Gold prices fall to Rs 47,960 per 10 gm, silver trends at Rs 69,800 a kg

In New Delhi, the 22-carat gold price stayed at Rs 47,800 per 10 gm, while in Chennai it was at Rs 46,560

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After GameStop, Wall Street gears up for second bout against Reddit traders

Some of Wall Street's largest hedge funds are still licking their wounds after retail traders sought to drive up the prices of stocks that were heavily bet against

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Budget 2021 aims to revive economy despite limited fiscal headroom

The government is likely to hike import duties on a number of high-end goods in a bid to raise more than 210 billion rupees in revenue

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100-year-old 'Captain Tom', UK's lockdown hero, hospitialised with Covid-19

Captain Tom Moore has been admitted to hospital after testing positive for Covid-19, his daughter said

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MARKET LIVE: How will Union Budget 2021 impact your portfolio?

LIVE market: The Finance Minister has promised a "never before" budget that would help revive economic sentiment in a Covid-19 impacted year

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Budget 2021 aims to revive economy despite limited fiscal headroom

The government is likely to hike import duties on a number of high-end goods in a bid to raise more than 210 billion rupees in revenue

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Agriculture Minister not giving correct facts on farm bills: Sharad Pawar

NCP president Sharad Pawar said that Agriculture Minister Narendra Singh Tomar is not bringing out 'correct facts' on the three farm bills

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Budget 2021 LIVE: What to expect from FM's 'Budget like never before'

Budget 2021 LIVE: Finance Minister Nirmala Sitharaman will present the annual Union Budget 2021-22 in Parliament today. Follow Business Standard for LIVE updates

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Agriculture Minister not giving correct facts on farm bills: Sharad Pawar

NCP president Sharad Pawar said that Agriculture Minister Narendra Singh Tomar is not bringing out 'correct facts' on the three farm bills

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Recapitalisation plan in the works for India Post Payments Bank

Viability plan includes Rs 2,000-crore infusion

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Lava plans to turn up the heat on Chinese brands, aims to ramp up headcount

Expansion of distribution network, venturing into new markets, supplementing production capacity, and ramping up workforce are all on the cards

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Hit hard by Covid-19 lockdown, economy on firm path of fragile recovery

Though the first case of Covid was detected at the end of January last year, the impact on the economy began to be felt towards the end of March, when the first nationwide lockdown was announced

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Goblet full for big wineries, small ones hit rock bottom amid Covid-19

Indian wine companies have necessarily had to adapt to the new normal of markets and consumer behaviour.

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Lupin plans expansion, aims to enter Chinese market in the next one year

The company has now decided to focus on specialty drugs. The annual price cuts made the Japanese generics market unattractive

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After RBI's paper on new regulatory framework, what next for NBFCs?

Over the last five years, their balance sheet more than doubled to Rs 49.22 trillion

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Legacy insurers can't go digital overnight, says Oracle's Prasad Rai

Insurers will also need to introspect and bring about changes internally, according to PRASAD RAI, vice-president, Global Strategic Clients Group at Oracle, who spoke to Raghu Mohan

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Budget 2021: All eyes will be on the package FM unveils for state-run banks

A status check on the consolidation of four sets of state-run banks offers clues to the hard decisions that are needed, write Abhijit Lele and Raghu Mohan

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Statsguru: Economic Survey sets the tone for most awaited Union Budget

The Survey batted for a bold fiscal expansion to make the economic recovery more broad-based

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Bajaj Finance to strengthen position in consumer finance mkt with Bajaj Pay

Bajaj Pay, the new product, is expected to be rolled out in the current quarter and is targeted at its existing customers

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After a year of battling Covid, signs that India may not face second wave

Some experts caution there is still a large fraction of our population, mainly outside the major cities, that remains susceptible to the virus. And this could lead to another surge

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Budget 2021 LIVE updates: Sitharaman's 'Budget like never before' today

Budget 2021 LIVE: Finance Minister Nirmala Sitharaman will present the annual Union Budget 2021-22 in Parliament today. Follow Business Standard for LIVE updates

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Myanmar leader Suu Kyi detained in early-morning raid, says report

Suu Kyi, President Win Myint and other leaders were "taken," the report said, citing Myo Nyunt, a spokesman for the ruling National League for Democracy

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Best of BS Opinion: Staring at an abyss, Occupy Wall Street 2.0, and more

Here's a selection of Business Standard opinion pieces for the day

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World Bank's IFC to invest $45 million equity in upGrad Education

upGrad has almost doubled its users in six months and aims to touch 10 lakh by the end of 2021

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Personal I-T revenue now equals all other direct taxes: That's a problem

Until the 1950s taxes on output contributed more to government revenue than those on incomes of people and businesses. But since then the balance has gradually been reversed

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Delhi likely to get 2 stations under 3 proposed Bullet train projects

The national capital is likely to get two high speed rail stations in different areas, officials related to development said on Sunday

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Haryana Cong to embark on 'peace march' in support of protesting farmers

Haryana Congress will organise peace march in every block of the state from February 3 to 5 in support of farmers protesting against the Central agri laws

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WhatsApp expands Status messaging to UK, US to reassure users about privacy

WhatsApp has now expanded its 'commitment to your privacy' message to the users in the US and UK as well.

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Fog engulfs Delhi, overall air quality remains in 'very poor' category

Citizens in Delhi on Friday woke up to a foggy morning as the temperature dipped in several parts of the city. The situation worsened as the air quality remained in the 'very poor' category.

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Global Covid-19 cases top 102.5 mn with 2.2 mn deaths: Johns Hopkins

The total number of global coronavirus cases has topped 102.5 million, while the deaths have surged to more than 2.21 million, according to the Johns Hopkins University.

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Union Budget 2021: Abolish tax on dividends for retail investors to consider equity investments

The year 2020 has brought unprecedented upheaval in the lives of people and businesses across the globe. For the investor community too it was a time of volatility and uncertainty. While the world is warming up and adjusting to the new normal, many people and businesses are still reeling from the economic impact of COVID-19. With the Union Budget 2021-2022 announcement some hours away, here are some expectations from retail investors for this year’s Budget.

Equity-related mutual funds

Indexation assists investors in paying taxes on the real value of the investments as compared to the nominal value. At present, the government offers indexation benefits for gold investments, debt mutual funds, and real estate. However, equity-related funds are not eligible to be considered. From 2018, Long-term Capital Gains (LTCG) is taxed at 10 percent sans any indexation benefits. While the LTCG up to Rs 1 lakh is exempted from tax every year, the impact on the tax liability is not substantial. Also, this rule incentivises investors to book profits every year as opposed to staying invested for a longer period.

NPS Tax-saver to all investors

Last year, the Union Budget announced the launch of Tier-II of the National Pension Scheme (NPS). This had a shorter lock-in period when compared to the Tier-I lock-in requirement of up to retirement. However, Tier-II NPS funds were only made available to government employees.  After reducing the lock-in requirement, NPS funds can be compared with the Equity Linked Savings Scheme (ELSS) schemes. Hence, investors expect the government to make Tier –II available to all retail investors to give them an additional option of investing in a tax-saving equity-related fund.

Tax on dividends

In 2020, interest rates dropped, and several investors felt a significant strain on their fixed, regular income. Moreover, the government had scrapped the Dividend Distribution Tax (DDT) and made dividends taxable for all investors. Given the current state of the pandemic-hit economy, investors require an avenue to boost the fixed income section of their portfolios that can be easily replaced by equity shares of companies that have a history of offering good dividends. If the Budget manages to abolish tax on dividends or re-introduce DDT, then retail investors might start looking at equity investments for dividends as a replacement for fixed income too.

The Union Budget 2021-2022 will be the first one in the post-COVID world and the industry will be expecting concrete measures from the government in favour of a fast-tracked revival process for the economy. Particularly sectors such as retail, travel, tourism, and aviation, are facing an urgent need of a speedy recovery process in order to bounce back to normalcy. Increased and continuous support from the government in terms of enhanced infrastructure, enabling complete digitisation, and eradication of the aforementioned taxes will ensure that the Indian economy’s revival is well underway.

The writer is Co-Founder and COO, Groww

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China's factory activity growth slows in January due to Covid-19

China's factory activity grew at the slowest pace in five months in January, hit by a wave of domestic coronavirus infections

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Trump parts ways with his lead impeachment lawyers a week before trial

Trump has parted ways with his lead impeachment lawyers little more more than a week before his trial, two people familiar with the situation said Saturday

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Joe Biden calls for Democrats to keep Trump impeachment trial short

Biden urged his fellow members of the Democratic Party in the Senate to keep former President Donald Trump's impeachment trial in the upper chamber short and not to let it 'derail the agenda'

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LIVE: PM Modi to give this year's 'Mann Ki Baat' speech ahead of Budget

Mann Ki Baat LIVE UPDATES: Prime Minister's annual radio speech coincides protests against three agriculture laws enacted in September.

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No longer the Hong Kong we knew: Thousands flee for UK amid China crackdown

Many say China's encroachment on their way of life and civil liberties has become unbearable

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Union Budget 2021: Govt needs to emphasise skill development in education policy to support economy

For India to achieve Sustainable Development Goals (SDGs) by 2030 and to accomplish its vision of becoming a self-reliant $5 trillion economy, one of the fundamental requirements will be to focus and invest in education. In the recent past, the government has made significant strides in this sector, a monumental development being the National Education Policy (NEP) 2020 reforms that are currently underway.

Therefore, the upcoming Union Budget 2021 will be key for two reasons; first, it is likely to provide an in-depth view of the implementation of NEP 2020 and secondly, this is the first Budget post-pandemic and hence, will be key about how the government plans to get the education sector back on track from the pandemic impact.

Union Budget 2021 must emphasise on the following segments:

We need to deepen our focus on skill development, right from the corporate sector to the low-income group youth ensuring Indians are equipped with the necessary skills to support and accelerate the economy. According to a survey report by FICCI, at least 9 percent Indians will be in jobs that do not exist currently and 37 percent of workforce will require radically changed skill sets to meet their employment demands.

Another report by McKinsey highlighted the fact that as many as 87 percent of surveyed executives said that their organizations were either experiencing skill gaps or were expecting them to happen within the next few years. The pandemic has emphasized the need to fill this gap and has put a spotlight on the need to re-skill and up-skill citizens across levels and sectors.

Hence, there is a need to grant appropriate stimulus to the skill development sector and ensure inclusive growth opportunities for all, as well as create a workforce that is ready to meet the global demands too.

Secondly, education infrastructure is another important segment which the Union Budget should focus on. The pandemic forced over 1.5 million schools across India to close overnight, emphasising the necessity for digital education. Although in the post-pandemic ecosystem, digital education has been embraced, India still needs to build capabilities to support blended learning completely. According to a UNICEF report, only 24 percent of Indian households have the internet to access e-education. Therefore, education infrastructure lending is a necessity to aid the development of K12 schools across the country.

As India shifts towards blended learning and the usage of technology become paramount, the government must consider granting ‘infrastructure status’ to education institutions to make quality education affordable and accessible for deserving Indian students. The focus from the government and easy availability of capital will induce an environment of innovation in the field of education, which can help bridge the demand and supply challenges in this sector.

Budget 2021 should implement reforms such as refinancing of retail education loans for lower ticket size. Such a financing scheme, similar to the one available to housing finance companies (HFCs), can provide a boost to the education loan segment and contribute to liquidity management for non-banking financial companies (NBFCs). This in turn would provide the necessary momentum for NBFCs to create a stronger customer proposition and contribute to building the economy at large.

The education sector is undoubtedly at the cusp of an exciting phase with policy push and technological advancements. We are positive about the growing inclination towards equitable and quality education and look forward to the upcoming Union Budget. We hope that the new directions will help bridge the existing educational gaps and secure a sustainable long-term growth structure that will further boost the economy.

The writer is CEO, Avanse Financial Services

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Union Budget 2021: Govt should consider light touch regulatory regime to attract global lenders in IFSC

The International Financial Services Centre (IFSC)’s Gujarat International Finance Tech-City (GIFT) is the first smart city in India that is fast emerging as an attractive destination for financial services players. After the setting up of the International Financial Services Centre Authority (IFSCA) [being the Unified Regulator for IFSC], it has witnessed some path-breaking regulations and policy announcements in a very short span of time for different aspects of financial services such as banking, stock-broking, investors in IFSC, etc.

Recently, the IFSCA permitted Global In-House Centres (GICs) of financial companies to be set up in IFSC. The Alternative Investment Funds regime is also attractive and it should see funds/fund managers setting up base in IFSC soon. One must also applaud the IFSCA on being very open to suggestions from investors and pro-development. The IFSCA works closely with the government to address the changing business environment/needs and providing more business opportunities/competitive advantages for units in IFSC. Whilst a lot has already been done, some of the key tax considerations which the government may address in the Budget 2021 to make IFSC more attractive are:

Banking units in IFSC

Banks set up in IFSC can invest through Foreign Portfolio Investment (FPI) route (post-seeking FPI license) into the domestic market and such income from FPI activity shall be governed by Section 115AD (special tax regime applicable for FPI). Such income is not eligible for a tax holiday. However, in order to encourage banks to set up in IFSC and to make it simpler for them to operate, the entire income of the banking unit, including income from FPI activity should be eligible for deduction under section 80LA.

Recently, non-delivery based forward trading has been permitted to banks in IFSC. In order to encourage their clients, i.e. the bank’s clients, such as hedge funds to also trade in the IFSC market, a tax exemption could be proposed for the foreign funds earning income from such trading, to move their trading to IFSC.  Without clarity on the taxation of NDF trades, there is an apprehension that it may be taxed at the maximum rate and hence the market may not pick up.

Relaxation of MAT for stock broking

The IFSCA has permitted eligible foreign entities to set up a branch office as a stockbroker or GIC. The income from such a branch would be eligible for tax holiday [section 80LA]. However, such a branch would be liable to pay tax on its book profits under the Minimum Alternate Tax (MAT) provisions disregarding tax holiday otherwise available. These units should be exempted from MAT provisions or MAT rate should be reduced. This would reduce the imbalance between the overall tax cost for such branches vis-a-vis stock broking units of domestic entities in IFSC which would be paying tax under the concessional tax regime provided under section 115BAA of the Act (post-the tax holiday period) and to whom MAT provisions are not applicable.

Objective criteria for fund managers

In order to address the likely invocation of General Anti-Avoidance Rules (‘GAAR’) by tax officers, objective criteria for fund managers in IFSC (e.g. certain minimum activities, employees, etc.) must be laid down. Further, the criteria could vary depending on the size of the fund or it could be spelt out for each fund while granting approval depending on the peculiarities of each structure. This would address subjectivity around the applicability and invocation of the GAAR provisions and provide certainty.

Dividend, repatriation of funds

The earlier benefit of dividend being tax-free should be reinstated for dividend income earned by the parent companies from their subsidiaries incorporated in IFSC. Also, the buy-back/income distribution tax should not be made applicable to companies set up in IFSC. This shall allow companies in IFSC to upstream profits / repatriate the capital in a tax-efficient manner. For all foreign investors/lenders, the ability to repatriate capital and ease of winding up operations is very important. 

Therefore, this would give a good boost to foreign investors. Equally important is the ease of winding up operations and repatriating balance capital. These ease of business measures would go a long way in boosting the confidence of foreign investors to come to IFSC.

The above are only a few thoughts to make IFSC more attractive. There’s lots more coming up in IFSC like aircraft leasing, which has been recently recognized as a financial services activity.  It is important that a light-touch regulatory regime be put in place to attract global lenders.

On the tax front also, it is important to make it easy for both the lessor and lessee to avoid tax leakage. The authority could consider blanket exemption from withholding tax for interest received/earned by financer (i.e. entity undertaking lending to entities engaged in aircraft leasing activity) on loan advanced to the entity undertaking aircraft leasing activity; to the interest portion of finance lease rentals earned/received by SPV from the airlines; and lease rentals payable by airlines to SPV.

This would reduce the administrative burden of obtaining Nil withholding tax certificate under section 197 of the Act given that units in IFSC (i.e. Financer/SPV) would be claiming tax holiday.

The mutual funds and foreign lending companies are other new and exciting businesses in IFSC to watch out for.  Here also it will be important to put in easy and lucid tax and regulatory policies. 

So far one of the key complaints of the foreign investors was on the ease of doing business in India. IFSCA, with its attractive policies, a very proactive regulator and a conducive business environment seems to have addressed these concerns.

The writer is Partner and Head, Financial Services Tax, KPMG in India and Nilesh Pal, CA

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Covid-19: UK records 23,275 new coronavirus cases, 1,200 deaths

Another 23,275 people in Britain have tested positive for Covid-19, bringing the total number of coronavirus cases in the country to 3,796,088, according to official figures released.

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Farmers' protest: Cong slams BJP 'for FIRs against Tharoor, 6 journalists

Priyanka Gandhi Vadra alleged that the ruling party has 'torn to shreds' the 'ignity of democracy' by this action.

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Sasikala will be discharged on Sunday, says Bengaluru Hospital

Expelled AIADMK leader V K Sasikala, undergoing treatment for COVID-19 in a hospital here, would be discharged on Sunday, a bulletin said. "Sasikala Natarajan completed 10 days of treatment today. She has been asymptomatic and maintaining saturation without oxygen for the past three days. As per protocol, she can be discharged from the hospital," Bangalore Medical College & Research Institute said in the bulletin. "The team of doctors attending to her has taken the decision that she is fit for discharge and she will be discharged tomorrow, but has been advised home quarantine," it said. Sasikala was released on Wednesday after she completed four years of imprisonment in a jail here in a case of disproportionate assets. Being treated for COVID-19, the 66-year-old close aide of former Tamil Nadu Chief Minister late J Jayalalithaa had remained in the hospital. Sasikala's return to Tamil Nadu is of political significance as it comes at a time when the southern state is

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Myntra revising its logo after complaint says it's 'insulting to women'

E-commerce platform Myntra is revising its logo after a complaint was filed with the Mumbai cyber police against the logo, terming it as 'offensive' and 'insulting to women'.

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Tata Motors says worried by chip shortage, Brexit impact on supplies

Tata Motors posted a 67.2% rise in profit for the last quarter of 2020, as Jaguar Land Rover sales improved in key markets like China.

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Union Budget 2021: Enhance tax benefit in interest on housing loan to Rs 3 lakh from current Rs 2 lakh

The Union Budget comes with a lot of expectations, especially amidst the recovery from the pandemic. We expect that the government’s agenda of ‘Housing for All’ will see a major push through this Budget as well.

As a Housing Finance Company (HFC) we also expect announcements which will enhance/ renew of prospective buyers towards owning a house and further propels investments in real estate as an asset class. Needless to say the real estate sector, along with manufacturing and services, is also a huge employment generator, and any positive activity in this sector aids the overall buoyancy in the economy.

We feel, keeping in mind the real estate price inflation over the last decade or so, as a first step, the government can consider enhancement in a tax benefit for interest in housing loan to Rs 3 lakh from the current levels of Rs 2 lakh. The limit can be higher up to Rs 4-5 lakh in metro locations, which will be in line with the real estate price difference which exists between metros and other major cities.

Also, the enhancement in 80C benefits especially with respect to limits for housing loan principal repayment by retail borrowers would be beneficial. The introduction of loss on housing property should be revisited and the limits on the same can be enhanced as well. This would encourage more end investments in the sector.

The initiative should be taken towards liquidity enhancement for small HFCs as well. Schemes/measures like Targeted Long Term Repo Operations or TLTRO and Partial Credit Guarantee or PCG etc., which have seen considerable success over the last few months, should be a part of business and be used by the regulator whenever there is an inherent need in system for the same. Also some kind of SOPs should be given to encourage mutual funds to move back into the debt capital markets so they can invest in long tenor bonds of investment-grade companies.

In the medium to long-term, the government may look at easing of External Commercial Borrowing (ECB) guidelines for HFCs. The investment concentration/group exposure limits etc. can be looked upon with a view to facilitating easier foreign currency borrowing for the sector.

In turn, this will ease the volatility in the domestic real estate markets. On the other hand, encouragement should be given to insurance funds/pension funds to invest in long term debt issuance of HFCs. This will help both parties on Asset Liability Management as HFCs look for long term debt and pension/insurance funds need long term debt investment avenues.

Introduction of housing bonds is another avenue which the government may look at where investment by retail investors is allowed. The finance minister may consider in granting special status to HFCs, at par with the banking sector. This will help in smoothening of any kind of Asset Liability Management mismatch for HFCs who are engaged in financing long tenor retail assets.

The thrust should be given to the initiative taken by the Prime Minister for the housing sector, which is ‘Housing for All’.

Overall, there are initiatives for both HFCs and the end-consumers which are expected, and we do hope that the Union Finance Minister Nirmala Sitharaman will look at the real estate sector favourably.

The writer MD and CEO, Shriram Housing Finance

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Union Budget 2021: Govt should speedily release GST refund dues to allow locked-up capital flow into economy

The current financial year 2020-21 has seen deep erosion in the economy with sources pegging the year to close with a contraction of 7.7 percent in the gross domestic product (GDP). However, after the steep drop in the first two quarters, the economy is seen to be recovering with positive GDP growth in the last two quarters. The manufacturing sector has shown a swift recovery from Q2 and is poised to deliver further growth provided the market is ready for it.

While the supply side has striven to recover its operations to pre-COVID levels, the demand is still lagging in several sectors of the economy. The government must focus its efforts firstly on improving demand in the domestic market. One major step towards this objective is to reduce the Goods and Service Tax (GST) rate for certain categories like furniture and air conditioners which are also identified as key thrust areas for investment by the government.

The inflationary pressure on commodities like metals and plastics will impact end-product prices -- both for the domestic and export markets. In order to improve demand, price of inputs and supply constraints should be managed within the bounds of the global markets. There should be predictability of prices and availability of the inputs over the short and medium-term which will, in turn, stabilise prices of the end-products, resulting in improved consumer confidence.

The government should speedily release all outstanding payments or tax refunds owed to service providers in the form of pending bills. This includes GST refund dues. This locked up capital would flow back into the economy through increased spending by the recipients.

On the supply side, import duty on components should be reduced in order to encourage local product manufacturing. The infrastructure for local component manufacturing for furniture is not yet well developed in India. The government should formulate standards for the import of finished goods and apply them effectively to prevent the import of sub-standard products into India.

In addition to the development of road and rail transport infrastructure, coastal and inland shipping should also be developed. It will reduce logistics costs and speed up supply substantially. While logistics has been given industry status, the warehousing space remains largely unorganised. The cold chain infrastructure also needs to be developed. The costs of exports from India should be benchmarked with leading ASEAN nations and corrective actions taken to make us more competitive.

Energy is a major factor in the economy. We must establish a national energy policy framework to support the development of a secure, sustainable and affordable energy system with the adoption of international best practices. There should be a greater focus on Renewable Energy and Open Access mechanism along with their cost-effectiveness and payment security. The implementation of renewable purchase obligations (RPOs) of utilities is very important.

We should continue to encourage investment in India’s energy sector and make the electric distribution companies (DISCOMs) debt-free and enable them to adopt the latest technologies. The government should adopt the direct benefit transfer approach for subsidy payments to consumers.

The writer is Executive Director and President, Godrej and Boyce Mfg. Co.

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Union Budget 2021: Govt should provide incentives to increase new GST registrations

The Goods and Service Tax (GST) is a comparatively new law in force that is triggered with various changes till it enters the area of perfection. It is natural to have changes and amendments in the law for a decent number of years after its application.

However, GST has witnessed so many amendment times and again that its original structure which was kept by the Parliament before the country seems to be taking new shape and a new variant of GST, considering the recent amendments and approach of amendments in the law, is quite brainstorming as well as full of complexities as far as taxpayer is concerned.

Here are some structural changes which I feel should be at the core of the discussion for smooth compliance with GST law:

Ensuring free flow of input tax credit

Recently various input tax credit (ITC) restriction measures have been introduced to fill up the loopholes, which fraudsters are taking advantages of.

The first and foremost change is the restriction in the claim of ITC. When an invoice is not furnished by the supplier or vendor, the ITC available before the amendment was 10 percent which is now replaced with 5 percent. Earlier, if you have made a bonafide purchase and the supplier failed to furnish the invoice details, a claim of 10 percent was allowed. The ITC will now be 105 percent of the invoice furnished. This rate is continuously reducing as ITC was 20 percent before, 10 percent and now it’s 5 percent . It can be said that this limit might abolish soon. This will hamper working capital requirement in small taxpayers resulting in the slow growth of the economy.

A threshold amount of Rs 25,000 to Rs. 50,000 per month shall be allowed to be claimed additionally (above 2A/2B)  along with above-said rule so that not only fraudsters can be stopped in time but small bonafide businessmen are also safeguarded adequately.

Cash crunch versus handholding of SME

Rule 86B is newly inserted that provides no ITC above 99 percent of Electronic Credit Ledger can be utilised by the taxpayer. This rule applies in cases where taxable supplies, i.e. turnover other than exempted supply of zero-rated supply above 50 lakhs per month. (These will majorly affect small and medium enterprises ranging from Rs 5 crore annual turnover to Rs 10-20 crores  per annum)

It is compulsory now to pay 1 percent in cash of Electronic cash ledger credit available. There are certain exceptions to this rule. Yet this provision will unnecessarily defeat the purpose of seamless credit being promised by the government at the time of the launch of GST.

More automation than manual

India is a vast country and more online automated processes and systems are required with ease of implementation. However, recently it has been noticed that complexities have been increased. Some of the noticeable manual powers given to GST Officers are:

• System-based registration had a time limit of 3 days earlier which is now extended to 7 days from the date of filing the registration application.
• Where the applicant has not opted for Adhaar verification and the department feels necessary to have physical verification for granting registration--the limit was of 7 days which is now extended to 30 days’ time limit.

GST registration cancellation/suspension powers to officers

The Goods and Service Tax department has the power to suspend the GSTIN of a holder in the following small irregularities:-

• If the GSTIN holder avails credit more than admissible under Rule 16 of CGST Act, 2017
• If there is variation in the taxable value and tax payable under GSTR 3B and GSTR 1
• If Rule 86B is violated department may cancel the registration.

The most draconian part is: there is no Concept of Opportunity of being heard before suspension to the GSTIN holder to safeguard its registration. It is a very crucial situation where the registration gets cancelled. Every business can fight against the raised orders of penalty and interest, but a registration being cancelled is a big issue as the supply will stop, the whole business will be stopped and for the same, no opportunity of being heard will be given is a grey provision.

Simplify GST return structure

The blocking of GSTR1 if GSTR3B is not filled. It was observed by the government that GSTR1 was filed by the taxpayer as the customer was getting credit and when it comes to payment of GST under GSTR3B, taxpayers were avoiding filing the return. Hence, Rule 59 was amended from blockage of E-way bill to blockage of GSTR1 as well.

Such provision applies when a monthly return is not filled GSTR3B for 2 months u/s 37, a quarterly return is not filled GSTR3B for the previous quarter and the Rule 86B is applicable-GSTR 3B not filled. There is a huge need to simplify this return process so that heavy compliance and the burden on the part of the taxpayer can be minimised.

Changes concerning E-way bill

Earlier there was a provision that the E-way bill will be valid 100 km/day. That is before a recent amendment on every 100 km one day (24 hours) was provided, but now this limit has been made 200 km/day. This provision has made business difficult as now we need to travel more in less time and this structural change is very crucial for smooth functioning

Rationalisation of GST rates

GST, when introduced, was promised to be One Nation One Tax but due to the federal structure of our country, we were gifted CGST, SGST, and IGST. Moreover, tax rates are not one. These range from 3 percent to 28 percent in various slabs. Simplification in the form of a lower number of tax rates to ensure easement in the practical world is the need of the hour. The government may consider deriving two rates by merging 5 percent, 12 percent, and 18 percent.

Widening of GST base

A large part of government machinery is focused on increasing revenue collection from an already registered person. However, a substantial section of business (especially where cash is the major dealing mode) are still out of the ambit. The government should incentivise new registration so as to boost the tax base.

We may conclude that regarding the major aspects stated above, it was clarified by the government that such actions are only applicable to the taxpayers who are using malicious ways to save tax under the act. But none of the provisions had any kind of clarification that other genuine taxpayers will be safe.

It can be said that the government intended to clear the circulation of fake invoices and dummy business taking action but the genuine registered taxpayer will have to pay more attention to the provisions and compliances rather than doing business. Such amendments do not have revenue generation for the government but only rules and restrictions that will create a fear among the taxpayers.

The writer, a qualified CPA (Ireland) and Fellow Chartered Accountant (India) is founder and chairman, HostBooks Ltd

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No change for 3rd day, petrol stable at Rs 86.30 a ltr, diesel at Rs 76.48

Rates differ from state to state, depending on value-added tax (VAT). Petrol and diesel prices are revised on a daily basis in line with benchmark international price and foreign exchange rates

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Union Budget 2021: Detaching banks from attachments under economic offences laws is need of the hour

Legislations dealing with economic offences like the Prevention of Money Laundering Act, 2002 (‘Money Laundering Law’) and the Prohibition of Benami Property Transaction Act, 1988 (‘Benami Property Law’) have remained dormant for many years in the past. In fact, the latter legislation got its teeth only in the year 2016, when it was amended to its current form.

These legislations are being used post-2014 and 2016 quite vociferously to bring defaulting persons to justice. The provisions of the two legislations provide the authorities concerned the power to attach properties, which are either proceeds of crime or are involved in a benami transaction.

Attachment of property is an interim measure, which primarily puts a bar on further transfer of property. Attachment is resorted to by the government to ensure that it is not deprived of the opportunity to eventually confiscate/ recover the proceeds of crime or benami property, which has either been ill-gotten by violating laws or has been concealed to avoid payment of taxes, etc.

Though the purpose behind introducing the power of attachment under money laundering and benami property law is for the above-mentioned purposes, such extraordinary power is being increasingly used by the authorities concerned in an arbitrary manner, and such use is creating additional problems for the banking sector which is already grappling with the problem of ever-increasing Non-Performing Assets.

The arbitrariness in the exercise of power is evident wherein the properties mortgaged with banks are attached as the property of the mortgagor on the alleged ground that they are proceeds of crime or benami property. Whilst, in reality, neither the banks nor the attached properties have any nexus with the alleged offence, and the property is attached on a protective basis to ensure recovery.

It is important to understand that loans are provided by banks as part of their business and to secure repayment of such loan, an immovable property is mortgaged. Banks carry out proper due diligence about ownership of the property and about any preexisting charges/ encumbrances upon it. Despite ensuring the above, when the mortgaged property is attached for alleged violation of these laws, the banks become the unintended victims of crime exposing them to the perils of irrecoverable loans.

Once attached, the banks are left with no option but to contest and wait for the outcome of the proceedings. If the proceedings are decided in favour of the mortgagor, the banks stand a chance to recover their dues. In case the proceedings lead to an adverse decision, the same would result in confiscation of the mortgaged property. Effectively, general public, who have deposited/ invested money with the banks, eventually become the victims of these attachments proceedings under the economic offences laws and pay for the crimes committed by someone else.

In the first place, there is lack of clarity that whether a property, mortgaged with banks, can at all be attached by authorities concerned under the Money Laundering and the Benami Property Law for alleged offences committed by the mortgagor, independent of the mortgaged property. Secondly, where a mortgagor is not able to make repayment of loan amount and such loan is secured by way of mortgage, whether the banks can approach the Debt Recovery Tribunal (DRT), in terms of the Recovery of Debts and Bankruptcy Act (RDBA) and the SARFAESI law, for the recovery of the loan amount. However, owing to the lack of clarity on the first point, will it mean that even if proceedings are instituted in DRT, the interests of banks takes a secondary place vis-a-vis that of the government under these laws.

From a legal standpoint, the Supreme Court answered the question and held that a law which comes later in time shall have primacy over the pre-existing law because while bringing into existence a new legislation, the legislature was conscious of the existing legislation. Accordingly, basis the above it could have been said that legislations like the SARFAESI and RDBA will prevail over the money laundering and the benami transaction law as the former came into existence post the coming into effect of the latter. Therefore, any attachment made under the Money Laundering and Benami Property law will be subject to the bona fide interest of the banks protected under the later legislations.

However, the Delhi High Court while deciding whether SARFAESI, RDBA and Insolvency and Bankruptcy Code (IBC) laws will prevail over the money laundering law, ruled that the objects and reasons of bringing into existence the four legislations are distinct and each law operating in a different field and therefore, it cannot be said the former legislation will prevail over the latter legislation.

However, the Appellate Tribunal for Forfeited Properties has taken a view that if a bank is an innocent party, the mortgaged properties cannot be attached inasmuch as the same would go on to destroy the banking system.

The government has tried to ameliorate the situation to some extent by amending the IBC. The amendment provides that the property of a corporate debtor cannot be attached where an alleged offence has been committed prior to the commencement of Corporate Insolvency Resolution Process and which is part of an approved resolution plan.

Similar to the above amendment in IBC, it is the need of the hour that the government provides a solution to ease the pain of the banking sector from the scourge of attachments made by the authorities, which not only goes to substantially reduces the chances of recoveries by the banks from the defaulting parties, but also burdens them and the judicial system with unnecessary and avoidable litigation.

S Vasudevan is executive partner and Shashank Sharma is principal associate at Lakshmikumaran and Sridharan Attorneys

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Union Budget 2021: Liberalisation of FDI in insurance should be given top priority

The first-ever paperless fiscal Budget will be presented by Finance Minister Nirmala Sitharaman on 1 February 2021. The expected announcements bear the heavyweight of people’s expectations stemming from the economic downturn caused by the ongoing COVID-19 pandemic. While India has fared relatively well through the pandemic considering its population and healthcare infrastructure prevalent prior to the pandemic, the biggest challenge lies in nursing the economy which was anyway showing signs of slowdown even prior to the pandemic.

In 2020, the government announced multiple stimulus packages to aid ailing businesses and the workforce. However, the ongoing pandemic has emphasised the importance of insurance (health and life) as a form of financial protection for oneself and family, reiterating the unpredictability of life-altering events. While there has been an increased awareness of insurance offerings among consumers, especially term and health insurance, significant headway has to be made in terms of public awareness and public acceptance of insurance continues to be a push product in India.  Considering the importance of insurance to the infrastructure sector and overall economy, the sector is hopeful that the finance minister will take the following measures in the upcoming Budget to help increase insurance penetration:

Increase in FDI limits

The finance minister in her maiden Budget speech in 2019 had highlighted the government’s intent to enhance the Foreign Direct Investments (FDI) limit in insurance companies. However, thereafter, there has been no further announcement on this matter. The liberalisation of FDI in insurance companies should be given a top priority and should be implemented in this year’s Budget. Given the current uncertainty and economic slowdown, the government should increase the FDI limit in the insurance sector to 74 percent without insisting on the requirement of it being ‘Indian controlled’ as this will help the sector in bringing better technical know-how, innovation and improving insurance penetration, thereby augmenting the efforts of the government to revive the economy.

Separate tax deduction for payment of life insurance premium

In Union Budget 2020, the finance minister announced a new optional tax regime for individual taxpayers wherein lower tax rates were introduced, and the taxpayers are required to forgo the claim of deduction under section 80C of the Income-tax Act, 1961 (the Act).  Currently, under section 80C of the Act, among other deductions such as payments made towards employee’s provident fund etc, the taxpayer can claim a deduction of life insurance premium within the overall limit Rs 1,50,000.

It is a well-recognised fact that many individual taxpayers in India buy life insurance products to claim deduction under the Act. Moreover, the COVID-19 pandemic has reinforced the need for sufficient health as well as life insurance cover given life uncertainty. Hence, a separate deduction of the health insurance premium paid under section 80D of the Act should be allowed to taxpayers even under the new optional tax regime. Moreover, considering the higher cost of health insurance premiums, the government should revisit the limits currently available for claiming deduction of health insurance premium under section 80D of the Act and revise the same according to market conditions.

Reduction in tax on profits, gains

As per section 115B of the Act, the profits and gains from life insurance business are chargeable to tax at the rate of 12.5 percent. The tax rate of 12.5 percent was introduced in 1976 when the corporate tax rates ranged from 45 percent to 65 percent. In 2019, the government of India reduced the headline corporate tax rate to 22 percent (excluding surcharge and cess) for domestic companies and 15 percent (excluding surcharge and cess) for new manufacturing companies, subject to certain conditions. It is time that the government revisits corporate tax rates for life insurance companies and reduces the same since it could have a positive impact on cash flows and profitability of life insurance companies.

Extended carry forward for business losses

It is a well-recognised fact that life insurance companies have a longer gestation period vis-à-vis many other firms and still many of them continue to make losses even after 10 years of existence. Moreover, COVID-19 pandemic has further aggravated the financial position of life insurance companies. Given this, it is the right time for the government to allow an extended period of 12 years for the carryforward of losses incurred by life insurance companies.

Reforms for non-life insurance business

Last year, non-life insurance companies welcomed the amendment regarding allowability of deduction for unpaid statutory liabilities under section 43B of the Act in the year of payment. However, non-life insurance companies were also expecting a similar amendment regarding allowability of expenses in the year of compliance with withholding tax provisions, excluding reversal of provision in the year of credit to profit and loss account which was earlier disallowed. Non-life insurance companies have hopes that Budget 2021 would provide for such an amendment and bring clarity in their taxation mechanism.

The Indian branch of foreign reinsurers was hopeful that a

• Special code of taxation, that is fair and unambiguous would be introduced for them,
• Process of obtaining blanket NIL withholding tax certificate would be rationalised on similar lines as currently applicable to Indian branches of foreign banks in the Budget 2020.

While the issue related to the process of obtaining the blanket Nil withholding tax certificate has been resolved in September 2020, ambiguity still remains in the manner in which such reinsurance branches would be taxed in India. Reinsurance branches are hoping that Budget 2021 would introduce for them a special code of taxation that is fair and unambiguous.

The finance Minister recently promised to present a ‘never before’ like Union Budget. Given this, we hope that Budget 2021 would bring much-needed bold reforms to boost the Indian economy.

The writer is Partner and Head of Financial Services Tax, KPMG in India. Bharat Jain, CA, also contributed to the article.

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Disturbed Punjab suits Pakistan's policies, says CM Capt Amarinder Singh

He said that there has been an increase in weapons coming from Pakistan since October when the farmers began their agitation against the three farm laws

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Africa CDC emphasizes crucial need to intensify Covid-19 testing, tracing

"Testing is the number one tool to fight this pandemic, because without testing we will be fighting blindly," said John Nkengasong, Director of the Africa CDC

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Coronavirus LIVE: India cases at 102,587,260; global tally nears 102.6 mn

Coronavirus live updates: Globally, nearly 102.6 million people have been infected by the virus and the death toll stands at 2,214,227

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Not bound by treaty for prohibition of nuclear weapons, says Pakistan

Pakistani Foreign Office Spokesperson Zahid Hafeez Chaudhri on Friday stated that this treaty neither forms a part of nor contributes to the development of customary international law in any manner

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Jaishankar and Blinken talk over phone, reaffirm growing US-India ties

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Nearly 7,000 Mexicans reported as disappeared in 2020, 22% fall since 2019

Assistant Secretary for Human Rights Alejandro Encinas said the number of clandestine graves found dropped by third last year and the number of bodies recovered in those graves - 1,086 - fell by 18%

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Two terrorists surrender to security forces in Pulwma following encounter

"One terrorist who was injured in the encounter has been shifted to hospital for medical treatment"

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US Defense Secy, Italian counterpart discuss threats from China, Russia

Secretary Austin expressed gratitude toward Italy for proceeding to have US powers and noticed the significance of the presence of US powers in Italy to NATO's aggregate security

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Brazil neighbors limit travel to halt new coronavirus strain from spreading

The Brazilian variant was first identified in four travelers who had been in Brazil and were tested at an airport outside Tokyo, Japan

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New Covid-19 strains could prolong second wave of infections in Africa: WHO

According to the WHO, the 501 Y.V2 variant that was initially discovered in South Africa is behind the unprecedented spike in infections in the continent's second-largest economy

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EU authorises AstraZeneca Covid-19 vaccine, 400 mn doses to be available

It was the third COVID-19 vaccine authorized in the EU, after Pfizer/BioNTech and Moderna vaccines were given the greenlights in late December and early January

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Morocco starts vaccinating drive for medics en masse against coronavirus

Morocco aims to get 66 million doses of the two vaccines, covering about 80% of its 35 million population

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UK Covid variant to become more dominant in US by early spring, says Fauci

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Blinken dials Pak FM Qureshi seeking accountability in Daniel Pearl case

State Department Spokesperson Ned Price said on Friday that Blinken reinforced America's concern over Pakistan Supreme Court's ruling acquitting Pearl's killers

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France to close its borders to arrivals from outside European Union

French Prime Minister Jean Castex announced the new measure Friday night after an emergency government health security meeting at the presidential palace, warning of a "great risk" from new variant

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Union Budget 2021: Digitisation key to solving stumbling blocks in logistics sector

When the pandemic struck in 2020, one of the few industrial sectors that were able to help the ecosystem was logistics. However, it faced stumbling blocks faced as the sector is not fully digitised. There is a pressing need for a complete digital transformation of the industry to handle international shipments efficiently. Logistics firms shared their concerns and wish list from Budget 2021 with Firstpost.

Dhruvil Sanghvi, Chief Executive Officer, LogiNext

Global and national supply chain is of paramount criticality in 2021 and beyond. Currently, there is a very high degree of compliance and paperwork which makes it difficult for technology companies to serve the global audience and forces companies to shift base outside the country. Urgent steps in this direction will help high growth companies keep base in India, generate employment across the spectrum and help revive the national economy after the shock of the pandemic.

Sanjay Bhatia, CO-Founder, Freightwalla

We hope the Union Budget will announce suitable investments towards the digitization of the shipping and logistics sector. A leap towards this initiative will bring in transparency, reduction in cost, and better cost management. Digitisation should also include implementing smart single-window clearance for smooth processing of shipments or approvals. Such initiatives will prepare us to tackle any untoward incidences in the future, like the current pandemic. Investments in Artificial Intelligence, Machine Learning, and BlockChain technologies can facilitate complete transformation. It can boost productivity in every sector. There is also an expectation that the proposed National Logistics Policy may be announced.

Sonesh Jain, EIR, WheelsEye

Some key expectations from the Budget are the implementation of uniform and subsidised diesel rates, especially for transporters with less than five vehicles; lowered GST slabs for small businessmen to boost profitability; allowing NETC and NPCI to solve toll or traffic-related payment disputes in real-time; empowering software and hardware-related innovation, partner with startups to solve on-ground real problems; develop a data and resource centre to enable easy availability of the logistics related databases and statistical information; standard GPS and other technology-related policies in order to automate toll collection, business operations and increase the safety of the commercial vehicles; and to develop a better custom documentation process and an integrated platform with access to all export formalities for bringing ease and transparency among the importers and exporters.

Alok Sharma, CEO and Co-founder, NebulARC

As India gears up for COVID-19 vaccine distribution this year, the logistics sector needs to gear up big time to ensure a smooth supply chain. In Budget 2021, we expect the government to invest in the digitisation of supply chain management with a focus on new technologies like AI, Machine learning, and IoT. These technologies will eventually decrease the pressure on pharma companies in effectively managing logistics. The government should also consider lowering ocean freight rates that are driven by the demand-supply scenario. This will also reduce the shortage of containers due to port congestion and delays last year. Besides this, we also expect the government to take a proactive step in funding large port construction for container trade to fuel the sector's growth.

Narasimhan Raghavan, Director, Raag Technologies and Services

The year 2020 has been a game-changer for the logistics sector. As we await Budget 2021, we are expecting the government to take steps to further strengthen the sector with reforms related to GST, and most importantly accelerate the implementation of initiatives under the Sagarmala and Bharatmala projects. It must be noted that logistics is also one of the highest employment-generating sectors currently. Therefore, the government must look at creating a thriving ecosystem for logistics leading to the overall economic growth.

We are expecting that the government will take further steps to strengthen the logistics sector with reforms related to GST, and most importantly accelerate the implementation of initiatives under the Sagarmala and Bharatmala projects. It must be noted that logistics is also one of the highest employment-generating sectors currently. Therefore, the government must look at creating a thriving ecosystem for logistics leading to the overall economic growth.

Abhik Mitra, MD and CEO, Spoton Logistics

With logistics holding the economy together even during the COVID-19 pandemic and set to play an even more crucial role in current times, the government must look at providing the much-required financial and infrastructural support to the sector. With India's aim to reduce the logistics cost from the current 14 percent of GDP to less than 10 percent, it is imperative for the government to bring about a groundbreaking transformation in the logistics sector that encapsulates an increased use of digital technologies and automation. We urge the government to take dedicated measures to boost digitalisation so as to drive transparency and bring in the required predictability in logistics.

Prem Kishan Dass Gupta, Chairman and MD, Gateway Distriparks

We expect strong support and initiatives for the EXIM industry which will help in increasing volumes. We hope the 2021 Budget will have enhanced allocation to the Indian Railways for completion of the Western Dedicated Freight Corridor (DFC) project at the earliest so that the industry can benefit from the new rail infrastructure at this time when the focus is to increase manufacturing in India.

As a Logistics company, we are looking at the government’s increased investment in infrastructure, which will provide further impetus to boost the overall economy.

Rhitiman Majumder, Co-founder, Pickrr

The logistics costs in the country at around 14 percent of the GDP are still amongst the highest in the world and this is a key disadvantage for the Indian Industry to compete in the international markets. In Budget 2021, at the first instance, I would urge the government to create an enabling environment for the digitisation of documentation and the seamless transfer of documents from one agency to another reducing the compliance burden on the logistic service provider. Further, currently every corporate in India has to file more than 150 compliances to various government departments through the year, this needs to be rationalised and reduced.

Saahil Goel, CEO and Co-founder, Shiprocket

Despite the tough times induced by COVID-19, the Direct to Consumer (D2C) eCommerce sector grew at a rapid pace last year. However, a National Retail Policy will help boost the sector even further. As small businesses are going online, we expect the Union Budget to focus on the improvisation of digital infrastructure in tier 2 and tier 3 cities. Better internet connectivity in rural areas will further stimulate the demand for eCommerce. Furthermore, measures to enhance warehousing would also benefit this sector immensely.

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Union Budget 2021: Govt should invest in clinical trials, enable policies to empower pharma sector

In the wake of the pandemic that struck in 2020 paralysing businesses and lives of people, the expectations from Budget 2021 centre around the allocation of higher spending towards healthcare. The pandemic brought home the need for a strong healthcare infrastructure to ensure a sustainable economy. Experts in the sector, pharmaceutical firms and startups share their expectations from Budget 2021 with Firstpost.

Nikhil Chopra, CEO and Whole Time Director, JB Chemicals and Pharmaceuticals

Budget 2021 is expected to focus on proposals that revive demand and boost economic activity. To give the necessary fillip to the Indian pharma and healthcare sector, we expect the government to form enabling policies that will empower the industry to establish India as the pharmaceutical hub for the world. While the Budget should continue to ensure wider implementation of schemes like Ayushman Bharat, as against the marginal increase in budget allocation for healthcare every year, Budget 2021 should put health on top priority and increase spends on public health substantially from previous years.

Azad Moopen, Founder, Chairman and MD, Aster DM Healthcare

It is important to at least double the healthcare budget from last year's meagre allocation. This would help to improve access to affordable care for the masses. The Budget should also be able to create capacities for vaccinating India’s large population against COVID-19 which is key to end the pandemic and revive the economy. Allocation of sufficient funds to cover about 40 percent of the low-income population who fall under the Ayushman Bharat scheme through free vaccination should help in addressing this.

Sanjiv Navangul, MD and CEO, Bharat Serums and Vaccines Ltd

The need of the hour for the industry is the availability and affordability of life-saving drugs for our billion-plus populace. The Union Budget should address long-standing special incentives and subsidies to encourage indigenous drugs and API production in line with Atmanirbharta. There should be tax cuts on life-saving drugs to make them affordable. We must also provide full medical cover to proactively help indisposed and senior citizens. Grants to Indian companies that make novel drugs should be made available to speed up patents and inventions. Flexible pricing policies that can encourage up to 7 percent MRP increase year-on-year and giving 300 percent deduction for R and D expenses will be beneficial for the industry.

RB Smarta, Managing Director, Interlink

Budget 2021 needs to bring strategic and implementable ideas on board to make them real in India. The central government can play a crucial role in terms of enabling health policies, programmes and resources to health. Understanding it is a state issue, policy, procedures and SOPs need to be formed by the centre to evaluate the participation of states.  India must get its coveted position in API in the world and PLI-like schemes and allocation will reduce imports and increase exports. Pharma entrenchment in Artificial intelligence and machine learning needs to be promoted and special allocation for pharma startups with time-bound progress should be established.

Suresh Raju Founder, Fitday.in

Post-pandemic, India is going to be the country of choice for the healthcare sector. The current imports of $2.7 billion worth of nutraceuticals have significantly primed India to attract foreign investments. The government should invest in clinical trials, fund universities and decipher hidden Ayurvedic treatments and ancient texts. The FSSAI licensing should have a more stringent and streamlined department just for nutraceuticals.

DS Negi, CEO Rajiv Gandhi Cancer Institute and Research Centre

Ayushman Bharat is no doubt a highly positive step towards attaining the objective of universal healthcare. However, more allocation needs to be apportioned for its continued success. We expect the government to apportion larger funds towards preventive health and wellness segments. India woefully lacks in hospital beds required for its populace. Higher tax incentives to the private sector towards modernising medical facilities will go a long way in ensuring better healthcare, more investments and thereby generate more employment.

G Surender Rao, MD, Yashoda Hospitals

I expect the government to continue to strengthen health reforms from the previous years to boost domestic health infrastructure, provide jobs, and increase health insurance penetration with additional tax benefits. Health insurance should be made a mandatory subscription for every voter in the country and by virtue of this, compliance will help reduce the burden and out-of-pocket expense for all voters. With access to the country’s ‘COVID-19 Emergency Response and Health System’ established by the GoI, we now need to adopt an extensive, multifarious allocation and investments plan. While building a strong infrastructure, it is essential that additional funds be specially allocated towards training medical staff, establishing and improving the supply chain of vaccines, medicines and accessibility.

Sanjay Joshi, Regional Managing Principal and Head – Asia, ZS Associates

The year 2020 was a whirlwind for the healthcare sector and has brought everyone’s attention to the problem areas. It has made everyone realise the importance of prioritising the public healthcare requirements and hence it is anticipated that Budget 2021 will bring policies that will bridge the gaps in the current healthcare landscape.

Saurabh Kochhar, Founder and CEO, Meddo

Last year, the Budget allocated only 1.29 percent of the GDP to healthcare which should now increase substantially. We have to have enough funding to achieve our goal of affordable and accessible healthcare. It is time that out-patient care be mandatorily put under the aegis of health insurance cover including Ayushman Bharat to make it more accessible. Reduction of GST rates on life-saving drugs can pave the way for affordable medicine, and adequate tax holidays and concessions for health entrepreneurs, R&D, etc. can usher a golden era of innovation-driven healthcare in our country.

Vivek Desai, Founder and MD, Hosmac India

There is an urgent need for more medical colleges as there is a massive deficit of doctors, nurses, and paramedical staff. The authorities might have to give incentives to the private sector to set up nursing and paramedical educational institutions. The private sector needs a structured financing scheme like the housing finance sector's softer interest regime. Hospital loans are usually given a 5-10 year bandwidth, and that's not enough. Healthcare sector needs structured finance schemes and a more extended moratorium, as unlike sectors like IT, the healthcare sector takes a more extended period to attain break-even. Some rebates on property tax and electricity tariff should also be given for hospitals, as they spend around 3 percent of their income to pay these taxes.

Yogesh Mudras, MD, Informa Markets

We are expecting a healthcare-focused budget which is the need of the hour. We expect the government to especially focus on primary healthcare infrastructure that needs huge improvement in terms of improved access to healthcare for low-income households.

Dipali Mathur Dayal, Co-Founder and CEO, Super Smelly

The year 2020 was tough and a good, strong Budget will come as a relief. We hope it is consumption-friendly, leaving more money in the hands of people to catalyse demand in the economy. Moreover, for startups, we look forward to the simplification of GST and tax relaxation in ESOPs. MSME and startups would need government support to revive businesses and to continue to generate employment. Therefore, easy and cheaper access to credit would certainly bring relief. The personal care sector, in particular, needs steady budgetary support. There is a nationwide movement to transcend from large-scale toxin-based products from international brands to natural, homegrown, and toxin-free brands. Therefore it is important to emphasize the importance of Make in India and vocal for local to strengthen the country’s economy.

Vishal Kaushik, Co-Founder and MD, Upakarma Ayurveda

We are expecting the GST to be brought down from the current 12 percent which is levied on products that have the license to sell as branded Ayurvedic medicines. This will further help cost reduction and easy accessibility of products. The government can also look at providing funds for Ayurvedic practitioners and centres, which will further encourage the domestic and offshore investors to put faith in India for new product developments.

RN Mohanty, CEO, Sightsavers India

With the pandemic raging on, we expect higher spending on healthcare in Budget 2021. The healthcare sector needs immediate attention, especially because most people do not have access to it. Preventive health check-ups can bring down the disease burden substantially with early detection and treatment. Apart from vaccination, government funding will strengthen the healthcare system at different levels which have been stretched in the recent pandemic.

Ameera Shah, Managing Director, Metropolis Healthcare

The lack of adequate public health infrastructure in India combined with a high out-of-pocket expenditure imposes a high financial burden on Indian households and therefore increasing the healthcare budget allocation in the coming decade is of utmost importance. The need of the hour is to strengthen the provisioning of healthcare services through public-private partnerships. This will not only ensure quality healthcare for all citizens but also encourage much-needed private investments into the industry. The government should also allocate funds towards universal vaccine coverage for all citizens and increased testing in order to combat a further surge in infections.

RB Smarta, Managing Director, Interlink consultancy

Strategically, as planned in National Health Policy-2017, India has an intent of allocating 2.5 percent of GDP by 2025 from existing 1.3 percent of GDP inclusive of public health is very minuscule compared to OECD countries average of 7.6 percent of GDP. A lot needs to be done in an evolving manner to implement long-term strategic intent of a healthy India. The government can play a crucial role in terms of enabling health policies, programmes and resources to health. Understanding it is a state issue, policy, procedures and SOPs need to be formed by central to evaluate the participation of states. Pharma entrenchment in artificial intelligence and machine learning needs to be promoted and special allocation for pharma start-ups with time-bound progress should be established.

Jitendra Chouksey, Founder, FITTR

It is imperative that the upcoming Union Budget 2021-22 gives more thrust to investment in technology. This will help create a conducive environment for emerging technologies such as machine learning and artificial intelligence. It is equally important that there is a focus on reforms and policies that are favourable for the entire startup ecosystem. We believe that the Fit India Movement, which was introduced in August 2019, should be aligned with tech-driven SMEs and MSMEs. This step will not just benefit the businesses but can also take the scheme up a notch. The Government of India should also look at expanding the National Digital Health Mission (NDHM) that was launched earlier last year. A proper focus and dedicated framework comprising the public and private players can strengthen the mission.

Sanjaya Mariwala, Founder President Association of Herbal and Nutraceutical Manufacturers of India; Executive Chairman and MD OmniActive Health Technologies

We expect the government to primarily focus on R&D and innovation in this Union Budget 2021. Our ask from the government is based on four pillars, which will empower the nutraceuticals industry in India: Establish a cross-ministerial task force under a Joint Secretary at the Ministry of Commerce and Industry that creates a plan and sets a goal to make nutraceuticals into a $25 billion industry by 2030 and leverage the huge domestic and export potential that the AYUSH, herbal and nutraceutical industry offers; institutionalise a PPP model to contribute monetarily and non-monetarily towards R and D and innovation needed at all levels of research, technology and manufacturing in AYUSH and herbal sector; funding support for MSMEs either at a zero percent or low rate of interest and tax incentives for investments made in R&D and innovation; and initiate Bulk Drug Parks and Production Linked Incentive (PLI) scheme specifically for the herbal and nutraceutical industry.

Carlos Montiel, Vice President, Latin America and South Asia, Asia, ResMed

Considering the vulnerabilities, the Government of India should focus on the expansion and strengthening of the digital healthcare ecosystem in India while prioritising policies for patient’s data privacy. Investment in infrastructure for the development of additional and advanced medical colleges along with mandatory inclusion of telemedicine in the course details should be a priority to enable and prepare the next generation of health professionals this digital phase.

Dharminder Nagar, MD, Paras Healthcare

The Budget should focus on increasing public spending on healthcare. Other than that, there is a significant need for reviving the local demand. There is an urgent need to provide the viability gap funding by the government for investors who set up hospitals in smaller cities to increase the provider base for Ayushman Bharat. It can be coupled with an increase of package rates of Ayushman Bharat for more hospitals.

Amritah Sandhu, Founder and Director, CareIndia Health

It is crucial that the government plans on how to improve primary healthcare infrastructure in tier II and III cities. It may be advantageous to work alongside private players, to ensure doctors are actually present in these facilities. Private players can be incentivised, both financially and in terms of easier regulations to take up this challenge. The government should tighten the licensing norms for both existing and new pharmacies, where they inspect that all staff selling medicines are certified pharmacists and keep records of prescription and schedule X drugs.

Gurpreet Sandhu, President, Council for Healthcare and Pharma

With poor historical spends on healthcare, there is an urgent need to raise the allocation substantially for health as a proportion of GDP with particular attention to R and D in biotech, epidemiology and pharma including vaccines while ramping up of healthcare infrastructure. Keeping in mind the abysmal doctor-patient ratio, we need to scale up our medical education infrastructure, both quantitatively and qualitatively. There must also be added focus on preventing infections in the hospital environment while also addressing the creeping problem of antibiotic and antimicrobial resistance.

Neha Motwani, CEO and Founder, Fitternity

There is a critical need to invest in preventive care and fitness. Offer tax incentives to organisations committed to ensuring the health and fitness of people.

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Decoded: Seizing India's foreign assets won't be easy for Cairn Energy

India can challenge the award in the courts of the seat of the arbitration - in this case, the Dutch courts

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Record steel prices help firms acquired under insolvency code out of red

Tata Steel BSL has posted a profit of Rs 913.19 crore in the December quarter, its highest since its acquisition by Tata Steel in 2018

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Best of BS Opinion: Budget for the victims, the Wall Street game, and more

Here's a selection of Business Standard opinion pieces for the day

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US ready to prosecute Omar, says Blinken as Pak SC acquits Pearl's killer

The Pakistani Supreme Court's decision to acquit Ahmed Omar Saeed Sheikh "is an affront to terrorism victims everywhere, including in Pakistan," Blinken said

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US State Secy, EU Representative discuss 'strong cooperation' on China

"The Secretary and the High Representative also agreed to continue strong US-EU cooperation on issues related to China," the statement said.

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General Motors sets 2040 target date to achieve Global Carbon Neutrality

GM said it will offer 30 all-electric models globally by mid-decade and 40 percent of the company's US models offered will be battery electric vehicles by the end of 2025, the release added

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Iran FM Javad Zarif calls Donald Trump's Iran policy 'maximum failure'

Zarif made the remarks on social media after US Secretary of State Antony Blinken called on Iran to "come back into full compliance" with the 2015 nuclear deal before Washington does "the same thing"

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Novavax vaccine seems 89% effective against coronavirus in UK study

The study of 15,000 people in Britain is still underway. But an interim analysis found 62 participants so far have been diagnosed with COVID-19 - only six of them in the group that got vaccine

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From lifestyle to tourism: Saudi crown prince announces plans for Riyadh

Saudi Arabia plans to increase the residents of Riyadh from 7.5 million to 15-20 million in 2030

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India's vaccine production capacity is best asset world has today: UN chief

"I believe that the manufacturing capability of India is the perfect asset that the world has immediately. I hope the world understands that it should be absolutely used," he said

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US State Secy speaks with Afghan President, discusses bilateral partnership

The Secretary reiterated his desire for all Afghan leaders to support this historic opportunity for peace while preserving the progress made over the last 20 years

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US: Palm Beach considers options as Donald Trump remains at Mar-a-Lago

Town Manager Kirk Blouin said in an email Thursday that Palm Beach is examining its options and the matter might be discussed at the town council's February meeting

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Robinhood, hedge funds and short squeezes: Key points to know about the GameStop insanity

The internet and stock market are aflame over GameStop, the video game retailer whose stock is suddenly the darling of day traders who are putting the squeeze on Wall Street’s big players.

The stakes are enormous: The surge in trading has driven GameStop’s value up by more than $10 billion as of Wednesday.

GameStop — that feature of malls and shopping centres across the USA — was worth about $2 billion in December. Now it is worth $24 billion, roughly the same as the meat giant Tyson and the fuel refiner Valero Energy. On paper, at least.

Exactly why has to do with a mix of traditional investing, rampant enthusiasm, stock-market mechanics and the belief that anyone with a Robinhood account can meme a fortune into existence.

What’s going on?

It’s called a short squeeze, and it involves investors betting on which way a stock will go — up or down. These bets are placed by buying the shares themselves, or stock options, which we’ll grossly oversimplify here.

Investors who bet against a stock are called “shorts.” In GameStop’s case, the shorts include at least two big hedge funds.

Shorting a stock essentially means borrowing shares from a broker and selling them, with the agreement you’ll return the shares later. When the price falls, you buy back the shares and pocket the difference. But shorting a stock is risky — if the price rises, you can lose big.

Sometimes you just make a bad bet. But you can also lose if someone tries to push up the price by buying lots of shares, even though the company isn’t doing anything different.

This is the squeeze.

Shorts have to close their position — that is, buy up the shares they owe their brokers and return them. This demand kicks the stock higher, and a short who acts too late could be ruined.

Usually, these kinds of standoffs involve sophisticated Wall Street investors, for example when Bill Ackman squared off against two other billionaires — Daniel Loeb and Carl Icahn — over the dietary supplement maker Herbalife.

Why did GameStop’s stock start rising?

The amateurs started driving up the price.

Over the past year, armchair traders have surged into the market. Some smelled opportunity after stocks tumbled last spring, some were trying to scratch a gambling itch after sports leagues shut down, and for some it’s just a game — trying to ring up dollars instead of points. All this has been made easier by the free trades available through platforms like Robinhood and E-Trade.

Some of these enthusiastic amateurs are buying shares of GameStop, but many are placing their own options bets, on the opposite side of the shorts.

These bets involve contracts that give them the option to buy a stock at a certain price in the future. If the price rises, the trader can buy the stock at a bargain and sell it for a profit. (In practice, lots of traders just sell the options contract itself for a profit or loss instead of actually buying the shares, but this description suffices for our purposes.)

The brokers that sell the options contracts have to provide the shares if the trader wants to exercise the option. To mitigate their risk, they buy some of the shares they’d need. Normally, this small amount of demand doesn’t do much to the price.

But if enough traders bet big, the demand can push the stock up. If it goes high enough, the brokers who would be on the hook have to buy more shares, lest they get stuck having to buy a lot of expensive shares all at once.

That increases demand, which increases the stock’s price. Which means the brokers have to buy more shares, which means… You get the idea.

Okay, but why GameStop?

You can put some of the blame on Reddit’s Wall Street Bets forum, one of the weirder places on the internet. Wall Street Bets, or WSB, is where armchair traders gather to share memes, commiserate over losses and share more memes. But they also trade tips and analysis that can go on for pages.

GameStop’s shares started to rise late last year, after the founder of the pet-supply site Chewy bought a stake in the company and got a spot on its board. Slowly, the company gained the attention of WSB and traders who frequent the gamer-friendly social media service Discord.

The traders’ motivations vary widely. Some reason that GameStop’s shares are a good value. Others are just riding the wave. And others want to squeeze Melvin Capital, a hedge fund that was shorting GameStop. They’re the ones quoting Heath Ledger’s Joker character from The Dark Knight: “It’s not about the money, it’s about sending a message.”

But the aggressive manoeuvres against the shorts aren’t necessarily limited to the amateurs. Wall Street’s big players know a good opportunity when they see it.

How does the GameStop squeeze end?

Nobody knows.

A spokesperson for Melvin Capital — which needed a $2.75 billion cash injection Monday because of the squeeze — said the firm had closed out of its short position. Andrew Left of Citron Research, another short, said he had covered the majority of his short position “at a loss, 100 percent.”

There’s a catch: GameStop, as a company, is not noticeably different from a month ago. By any conventional measure, its share price wildly inflated — and extremely risky for whoever owns its shares.

But this isn’t just about GameStop anymore. Enthusiastic amateurs are also bidding up the prices of other struggling stocks, like movie theater chain AMC and smartphone maker BlackBerry.

This weird little bubble doesn’t just affect the bettors, though. If big investors on the losing side of these trades have to raise money to cover their losses, it could mean dumping enough shares to hurt the prices of otherwise solid stocks.

If the sell-off is big enough, it could have a cascading effect that leads to broader losses for investors who have never bought or sold a share of GameStop.

Matt Phillips c.2021 The New York Times Company

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Economic Survey to be presented in Parliament today; all you need to about FinMin's flagship report on economy

The Economic Survey 2021 will be tabled on 29 January, a couple of days prior to the Union Budget, which will be tabled on 1 February.

President Ram Nath Kovind will address the joint sitting of both Houses on the same day.

Prepared by the Economic Division of the Department of Economic Affairs (DEA) under the guidance of the CEA, the Economic Survey is a detailed report on the state of the economy in the past one year. It lists key challenges expected and the way out from them.

The Economic Survey gets approved by the finance minister after the document is prepared. The first Economic Survey was presented in 1960-51 and until 1964, it was released at the time of the Budget.

While the Economic Survey is a crucial document that provides an extensive official version of the government's take on the economic condition of the country, in reality, the government is not constitutionally bound to present the Economic Survey or to follow the recommendations made in it.

The document also analyses trends in money supply, infrastructure, agricultural and industrial production along with employment, prices, exports, imports, foreign exchange reserves and other important factors that may impact the Budget.

Apart from this, economic magnitudes are grouped, such as how much is set aside for capital formation etc. This helps in better appreciation of the impact of government receipts and expenditure on the other sectors of the economy.

The Economic Survey 2021 is of particular significance as it during the COVID-19 pandemic. As per the First Advance estimates of the government, the economy may contract by 7.7 percent. The survey is likely to outline plans to put the economy back on track to achieve the $5 trillion goal that was set in 2019.

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A year of living and working in the shadow of Covid-19 pandemic

For many businesses, the need to have people coming into office has shrunk. For many others, however, it remains integral to their operations

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DoT, Dipam lock horns over real estate asset valuation of BSNL-MTNL

It is learnt that the valuation done by the two companies is much higher than the one arrived at by the transaction advisors

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PSU privatisation: Govt to amend security clearance policy for investors

The changes are being proposed to obviate situations when a highest bidder fails the security clearance in the case of investment from China or other bordering nations on grounds of national security

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After 'green tax' approval, govt may put vehicle scrap policy on hold

"The announcement of green tax is a step towards the scrappage policy," an official told Business Standard

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Companies can't hold capital assets created with CSR funds: Experts

If such capital expenditure was incurred as part of CSR in the past, the assets need to be transferred within six months.

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15th FC may recommend farm export incentives for states in Budget session

The final report is expected to be tabled in Parliament during the Budget session that begins on Friday.

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Covid-19 pandemic exposed India's justice delivery comorbidities

The pandemic highlighted the need for speedier introduction of technology into the justice system

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Planning to invest? Short-duration funds safer option for retail investors

Rising yields at shorter end of curve will benefit these funds as liquidity level tightens

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Homegrown players score high on TikTok's exit from Indian market

As of Thursday, top free apps on Google's Play Store in India were Moj, TakaTak, Snacky Takatak, Snapchat and Instagram.

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Explained: Why auto design from Indian carmakers lags global standards

The majority of the cars in India have not been very exciting, perhaps because they have been so value conscious, an expert said

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Improving outlook, lower promoter pledge positive for Emami stock

All round performance in Q3, attractive valuations add to the optimism, say analysts

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Hindustan Zinc plans to increase earnings through diversification

The company will have its cadmium metal unit up and running by the first quarter of FY22

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US concerned about human rights situation in Russia: Antony Blinken

Across the board, he said the US is reviewing all of these actions that are of deep concern to the US, whether it is the treatment of Navalny or apparent use of a chemical weapons to assassinate him

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US will join nuclear deal if Iran complies with provisions: Blinken

The Joint Comprehensive Plan of Action (JCPOA), popular as the Iranian nuclear deal, was one of the key foreign policy achievements of the Obama-Biden Administration

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Brazil to end military-led programme against Amazon fires, logging

Government data showed that just over 11,000 square kilometers of forest disappeared between July 2019 and August 2020, up 9.5% compared to the previous year and the most since 2008

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US stocks suffer worst one-day loss in 3 months due to overbought markets

US stocks suffered their worst one-day loss in three months on Wednesday, with the three major equity indexes tumbling more than 2 per cent each, amid fears the market had been overbought after a rally with few breaks since late October.The Dow Jones Industrial Average, the broadest gauge of the New York Stock Exchange, lost 634 points, or 2.1 per cent, to close the day 30,303. The last time the index lost more was on October 28, when it fell 3.5 per cent.The S & P 500, a barometer for the top 500 US stocks, settled down 2.6 per cent at 3,751.The technology-laden Nasdaq index, which counts on the performance of industry giants such as Facebook, Apple, Amazon, Netflix and Google, also tumbled 2.6 per cent to finish at 13,271."It's a jittery moment for markets at the start of the year, with investors craving constant reassurance that the rug won't be pulled out from beneath them," Craig Erlam, an analyst at New York-based equities broker OANDA. "The current COVID situation creating .

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Zalmay Khalilzad told to continue with Afghan peace talks: Blinken

Biden Administration has started the process of reviewing the peace deal with the Taliban, Secretary of State Tony Blinken told reporters at his maiden news conference

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Climate change to be centre of national security, foreign policy: Biden

Biden on Wednesday signed a series of executive orders and took steps to address this challenge, which he identified as one of the most pressing threats of the era

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Germany counts over 2.16 mn Covid-19 cases in one year, 1.7 mn vaccinated

As the world is struggling to contain the pandemic, vaccination is underway in some countries with the already-authorized coronavirus vaccines

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US is a long way from lifting Iran sanctions, says Antony Blinken

On the issue of Afghanistan peace process, he said Zalmay Khalilzad was offered to stay in his capacity of United States Special Representative for Afghanistan Reconciliation in the Biden admin

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Blinken says his judgment that China committed genocide has not changed

On the current US-China bilateral ties, he said, "It's not a secret that the relationship between the United States and China is arguably the most important relationship in the world going forward"

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Union Budget 2021: Boost manufacturing, mining to promote economic recovery, Atmanirbhar Bharat

With the Union Budget 2021-22 just around the corner, there is room for optimism. Going by market reports, green shoots may already be sprouting, indicating an economic turnaround is taking place. In fact, in its December ‘State of the Economy’ report, the Reserve Bank of India (RBI) has revealed that the nation is emerging from the economic slump much faster than anticipated.

Meanwhile, the Centre is aware that the Budget needs to provide a robust push to ensure that the turnaround momentum is sustained. Finance Minister Nirmala Sitharaman has already given strong indications that the upcoming Budget will surpass any other presented during the past century.

Leveraging opportunities

To ensure a complete recovery from the pandemic, the Centre should continue its efforts to boost domestic production for making Atmanirbhar Bharat a ground reality through the requisite incentives and policy measures. Sitharaman’s all-important Budget should focus on providing greater momentum to the recovery process.

To begin with, the government needs to increase its spending on infrastructure and other core sectors in driving a sustained growth momentum across India. The proper mix of progressive policies and select incentives are imperative to attract more Foreign Direct Investment (FDI) in mining, which can pave the way for adopting modern exploration technologies fostering sustainable practices.

In the meantime, just as in the case of coal, more metals and minerals must be opened for exploration. The government should also ensure that restrictions on the pricing and marketing of minerals are lifted across all states, including the e-auction regime in Karnataka for iron ore. Besides boosting exports, this will provide parity across states, giving the economy a fillip.

Opening up mining and incentives for the manufacturing sector will also benefit MSMEs. Contributing 30 percent to the Indian gross domestic product (GDP), the Micro Small and Medium Enterprises (MSMEs) have been described as the backbone of the country by Union Minister for Road Transport and Highways Nitin Gadkari. Furthermore, MSMEs have also created 110 million jobs.

Reforms in core sectors

Given these facts, mining and manufacturing must be supported for ensuring a sustained turnaround in the economy. No doubt, till date the Centre has initiated many measures in supporting industries allied with natural resources, which includes mining and oil. Nevertheless, the deep disruptions caused by the COVID-19 pandemic mean more policy reforms remain the need of the hour for fast-tracking economic recovery.

For example, policy reforms are essential to conduct speedier auctions and ensure environmental approvals are granted in a time-bound, transparent manner. Additionally, the mining industry should be branded along similar lines as that of manufacturing under the Atmanirbhar Bharat mission. Mining being a capital-intensive sector, vibrant branding backed by tax stability as well as predictability of returns will help in attracting domestic investments and FDI.

Moreover, taxes without any input credit must be avoided and retrospective tax issues, as well as disputes under the previous tax regime, need to be resolved on a war footing according to merit. Another important policy reform lies in lowering the tax rate to a flat 15 percent for investments in oil, mining and manufacturing. Such a measure will ascertain there are adequate investments, including FDI, both in mining as well as oil and gas exploration. This will augment domestic supplies while saving foreign exchange.

Presently, the nation imports almost 85 percent of its crude oil despite having 75 million-plus barrels of oil. This is the equivalent of in-place resources sufficient for meeting India’s needs for 25 to 30 years. Steps such as the lowering of cess from a steep 20 percent to around 6–8 percent on domestic crude oil, the timely extension of contracts, on the same terms, and a global fair price for crude would benefit all stakeholders while increasing investor confidence too.

Therefore, Union Budget 2021 should announce financial allocations and incentives for attracting greater national and global investments in mining and hydrocarbon exploration. MSMEs in ancillary sectors will also benefit from this, expanding GDP growth as around 60 million units in this segment contribute to 45 percent of India’s industrial production and 40 percent of the total exports.

The Budget must also announce an enabling policy framework focussing on production rather than revenue. In the days ahead, higher production will automatically generate greater revenues. Finally, one expects the Budget to rationalise the tax regime for mining, including crude oil. While offering the sector much-needed relief, it will also help in advancing a quicker economic bounce back.

The writer is Group CEO and Chief Safety Officer, Vedanta Ltd

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Union Budget 2021: Policies, regulations must be extended to farm-based EVs

Rural logistics is a critical link for the proper functioning of the agricultural supply chain. It serves the primary purpose of providing timely inputs to farms and delivery of agricultural output to consumption centres across the agri-food value chain. A robust and resilient functioning of rural logistics is important for India’s
food security and this was further realised during the COVID-19 crisis.

While there are multimodal transport systems, transportation of agricultural goods is primarily dependent on road transport facilities. However, it is characterised by high costs as both vehicle-operating costs and food quality maintenance costs across the supply chain should be considered. The dominance of small and marginal farmers in India makes these aspects even more critical.

The existing scenario can be improved rapidly by including disruptive low-cost innovations like passive cooling and electric mobility for improving the rural logistics scenario. These interventions can accelerate rural development while increasing farmers’ income and ensuring the availability of quality farm produce for direct consumption or processing in urban clusters as discussed below:

Electric vehicles (EVs): Eco-friendly EVs, coupled with an appropriate OPEX model, can mitigate several transportation challenges faced by farmers. The major challenges faced by farmers are:
• Expensive transit cost for small-sized lots from farm to market
• Limited access to vehicles for transportation of produce to markets during peak harvest seasons
• Limited scope of first and last-mile delivery to remote areas

Value proposition of EVs

• 50 percent cost savings in fuel as compared to internal combustion engines
• 20 percent cost savings in maintenance costs as compared to internal combustion engines
• Can operate in a hub-and-spoke model for transportation of produce to markets and retail selling
• Has the potential to enable cooperatives and farmer producer organisations (FPOs) to set up and manage first and last-mile operations with reduced carbon footprints at a much lower cost
• EVs can be charged at solar-based charging stations and installed within built advanced telematics for real-time tracking and management.

There have been rapid developments in policies, regulations and technologies related to India’s electric mobility ecosystem in recent years. The government prioritised promoting and manufacturing EVs on a mission-mode approach in 2011 which led to the launch of the National Mission for Electric Mobility (NMEM and subsequently the National Electric Mobility Mission Plan (NEMMP) 2020 in 2013, which envisaged the cumulative sale of EVs to reach 15–16 million units in India by 2020.

Further, the Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME) India scheme was launched in 2015 under the aegis of the NEMPP 2020 by the Department of Heavy Industries (DHI). The DHI supported the manufacturing of 2.78 lakh hybrid/EVs under the first phase of the FAME India scheme.

The scheme provided a significant thrust to the electric mobility sector in India, leading to national and state-level stakeholders taking actions that created a better environment for manufacturing and promoting hybrid/EVs in the country.

The policies currently focus on converting public transport such as commercial two-wheelers, cars and buses into EVs. In order to develop the agriculture sector, significant policies and regulations must be extended to farm-based EVs in national as well as local contexts.

It is encouraging to note that in recent years, EV innovation in India has been led by startups that have developed vehicles and charging/battery swapping ecosystems that cater to the unique needs of the Indian consumer. Hence, with the right push towards innovation, electric mobility and participation of large manufacturers can be prioritised for strengthening mainstream farm-based transport facilities and reducing overall costs and emissions.

Passive cooling technology can bring efficient cold chain infrastructure to the doorsteps of farmers and consumers. Most perishable produce like fruits and vegetables are highly wasted due to the lack of cold chain facilities from farms to consumption centres. The high cooling costs and limited access to cold chain infrastructure lead to extensive wastage across the value chain, especially for small and marginal farmers. Passive cooling technologies provide an efficient solution to this situation by drastically reducing the cost of cooling and thereby the cost of
logistics for reefer transport.

Passive cooling technologies are suited for multimodal transport and are equally suitable for small farmers who have smaller outputs, as well as large traders dealing in container volumes. Apart from reducing the cost of transport, the technologies provide other advantages for maintaining the quality of produce across the cold chain which can significantly enhance the realised profits for farmers.

These new and emerging technologies can make agriculture more profitable and sustainable for farmers. They also have the potential to generate employment in rural areas for local entrepreneurs and assist them in running the operating model by strengthening necessary infrastructure, equipment and network, and providing information and enabling services.

The author is Partner -Clean Energy and Kakra-leader, Food and Agriculture, PwC India

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