicle financing, fuel financing and bill discounting solution,” Sriram Transport Finance Corporation said.

The startup had early last year received seed round funding from Mumbai Angels Network, along with Huddle, Lumis Partners, Eaglewings Ventures Alliance Network (EVAN), Venture Capital & Private Equity firms MaGEHold, Keiretsu Forum, besides other investors from Malaysia, Nigeria and the US.

DRiefcase approved by the NHA for Ayushman Bharat Digital Mission roll-out

DRiefcase, a Ayushman Bharat Digital Mission ((ABDM) integrated health locker, has announced that it has now become a Personal Health Records app to be approved by the National Health Authority (NHA) for ABDM roll-out.
DRiefcase will now enable users to share health information under the ABDM framework with doctors and healthcare service providers, it said in a statement.

This integration will now allow users to create their own Ayushman Bharat Health Account (or ABHA address) and ensure that the created medical records are issued to the correct individual or accessed by a health information user only after proper consent is granted. Users will also be able to link existing records in their health locker into ABDM, the firm added.

10 startups win India Sweden Healthcare Innovation Centre Challenge

India-Sweden Healthcare Innovation Centre (ISHIC), a collaboration between the Swedish Trade Commissioner’s Office, AIIMS Delhi and AIIMS Jodhpur, announced the winners of the second edition of the Innovation Challenge.

The innovation challenge included a rigorous evaluation process by a panel of experts from AIIMS Jodhpur, Business Sweden, NASSCOM, AstraZeneca and other partners. The committee had shortlisted 10 solutions including that of Acorai, AiNDRA, BrainSightAI, EzeRx, Genitico, Neurofy, relink (Tada Medical), TeraLumen and innovative ideas from Dr Pradeep Bhatia and Dr Naveen Dutt, a statement said.

The winning start-ups will now work with the India-Sweden Healthcare Innovation Centre platform for a sustainable and faster scale-up, by providing them access to cross-country mentorship, guidance on funding, and ability to ideate with a like-minded innovator, access to state-of-the-art incubation centre located within AIIMS Jodhpur campus, their lab facilities and beyond. Onboarded startups can also avail the incubation facility at NASSCOM, it added.

As a part of the initiative, the startups, as well as the partner organisations, will work towards the shared vision of propelling and integrating innovative healthcare solutions into the ecosystem to bring about progress in the way healthcare is delivered or managed currently. The innovation challenge focused on identifying the best solutions across key focus areas including diabetes, heart failure, kidney diseases, oncology, neurology and Covid, amongst others.

GLOBAL TECHNOLOGY & STARTUP NEWS

Facebook owner Meta to lift veil off its metaverse business

Meta plans to break out the results of its augmented and virtual-reality hardware unit, Reality Labs, for the first time, an investment the company previously warned would cause a $10 billion hit to 2021 profit and would not be profitable “any time in the near future.”

As per Reuters, the company is hiring engineers and buying up multiple virtual reality gaming studios to build toward the metaverse, which is a broad futuristic idea of shared virtual realms that can be accessed via different devices and which Zuckerberg is betting will be the successor to the mobile internet.

Meta has said it expects non-advertising revenue to be down year-over-year in the fourth quarter as it compares unfavorably with the “strong launch” of its VR Quest 2 headsets during the previous year’s holiday shopping season.
The company has not released sales numbers for Quest headsets, but a July recall notice for the Quest 2’s facial foam liners said it affected about 4 million units in the United States.

Front-of-mind for investors, though, will be how Meta’s core digital advertising business is faring, after the tech giant said in October it faced “significant uncertainty” in the fourth quarter. Meta is expected to report revenue of $33.38 billion, according to Wall Street estimates, up 18.9 percent year over year, and is expected to post quarterly earnings per share of $3.84, a slight decline. The company has said it expects total 2021 expenses to come in at $70 billion-$71 billion and full-year 2022 expenses to reach $91 billion-$97 billion.

Joe Rogan apologises, Spotify to add advisory to COVID podcasts

Popular US podcaster Joe Rogan has apologised amid a backlash against COVID-19 misinformation in his programme, while his platform, Spotify Technology, said it would add a “content advisory” to any episode with a discussion of COVID, Reuters reported.

Rogan, a prominent vaccine skeptic, has stirred controversy with his views on the pandemic and on vaccines and government mandates to control the spread of the virus. Singer-songwriters Neil Young and Joni Mitchell announced last week that they were removing their music from Spotify in protest at coronavirus misinformation broadcast on the platform.

Young objected to his music being played on the same platform as the top-rated podcast, “The Joe Rogan Experience.” And 270 scientists and medical professionals wrote urging Spotify to prevent Rogan from spreading falsehoods. In a 10-minute Instagram video post on Sunday evening, Rogan apologized to Spotify for the backlash but defended inviting contentious guests.

“If I pissed you off, I’m sorry,” Rogan said. “I will do my best to try to balance out these more controversial viewpoints with other people’s perspectives so we can maybe find a better point of view.” Separately, Spotify chief executive Daniel Ek posted a blog saying an advisory will direct listeners to a COVID-19 hub that contains information from medical and health experts, as well as links to authoritative sources.

Britain’s Prince Harry and his wife Meghan have also expressed their concern to Spotify about COVID-19 misinformation but will continue to work with the company, a spokesperson for their Archewell foundation said. Spotify is also publishing platform rules for its creators.

“It is important to me that we don’t take on the position of being content censor while also making sure that there are rules in place and consequences for those who violate them,” Ek wrote.

SoftBank, Riverwood lead $93 million investment in Brazilian HR startup Gupy

Brazilian digital human resources startup Gupy has raised $93.15 million in a funding round led by Japan’s SoftBank and US venture capital firm Riverwood.
Founded in 2015, Gupy uses artificial intelligence to select, hire and train employees. According to the startup, it has around 1,500 client companies in Latin America.

The funding round comes after an expansion of automated human resources services in Brazil, especially during pandemic-related lockdowns. Mariana Dias, Gupy’s CEO and co-founder, said automated services are able to reduce the time spent on hiring employees by about 70 percent.

“Now, with the new round, we can increase investments in technology and offering solutions for workers looking for jobs through the recruitment platform,” Dias told Reuters, mentioning the launch of a free marketplace for job offers. Dias said that acquisitions would be one of the company’s growth drivers, with an initial public offering (IPO) not on its radar right now.

T-Mobile to terminate corporate employees who aren’t vaccinated by April: Memo

T-Mobile US will fire corporate employees who are not fully vaccinated against COVID-19 by April 2, according to an internal company memo posted on the blog The T-MO Report. The blog said T-Mobile’s new policy was announced on Friday in an email from its human resource chief to all staff. It follows a US Supreme Court ruling on January 13 that blocked President Joe Biden’s COVID-19 vaccination-or-testing mandate for large businesses.

“Employees who have not yet taken action to receive their first dose and upload proof by February 21 will be placed on unpaid leave,” the blog quoted the memo as saying. “Affected employees who do not become fully vaccinated … by April 2 will be separated from T-Mobile.” The memo addressed to “all employees (excluding international),” stated that the vaccine rules do not apply to field technicians and most in-store retail roles.

In a statement, T-Mobile said, “We are requiring office workers (with a limited exception for certain roles, locations and legally mandated accommodations and exemptions) to be fully vaccinated by April 2.” It added that “badge-controlled offices continue to be accessible only to those who are vaccinated against COVID-19.”

Crypto giant Binance restricts 281 Nigerian accounts

Binance, the world’s largest cryptocurrency exchange, has restricted the personal accounts of 281 Nigerian users, citing a need to comply with international money laundering laws, its CEO said. As per Reuters, Changpeng Zhao said in a letter to Nigerian customers that the decision to restrict some personal accounts was to ensure user safety while more than a third of the affected accounts were restricted at the request of international law enforcement.

“Currently, we have resolved 79 cases and continue to work through others. All non-law enforcement-related cases will be resolved within two weeks,” Changpeng Zhao said. Despite a central bank ban, Nigerians have continued to turn to crypto for business, to protect their savings as the naira currency loses value, and to send payments abroad because it is often hard to obtain US dollars locally.

Red-hot gaming market to breach $150 billion in deals, fundraising: Report

After kicking off 2022 with two mega acquisitions, the video gaming sector is racing to a new record of $150 billion in deals, financing and IPOs this year, according to investment banking firm Drake Star Partners. In just the first few weeks of 2022, Microsoft pitched nearly $70 billion for Activision Blizzard and Take-Two Interactive bid $11 billion for Zynga. That has helped the total value of deals this year already near 2020’s record haul of $85 billion from more than 1,159 announced or closed deals.

Last year’s figure was almost three times higher than in 2020. “We’re in the middle of a large number of deals right now and the state continues to stay very hot,” Drake Star’s Michael Metzger said. Some companies that have not made any big plays so far – including Amazon and Netflix – are expected to make new bets, Metzger said.

In Asia, Tencent, Byte Dance, Netease, South Korea’s Krafton and Japan’s Sony are on the radar. In IPOs, EPIC Games and Discord are the names to watch, according to the firm, whose clients include Codemasters and Echtra Games.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

View: Strong agri-focused budget expected for FY23; fertiliser industry may get continued subsidy support

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

With the background of upcoming elections in three key agrarian states and GoI’s efforts to improve farm incomes, the budget of FY2023 is expected to have a strong farm sector focus. Albeit the target of doubling farmer’s income by FY2022-23 looks elusive, ICRA expects GoI to focus on initiatives to improve crop realisations as well as non-farm incomes. The budgetary allocation may be increased towards MGNREGA and initiatives for improving non-farm incomes such as livestock farming, food processing etc.

Additionally, budgetary allocations towards development of irrigation facilities, crop insurance scheme, higher agri-credit is expected to continue. With agriculture remaining the focus, the agri-input sector i.e. agrochemicals, fertilisers etc. are expected to benefit from the same.

The budgetary allocation towards fertilizer subsidy for the upcoming year remains a key monitorable for the fertilizer industry. As per ICRA’s estimates the subsidy requirement for the fertilizer sector will be around Rs 1300-1400 billion for FY23 given the elevated commodity prices and the outlook for the same to remain firm.

We expect the budgetary allocation for fertiliser subsidy to be in line with our estimate of Rs 1300-1400 billion. It remains a possibility that the GoI may not allocate the full amount of the expected subsidy at the outset in the budget for FY23. It may calibrate the subsidy budget during the course of the year as in FY22 depending on the evolving subsidy requirement during the year. However, outright allocation in the budget will be a comforting factor for the industry. For FY22, the subsidy allocation of around Rs. 1410 billion is expected to remain adequate for the sector.

During FY22, the fertiliser availability particularly for phosphatic fertilisers witnessed significant headwinds due to unavailability in the international markets as well as elevated international prices. The GoI has been deliberating on steps to improve domestic production of phosphatic fertilisers and ICRA expects the GoI to outline steps to increase domestic production through incremental investments in this segment. Some of the steps that the GoI can take are rationalisation of import duty on phosphoric acid, ammonia and imported natural gas to improve the competitiveness of the domestic fertiliser players.

Also, the GoI may be expected to develop a roadmap to increase balanced use of fertilisers in the country and reduce dependence on particular fertilisers. The implementation of the true form of Direct Benefit transfer (DBT) for the fertilizer sector has been an ambitious project for the GoI. However, given the operational challenges in implementing the same, we do not expect it to materialise in the near to medium term.

—The author, Sabyasachi Majumdar, Senior Vice President & Group Head – Corporate Ratings, ICRA Ltd. Views expressed are personal

Read more from CNBC-TV18’s budget coverage

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Budget 2022: A few bold steps needed on Tax amendments towards ‘Ease of doing Business’

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Union Budget 2022-2023 is round the corner, and as always, there are expectations and a wish list.  We are also in the middle of one of the most difficult periods in the last several decades, and although, there is some silver lining in terms of likely tapering, it has caused significant havoc in terms of illness and deaths, and indeed to several parts of the economy.

In the above context, the need for facilitating Ease of Doing Business (‘EODB”) becomes even more important and one is fervently hoping that the Union Budget addresses some of these issues.

Business reorganization

 Business reorganization is important at any point of time, but in the current context, the need is even more strongly felt.  One aspect is splitting up unrelated businesses, the other is consolidation into a large business whether within a group or outside. In this context, here are a few provisions that urgently need attention:

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• A classic example of an outlier provision is the one which puts the onus on a company to establish that “excessive” share premium is not income. Existence of some outlier cases of transactions of this nature should not be the reason to introduce such provisions; clearly, it amounts to throwing the baby out with the bath water and is causing tremendous confusion, and indeed, litigation.
• A deemed gift kind of provision has been introduced some years back in the form of Section 56(2)(x); the sweep of this section has widened considerably over the years. As an example, what the tax department considers a non tax neutral demerger can fall within this section; given that this controversy can arise several years later, one shudders to think of the litigation and consequences on the company which is the recipient of the demerged division.
• In relation to unlisted companies, there is a provision vide Section 50CA that the floor price for a share transaction should be the adjusted net book value (ANBV) (adjustments for reckoner value of immovable property, and market value of investments in listed shares). Large deals could go into loops due to this – take the case of a stressed unlisted company with a manufacturing unit housed in a valuable immovable property. The property cannot be sold, because it is not possible to shift the factory except at substantial cost. However, in selling the shares of the company, if the transaction is done below the ABNV (commercially agreed with the buyer), the transferor will be liable to deemed capital gains tax and transferee will be liable to deemed gift tax under the above referred Section 56(2)(x)!

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Clarity on taxation of cryptocurrencies

• While India still needs to issue policies regarding cryptocurrencies, a lot of clarity shall be required around taxation of cryptocurrencies as well. Issues such as characterization of income from sale of cryptocurrencies (business income, capital gains or other income), cost of acquisition for cryptocurrency miners, taxation of Initial Coin Offerings, and ambiguity on related matters will require clarifications to avoid uncertainties.

ESOP taxation 

A major pain point for many years has been taxation of ESOPs; the stages of ESOPs are grant, vesting and exercise, and sale can happen at any point after exercise. However, taxation is at the point of time of exercise; at this stage, there is no monetization and logically, the point of time should be the point of sale.  Of course, one could break up the gain between the salary taxable at higher rate (fair value minus exercise price) and capital gain (selling price minus fair value on exercise), but the point of time of taxation should be the point of sale.

Tax rates 

For companies, the tax rates are very reasonable now at 25%, but the difference between tax rate of a partnership / LLP at 36% and company at 25% seems unjustified. While there is no tax on distribution by LLP (unlike in case of dividend payouts), substantial profits of a company, in most cases, are locked up in working capital or expansion and typically only 30% – 40% of PAT is distributed as dividend, sometimes not even that. If one considers an average dividend tax burden of 20% on 30% – 35% of PAT, it would be 5% – 7%; accordingly, at the most, the partnership/LLP rate should be 30%. Incidentally, most partnerships / LLPs are in the MSME category, and MSMEs account for 30% of India’s GDP and 100 mn jobs! This sector badly needs a real EODB push!

The tax rate for individual incomes above Rs 50 lacs is almost 35%.  One would think that this limit of Rs 50 lacs should be at least Rs 1 cr and total rates should be not more than 30%, since punitive rates of 35%-43% are a direct incentive for evasion.

To sum up: 

Tax laws are inherently complex, but within that complexity, one would wish that the above issues can be addressed since they would go a long way in making life less difficult for the taxpayer, particularly MSMEs which have been badly hit by the pandemic and could get some relief if tax rates are more reasonable and complexity is reduced.

-The author Ketan Dalal is the founder of Katalyst Advisors LLP. The views expressed are personal.

Read more from CNBC-TV18’s budget coverage here

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View: Strong agri focus expected in Budget

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The upcoming Budget is expected to have a strong focus on the farm sector. Although the government’s target of doubling farmer’s income by FY23 looks elusive, ICRA expects it to focus on initiatives to improve crop realisations as well as non-farm incomes.

The budgetary allocation may be increased towards MGNREGA as well as initiatives for improving non-farm incomes, in areas such as livestock farming and food processing. Additionally, the budgetary allocation towards the development of irrigation facilities, the crop insurance scheme and higher agri-credit is expected to continue.

With agriculture remaining the focus, the agri-input sector, such as agrochemicals and fertilisers, is expected to benefit.

The budgetary allocation towards the fertiliser subsidy for the upcoming year remains a key monitorable for the fertiliser industry.

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According to ICRA’s estimates, the subsidy requirement for the sector will be around Rs 1.3-1.4 lakh crore for FY23 given the elevated commodity prices and the outlook expected to remain firm. It expects the budgetary allocation for the fertiliser subsidy to be in line with its estimate. It remains a possibility that the government may not allocate the full amount of the expected subsidy at the outset in the Budget for FY23. It may calibrate the subsidy budget during the course of the year, as in FY2022, depending on the evolving subsidy requirement during the year.

However, the outright allocation in the Budget will be a comforting factor for the industry. For FY22, the subsidy allocation of around Rs 1.41 lakh crore is expected to remain adequate for the sector.

During FY22, the fertiliser availability, particularly for phosphatic fertilisers, witnessed significant headwinds due to unavailability and elevated prices in the international markets. The government has been deliberating on steps to improve the domestic production of phosphatic fertilisers. ICRA expects it to outline steps to increase domestic production through incremental investments.

Some of the steps that the GoI can take include rationalisation of import duty on phosphoric acid, ammonia and imported natural gas, to improve the competitiveness of the domestic fertiliser players. It may be expected to develop a roadmap to increase balanced use of fertilisers in the country and reduce dependence on particular fertilisers. The implementation of the true form of Direct Benefit transfer (DBT) for the fertiliser sector has been an ambitious project for the government. However, given operational challenges in implementing, ICRA does not expect it to materialise in the near to medium term.

Read more from CNBC-TV18’s budget coverage here

–Sabyasachi Majumdar is Senior Vice President and Group Head-Corporate Ratings at ICRA. The views expressed in this article are his own.

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Budget 2022: What edtech, new age businesses expect from FM Nirmala Sitharaman

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Amidst the onset of the third wave of the COVID-19 pandemic, India continues to demonstrate resilience and the Indian startup ecosystem remains extremely vibrant. Our entrepreneurs continue to create and retain jobs and create value for all stakeholders and continue to play an important part in nation-building.

As a vindication of this vibrant ecosystem, Prime Minister Narendra Modi announced that India will celebrate January 16 as ‘National Startup Day’, as he termed startups as the backbone of the country’s development and which he believes would fuel economic growth.

India saw a significant rise in the number of unicorns (more than 44 in 2021, and more than three only in the first couple weeks of 2022 and the number is expected to exceed 50 by end of 2022), making it one of the fastest-growing startup ecosystems globally.

This ecosystem is, however, expecting several initiatives from the government to cater to its needs and to provide impetus for its continued growth trajectory.

Spends on healthcare and pharma

There is an expectation of an increase in budgetary allocations for the sector as the vaccination programme continues to cover more citizens and the booster dose is being administered.

It is hoped that government introduces benefits for exports to make India a global pharmacy market. It is also hoped that the government provides tax benefits for startups in critical healthcare research and health-tech services.

Impetus for ed-tech sector

Ed-tech has enabled learning to continue for students for the last two years despite COVID-19 and therefore there is a continued expectation for the government to focus on digital infrastructure in tier-3 cities and beyond.

There should also be a stronger incentive for the ecosystem to enable employability and thereby skilling and narrowing the skill-gap. One also expects a stronger implementation framework to take forward the vision of NEP 2020.

Another area that requires a rethink is the taxation of content (books) differently offline and in the digital form. Similarly, providing incentives for ‘Make in India’ for hand-held and other devices which are a key means of providing education in these times.

Ease of doing business and clarity around licensing approvals for fintech

As the country continues to grow against the backdrop of the ‘Digital India’ initiative, much needs to be done to provide certainty to entrepreneurs investing in the fintech ecosystem and thereby encouraging financial inclusion (to the un-served or under-served consumer segments).

Although the fintech sector may also benefit from regulatory oversight, and there has been welcome news that the regulator will shortly set up a specific Department for the fintech sector, a key expectation remains that licensing/approval processes are simplified and the regulators provide adequate clarity around approval procedures (within the realm of appropriate checks & balances, particularly for offshore-held enterprises).

The ability of this sector to increase transparency for everyone via increased uptake of digital transactions, and for providing increased and quick credit access particularly to SME and MSMEs is expected to be strengthened.

Increase dialogue between regulators and newer-age businesses and models

It would help if regulators focus on adopting a consultative approach for newer age businesses and business models. New-age entrepreneurs are willing to discuss with the government and regulators upfront to remain ‘compliant’ and hence a dialogue would benefit everyone.

For instance, there has been uncertainly in the crypto space leading to significant stress not just for entrepreneurs but for consumers alike. Creating any situations akin to a ban may be counter-productive for the ecosystem, and it would better serve the larger interests to have a consultative process beforehand and to regulate appropriately.

One may recall some of the earlier situations around prohibiting e-pharmacies back in the days, when these very players demonstrated the ability to delivering medicines on time to people at the peak of the pandemic.

Dream to ‘go public’

Whether talent followed capital or vice versa was a question to many in the past, and the country has shown beyond doubt in the changing times capital following talent. As per a recent report by a large US-headquartered investment banking corporation, it is anticipated India’s IPO pipeline will remain very robust over the next two years, and that around US $400 billion of market capitalisation could be added from such new IPOs over the period whereby India’s market capitalisation could increase to over US $5 trillion by 2024. It is imperative, therefore, to enable a quicker process to public listing, including direct offshore listing of Indian companies.

As Indian startups are integral in the journey to the country’s growth, and with our new age entrepreneurs being job creators for the entire ecosystem, it would be imperative to help these businesses deliver on their potential so as to make the ‘Atmanirbhar Bharat’ vision bear fruit.

The author Ankur Pahwa is Partner – Strategy & Transactions and National Leader for the E-commerce, Consumer Internet and Startups, at EY India. The views expressed are personal.

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No legislative business in Rajya Sabha in 1st part of Budget Session: Govt

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The government informed an all-party meeting on January 31 that it does not intend to bring any legislative business in the Rajya Sabha during the first part of the Budget Session, which will last till February 11, sources said. The virtual meeting was convened by Rajya Sabha Chairman M. Venkaiah Naidu to discuss the agenda for the Budget Session, which started on January 31.

The sources said Union minister and Leader of the House Piyush Goyal informed the meeting that since the duration of the first part is small, no legislative business will be brought by the government. 

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The Budget Session of Parliament began on January 31 and is scheduled to conclude on April 8 with a recess between February 12 and March 13. Goyal said due to paucity of time during the first part of the session, the Rajya Sabha will only have time for the debate on the motion of thanks to the President’s address and the Union Budget proposal, according to the sources.

Naidu also urged leaders of various political parties to allow smooth functioning of the House during the session. The leaders assured the chairman of their support. The meeting was held virtually in view of the COVID-19 pandemic.

The shadow of the Pegasus snooping row already looms large over the Budget Session with the Opposition ready to take up the issue after The New York Times claimed that India had brought the Pegasus spyware from Israel in 2017 as part of a $2-billion defence deal.

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View: Changes the gold consumer can expect from Budget

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gold worsens India’s current account deficit every year with the 800-900 tonnes of imports annually. Our saving habits have a deep rooted role to play in this. People in the country definitely save a lot of money but invest in traditional investment products such as fixed deposits, real estate and gold. Gold purchased and placed in the locker by the consumer does not contribute to the economy, and is no good for the country in the long run.

The government is planning to digitalise and mobilise traditional investments in gold.

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The introduction of the gold monetisation scheme in 2015 and the launch of a series of sovereign gold bonds (SGBs) have laid the ground work of changing the investment habits of the consumer.

The gold monetisation scheme was launched with the idea of getting gold lying idle in households to a productive use by way of issuance of certificates against deposits with the government. But the product hasn’t lived up to the expectations because it involved melting of the deposited jewellery.

On the contrary, SGBs, wherein investors can buy gold online in a unit equivalent to one gram of the yellow metal, have worked wonders on reducing the new physical purchases by approximately five tonnes per subscription. The interest that SGB investments would earn and the liquidity have led to a small but radical change in the mind of the consumer around gold investments.

The government should now focus on educating the general public about the ill effects of physical purchases and advertising the current products in order to reach a larger audience. Benefits of the digital options need to be better conveyed to the gold investor. The Budget can introduce a few new products to work towards narrowing the current account deficit.

To give a greater push to the idea of getting gold investments to a productive use, we expect the government to launch something similar to a gold savings account, with an interest rate of around 2.5 percent, close to that of the SGBs, but will reach a larger consumer base. Banks also share a special communicative bond with the depositor and can promote the new digital gold saving habit easily.

Another big step in the direction of discouraging physical purchases can be reducing the limit set for PAN card purchases. The current regulation states that any purchase above Rs 2,00,000 mandates the jeweller to document the PAN number of the purchaser. This limit can be reduced to Rs 1,00,000 to enable the monitoring of a greater portion of the purchases.

The pandemic has adversely impacted the jewellery market. With gold prices soaring and consumers shifting focus to health and other needs, the demand for jewellery seems to have dried up. From the budget, the jewellers expect the government to support a recovery of the sector post-pandemic with reduced GST rates. The All India Gem & Jewellery Domestic Council has demanded a reduction in the GST rates from the current three percent to 1.25 percent.

In the last Budget, the government had slashed the import duty from 12.5 to 7.5 percent with an aim to reduce the illegal imports of gold. From the upcoming Budget, jewellers want additional support around import duty and expect the government to consider a reduction to 4-5 percent.

With mixed expectations, it will be interesting to see how the Budget comes up to cater to the demands of the various people.

Read more from CNBC-TV18’s budget coverage here

–Mahendra Luniya is Chairman of Vighnaharta Gold. The views expressed in this article are his own.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow