Kishore Biyani plans to merge HomeTown with FabFurnish

HomeTown may be spun off from Future Retail to create a new firm by combining it with FabFurnish.com

Mumbai: Kishore Biyani, group chief executive officer of retail conglomerate Future Group, may hive off the home retail business HomeTown from its flagship Future Retail Ltd and create a new home furnishing company by combining it with FabFurnish.com, which it acquired last month.

Future Group is the parent of listed companies such as Future Retail Ltd, Future Lifestyle Fashions Ltd and Future Consumer Enterprise Ltd.

The company has been operating the HomeTown retail chain for the last 10 years and creating a standalone home furnishings company is a move towards unlocking value, the company said.

“We are looking at creating value as we merge and create an independent identity for our home furnishing business,” Biyani told a press conference on Wednesday to announce the re-launch of fabfurnish.com on 5 May along with a campaign and discounts in the marketplace.

HomeTown is expected to become a Rs.1,000 crore business by the end of the current financial year which makes it the largest home furnishing company in the country, said Mahesh Shah, chief executive officer, HomeTown.

There are 42 HomeTown retail stores and the plan is to add eight more in this fiscal year, he added.

Globally, very few retailers sell everything from fashion to furniture and groceries, with most large companies specializing in a particular area of operations, said Abhishek Malhotra, leads the consumer industries and retail products practice for India at AT Kearney. “It makes sense to start creating separate specialist companies now that these businesses are gaining scale,” he said.

However, in India, not many home furnishing firms have gained success or scale. Reliance Industries Ltd’s retail arm Reliance Retail exited from its home furnishings retail business Reliance Living in 2014. Even hypermarket chain HyperCITY Retail India Ltd exited the furniture and electronics retail business two years ago.

Meanwhile, Swedish furniture and home furnishings maker Ikea’s first India store is expected to launch in 2017, which could further disrupt the sector.

Biyani, however, feels that by the time Ikea launches, HomeTown will be a sizeable business, with Rs.1,500 crore revenue and, hence, would not be impacted.

HomeTown will be a vendor on Fabfurnish.com, which will also sell home and furnishing products from other retailers.

Ashish Garg, co-founder, FabFurnish, said the company will turn profitable in the next three months, adding that it will be one of the first online retailers to achieve profitability in India as it looks to keep costs low and boost business.

Over the next three months Future Group will also launch its eZone app and online shopping portals for Big Bazaar, shoe brand Clarks and plus-sized women’s clothing brand All, said Vivek Biyani, director Future Group.

The group’s original listed entity Pantaloons Retail India Ltd and Future Venture India Ltd have over the years changed forms and names to become three listed entities spanning across groceries retail—Future Retail, Future Lifestyles (fashion) and Future Consumer Enterprise (an integrated packaged consumer goods company).

Currently, Future Retail is in the process of merging with Bharti Retail Ltd which will see the creation of two companies—one with the front-end retail operations and the second a back-end, infrastructure and investments company.

The home furnishings company, if created will be the fifth listed company of the group.

Sun Capital

China Rapid Finance Bolsters Governance by Adding Joe Zhang to Board

Acclaimed author and finance expert to serve as an independent non-executive director

SHANGHAI- China Rapid Finance Limited (“CRF” or the “Company”), a leading online consumer lending marketplace, bolstered its commitment to corporate governance, regulatory compliance and transparency with the addition of acclaimed author and financial expert Huaqiao (Joe) Zhang to its board.

“I have strong belief that with its innovative technology and multi data, multi channel strategy, as well as its rigorous risk management practices, China Rapid Finance has unparalleled advantage to thrive in this huge, untapped market.”

Mr. Zhang, 52, who is currently the chairman of Hong Kong-listed China Smartpay, has been appointed as an independent non-executive director on CRF’s board. Previously, he had served as an advisor to the Company since August 2013.

“The addition of Joe Zhang to our board will aid the Company in our aim to grow as a leading consumer lending marketplace that’s focused on strict risk management, transparency, and business innovation,” said Dr. Zane Wang, CEO of the Company.

“I have strong belief that with its innovative technology and multi data, multi channel strategy, as well as its rigorous risk management practices, China Rapid Finance has unparalleled advantage to thrive in this huge, untapped market." Mr. Zhang said. "I'm glad I can join China Rapid Finance to contribute my experience to its promising development in the future."

CRF aims at bringing affordable consumer credit to EMMAs, which are defined as Emerging Middle-class, Mobile Active consumers in China. There are 500 million such people, with quality employment, yet no credit record in the People’s Bank of China, which means they cannot get access to traditional credit service from banks.

Mr. Zhang brings to CRF’s board a wealth of industry knowledge and experience after having spent more than two decades in investment banking and finance. Prior to working at China Smartpay, Mr. Zhang served as the Chairman of Wansui Microcredit Company in Guangzhou from 2011-12. His work was recognized by The Microcredit Association of China, which named Mr. Zhang "Microcredit Person of the Year" in January 2012.

From 2006 to 2008, Mr. Zhang was the chief operating officer of Shenzhen Investment Limited. Earlier, he worked for various investment banks for 15 years, including 11 years with UBS as a banker and head of China Research. While at UBS in 2001, he became well known for publishing research that highlighted the weak governance and financial reporting issues of some companies listed on the Stock Exchange of Hong Kong. From 1986 to 1989, Mr. Zhang worked as a manager at the People's Bank of China.

Mr. Zhang is also the author of the bestseller Inside China's Shadow Banking: The Next Subprime Crisis, which was published in 2013. He has authored numerous articles that have appeared over the past two decades in publications including The New York Times, The Wall Street Journal, Financial Times, Bloomberg and South China Morning Post.

Mr. Zhang received a bachelor’s degree in Economics from Hubei Institute of Economics and Finance, a master’s degree in Economics from the PBOC Finance Institute and a master’s degree in Economics from the Australian National University.

About China Rapid Finance

China Rapid Finance Limited began its operations in 2001, and is the largest online consumer lending marketplace serving China’s emerging middle class in terms of total number of loans. The Company is a recognized innovator with a proprietary Big Data analytics technology platform. The Company has a proven track record in credit risk management and transparency, and has facilitated more than 5 million loans to-date.

India on course for recovery: IMF report

Pegs GDP growth at 7.5% for FY17; expects private investmentto pick up

New Delhi, March 2:  

In a thumbs-up to Finance Minister Arun Jaitley’s financial management, the International Monetary Fund has said that the Indian economy is on the path to recovery, helped by low crude oil prices, improving current account and fiscal deficits, as well as a sharp fall in inflation.

However, in its India: 2016 Article IV Consultation report, the IMF has pegged the country’s growth rate at 7.3 per cent this fiscal and 7.5 per cent for the next. This is marginally lower than Jaitley’s official estimate of 7.6 per cent GDP growth in 2015-16 and 7-7.75 per cent in 2016-17.

“The Indian economy is on a recovery path, helped by a large terms of trade gain (about 2.5 per cent of GDP), positive policy actions, and reduced external vulnerabilities,” said the report, which is based on the IMF’s consultations with officials from the Finance Ministry and the Reserve Bank of India.

With some uptick in industrial activity, the Washington-based international lender also expects a pick-up in private investment to help broaden the economic recovery.

The report has, however, warned that a number of economic risks remain. On the external front, it has highlighted a possible disruption from increased volatility in global markets, unexpected developments in US monetary policy and China’s slowdown.

On the domestic front, the IMF has listed the weakness in corporate financial positions and bad loans of banks, as well as the delay in reforms as risks that could weigh on growth, accelerate inflation and undermine sentiment.

“On the upside, further structural reforms could lead to stronger growth, as would a sustained period of low global energy prices,” it said.

The report also stressed the need for continued vigilance, growth-friendly fiscal consolidation, and sustained reforms to enhance the resilience of the economy and bolster potential growth.

Essential reforms

It said reform priorities include removing supply-side bottlenecks, especially in the agricultural and power sectors, and facilitating land acquisition. “Further reforms are also essential to boost employment in the formal sector, encourage female labour force participation, and enhance labour market flexibility more broadly,” said the IMF.

The report welcomed the adoption of flexible inflation targeting and the progress in enhancing monetary policy transmission, and said the RBI should be ready to tighten the monetary stance, if required, to control inflation.

Sun Capital Services

Tax to GDP ratio, redux

Suncapital: In a recent column in this newspaper (“India is an outlier in its tax policy”, 23 February), my IDFC Institute colleague, Praveen Chakravarty, and I peered into the Pandora’s box of public finance in India, arguing that India’s tax to gross domestic product ratio (GDP) is low by any relevant empirical benchmark. That particular trunk was prised open by French economist Thomas Piketty on a recent whirlwind tour of India. Readers will recall that it is he who has argued both that taxes are too low as a share of GDP, and that this contributes to a worsening inequality problem in India.

Now, the Economic Survey 2015-16 has a chapter devoted largely to tax to GDP ratio—for the first time so far as I am aware. Arvind Subramanian, chief economic adviser and architect of the survey, deserves enormous credit for turning what to many might have been an arcane technical issue into a live public policy debate.

The headline finding in chapter 7 of the survey is that, when controlling for GDP per capita, India is not, in fact, a negative outlier, as Chakravarty and I had claimed. Who is right?

Start with a simple statistical argument: an outlier is always relative to a given data set. So while, as we ourselves documented, the data clearly show that India’s tax to GDP ratio is low compared not just to the Organisation for Economic Co-operation and Development but also emerging economies—see table 1 in chapter 7—the report then goes on to argue that this vanishes when controlling for the level of per capita GDP, as presented in figure 2.

However, the report itself then establishes—see figure 3 and table 2—that when democracy is added as an additional control, India re-emerges as a negative outlier in total tax to GDP ratio, as also total government expenditure and especially health and education expenditure as shares of GDP.

Further, I would conjecture that, were an additional control added for resource-rich economies whose public finance is markedly different from other major economies, the survey’s finding would be enhanced further, and India would be even more of a negative outlier in its tax to GDP ratio. Preliminary results by Chakravarty reinforce this conjecture.

One other claim in the chapter needs to be probed further. In section 7.13, it is asserted: “India’s tax to GDP ratio has increased by about 10 percentage points over the past six decades from about 6% in 1950-51 to 16.6% in 2013-14.”

While this is true, it is incomplete and perhaps misleading. As Chakravarty and I documented, this increase occurred almost entirely in the first three decades, whereas the tax to GDP ratio has remained largely flat in the 16-17% range since 1991, the year that launched economic reforms. Further, our analysis demonstrated that there is, in statistical jargon, a structural break in 1991, as even eyeballing the data suggests.

This poses an enormous public policy puzzle, and indeed it contradicts the survey’s claim that tax to GDP ratio tends to rise with per capita income. For, in India’s case, tax to GDP ratio rose during a period when growth of GDP per capita was fitful and slow, whereas, when GDP per capita took off after 1991, tax to GDP ratio did not keep pace!

The bottom line of the empirical research is that, depending on how you slice and dice the data, you can find that India’s tax to GDP ratio is a negative outlier, as Chakravarty and I argue, or that it is not, as the Economic Survey argues. This invites the question, is there any theoretical basis to assert that tax to GDP ratio should rise with per capita income?

As it happens, the survey chapter does not provide a persuasive theoretical counterpart to its empirical findings. There is some suggestion that the state’s legitimacy and taxing capacity may rise with per capita GDP, thereby allowing tax to GDP ratio to increase. But this argument is not rigorously articulated. Nor does it allow for the possibility of reverse causation, such that a rising tax (and government spending) to GDP ratio allows GDP per capita to rise more rapidly, which could confound any causal claims based on the survey’s empirical results.

My own hunch is that, as a baseline, the tax to GDP ratio is likely to remain approximately constant as GDP per capita rises, at least for mature economies, however one defines these. (For the wonkish: this would follow if the income elasticity of government spending is approximately unity, and if government spending is financed, on average, only by current taxes, so that, on average, the government is running a balanced budget.) What this implies is that, once society has decided how much it wants to spend—which fixes the ratio of government spending to GDP—the tax to GDP ratio will be pinned down, and thereafter tax and government spending will rise roughly in proportion to GDP, so that the ratios will remain approximately constant.

In simpler language, in the long run, Indian governments will choose to tax more, if they wish to spend more. That appetite seems lacking at present. There’s the rub.

By Suncapital.co.in

Highlights of Union Budget 2016-17

Suncapital: Finance Minister Arun Jaitley unveiled a budget for the poor on Monday, announcing new rural aid schemes and skimping on a bank bailout, in a strategy shift that seeks to boost his ruling party in coming state elections.

Jaitley reiterated a forecast that India would grow by 7.6% in the fiscal year that is drawing to a close. He said the government wanted to spread the benefits of growth more widely among India's 1.3 billion people, but that he would stick to the government's existing fiscal deficit target for the coming year.

Here are the highlights of Jaitley's budget for the fiscal year that begins on April 1.

INTRODUCTION

1. Growth of Economy accelerated to 7.6% in 2015-16.
2. India hailed as a ‘bright spot’ amidst a slowing global economy by IMF.  Robust growth achieved despite very unfavourable global conditions and two consecutive years shortfall in monsoon by 13%
3. Foreign exchange reserves touched highest ever level of about 350 billion US dollars.  Despite increased devolution to States by 55% as a result of the 14th Finance Commission award, plan expenditure increased at RE stage in 2015-16 – in contrast to earlier years.

CHALLENGES IN 2016-17

1. Risks of further global slowdown and turbulence.
2. Additional fiscal burden due to 7th Central Pay Commission recommendations and OROP.

ROADMAP & PRIORITIES

1. 'Transform India' to have a significant impact on economy and lives of people.
2. Government to focus on –
a)ensuring macro-economic stability and prudent fiscal management.
b) boosting on domestic demand
c) continuing with the pace of economic reforms and policy initiatives to change the lives of our people for the better.
3. Focus on enhancing expenditure in priority areas of - farm and rural sector, social sector, infrastructure sector employment generation and recapitalisation of the banks.
4. Focus on Vulnerable sections through:
a) Pradhan Mantri Fasal Bima Yojana
b) New health insurance scheme to protect against hospitalisation expenditure
c) facility of cooking gas connection for BPL families
5. Continue with the ongoing reform programme and ensure passage of the Goods and Service Tax bill and Insolvency and Bankruptcy law
6. Undertake important reforms by:
a) giving a statutory backing to AADHAR platform to ensure benefits reach the deserving.
b) freeing the transport sector from constraints and restrictions
c) incentivising gas discovery and exploration by providing calibrated marketing freedom
d) enactment of a comprehensive law to deal with resolution of financial firms
e) provide legal framework for dispute resolution and re-negotiations in PPP projects and public utility contracts
f) undertake important banking sector reforms and public listing of general insurance companies undertake significant changes in FDI policy.

AGRICULTURE AND FARMERS’ WELFARE

1. Allocation for Agriculture and Farmers’ welfare is Rs 35,984 crore
2. ‘Pradhan Mantri Krishi Sinchai Yojana’ to be implemented in mission mode. 28.5 lakh hectares will be brought under irrigation.
3. Implementation of 89 irrigation projects under AIBP, which are languishing for a long time, will be fast tracked
4. A dedicated Long Term Irrigation Fund will be created in NABARD with an initial corpus of about ` 20,000 crore
5. Programme for sustainable management of ground water resources with an estimated cost of ` 6,000 crore will be implemented through 3 multilateral funding
6. 5 lakh farm ponds and dug wells in rain fed areas and 10 lakh compost pits for production of organic manure will be taken up under MGNREGA
7. Soil Health Card scheme will cover all 14 crore farm holdings by March 2017.
8. 2,000 model retail outlets of Fertilizer companies will be provided with soil and seed testing facilities during the next three years
9. Promote organic farming through ‘Parmparagat Krishi Vikas Yojana’ and 'Organic Value Chain Development in North East Region'.
10. Unified Agricultural Marketing ePlatform to provide a common e- market platform for wholesale markets
11. Allocation under Pradhan Mantri Gram Sadak Yojana increased to ` 19,000 crore. Will connect remaining 65,000 eligible habitations by 2019.
12. To reduce the burden of loan repayment on farmers, a provision of ` 15,000 crore has been made in the BE 2016-17 towards interest subvention
13. Allocation under Prime Minister Fasal Bima Yojana Rs 5,500 crore.
14. Rs 850 crore for four dairying projects - ‘Pashudhan Sanjivani’, ‘Nakul Swasthya Patra’, ‘E-Pashudhan Haat’ and National Genomic Centre for indigenous breeds

FISCAL DEFICIT

1. Fiscal deficit in RE 2015-16 and BE 2016-17 retained at 3.9% and 3.5%.
2. Revenue Deficit target from 2.8% to 2.5% in RE 2015-16
3. Total expenditure projected at ` 19.78 lakh crore
4. Plan expenditure pegged at ` 5.50 lakh crore under Plan, increase of 15.3%
5. Non-Plan expenditure kept at ` 14.28 lakh crores.
6. Special emphasis to sectors such as agriculture, irrigation, social sector including health, women and child development, welfare of Scheduled Castes and Scheduled Tribes, minorities, infrastructure.
7. Mobilisation of additional finances to the extent of ` 31,300 crore by NHAI, PFC, REC, IREDA, NABARD and Inland Water Authority by raising Bonds.
8. Plan / Non-Plan classification to be done away with from 2017-18. Every new scheme sanctioned will have a sunset date and outcome review.
9. Rationalised and restructured more than 1500 Central Plan Schemes into about 300 Central Sector and 30 Centrally Sponsored Schemes.
10. Committee to review the implementation of the FRBM Act.

SOCIAL SECTOR INCLUDING HEALTH CARE

1. Allocation for social sector including education and health care – Rs 1,51,581 crore.
2. Rs` 2,000 crore allocated for initial cost of providing LPG connections to BPL families.
3. New health protection scheme will provide health cover up to Rs One lakh per family. For senior citizens an additional top-up package up to Rs 30,000 will be provided.
4. 3,000 Stores under Prime Minister’s Jan Aushadhi Yojana will be opened during 2016-17.
5. ‘National Dialysis Services Programme’ to be started under National Health Mission through PPP mode
6. “Stand Up India Scheme” to facilitate at least two projects per bank branch. This will benefit at least 2.5 lakh entrepreneurs.
7. National Scheduled Caste and Scheduled Tribe Hub to be set up in partnership with industry associations
8. Allocation of ` 100 crore each for celebrating the Birth Centenary of Pandit Deen Dayal Upadhyay and the 350th Birth Anniversary of Guru 5 Gobind Singh.

EDUCATION, SKILLS AND JOB CREATION

1. 62 new Navodaya Vidyalayas will be opened
2. Sarva Shiksha Abhiyan to increasing focus on quality of education
3. Regulatory architecture to be provided to ten public and ten private institutions to emerge as world-class Teaching and Research Institutions
4. Higher Education Financing Agency to be set-up with initial capital base of Rs 1000 Crores
5. Digital Depository for School Leaving Certificates, College Degrees, Academic Awards and Mark sheets to be set-up.

RURAL ECONOMY

1. Allocation for rural sector - Rs 87,765 crore.
2. 2.87 lakh crore will be given as Grant in Aid to Gram Panchayats and Municipalities as per the recommendations of the 14th Finance Commission
3. Every block under drought and rural distress will be taken up as an intensive Block under the Deen Dayal Antyodaya Mission
4. A sum of Rs 38,500 crore allocated for MGNREGS.
5. 300 Rurban Clusters will be developed under the Shyama Prasad4 Mukherjee Rurban Mission
6. 100% village electrification by 1st May, 2018.
7. District Level Committees under Chairmanship of senior most Lok Sabha MP from the district for monitoring and implementation of designated Central Sector and Centrally Sponsored Schemes.
8. Priority allocation from Centrally Sponsored Schemes to be made to reward villages that have become free from open defecation.
9. A new Digital Literacy Mission Scheme for rural India to cover around 6 crore additional household within the next 3 years.
10. National Land Record Modernisation Programme has been revamped.
11. New scheme Rashtriya Gram Swaraj Abhiyan proposed with allocation of 655 crore.

BANKING REFORMS

* Government to infuse 250 billion rupees capital into state-run banks in 2016/17; will find resources for additional capital for banks if required

TAXATION

1. Committed to providing a stable and predictable taxation regime and reduce black money.
2. Domestic taxpayers can declare undisclosed income or such income represented in the form of any asset by paying tax at 30%, and surcharge at 7.5% and penalty at 7.5%, which is a total of 45% of the undisclosed income. Declarants will have immunity from prosecution.
3. Surcharge levied at 7.5% of undisclosed income will be called Krishi Kalyan surcharge to be used for agriculture and rural economy.
4. New Dispute Resolution Scheme to be introduced. No penalty in respect of cases with disputed tax up to `Rs10 lakh. Cases with disputed tax exceeding `Rs 10 lakh to be subjected to 25% of the minimum of the imposable penalty. Any pending appeal against a penalty order can also 14 be settled by paying 25% of the minimum of the imposable penalty and tax interest on quantum addition.
5. High Level Committee chaired by Revenue Secretary to oversee fresh cases where assessing officer applies the retrospective amendment.
6. One-time scheme of Dispute Resolution for ongoing cases under retrospective amendment.
7. Penalty rates to be 50% of tax in case of underreporting of income and 200% of tax where there is misreporting of facts.
8. Disallowance will be limited to 1% of the average monthly value of investments yielding exempt income, but not exceeding the actual expenditure claimed under rule 8D of Section 14A of Income Tax Act.
9. Time limit of one year for disposing petitions of the tax payers seeking waiver of interest and penalty.
10. Mandatory for the assessing officer to grant stay of demand once the assesse pays 15% of the disputed demand, while the appeal is pending before Commissioner of Income-tax (Appeals).
11. Monetary limit for deciding an appeal by a single member Bench of ITAT enhanced from Rs 15 lakhs to Rs 50 lakhs.
12. 11 new benches of Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

SKILL DEVELOPMENT

1. Allocation for skill development – Rs 1804. crore
2. 1500 Multi Skill Training Institutes to be set-up
3. National Board for Skill Development Certification to be setup in partnership with the industry and academia
4. Entrepreneurship Education and Training through Massive Open Online Courses

JOB CREATION

1. GoI will pay contribution of 8.33% for of all new employees enrolling in EPFO for the first three years of their employment. Budget provision of Rs 1000 crore for this scheme.
2. Deduction under Section 80JJAA of the Income Tax Act will be available to all assesses who are subject to statutory audit under the Act
3. 100 Model Career Centres to operational by the end of 2016-17 under National Career Service.
4. Model Shops and Establishments Bill to be circulated to States.

INFRASTRUCTURE AND INVESTMENT

1. Total investment in the road sector, including PMGSY allocation, would be Rs 97,000 crore during 2016-17.
2. India’s highest ever kilometres of new highways were awarded in 2015.
3. To approve nearly 10,000 kms of National Highways in 2016-17.
4. Allocation of ` 55,000 crore in the Budget for Roads. Additional Rs 15,000 crore to be raised by NHAI through bonds.
5. Total outlay for infrastructure - Rs 2,21,246 crore.
6. Amendments to be made in Motor Vehicles Act to open up the road transport sector in the passenger segment
7. Action plan for revival of unserved and underserved airports to be drawn up in partnership with State Governments.
8. To provide calibrated marketing freedom in order to incentivise gas production from deep-water, ultra deep-water and high pressure-high temperature areas
9. Comprehensive plan, spanning next 15 to 20 years, to augment the investment in nuclear power generation to be drawn up.
10. Steps to re-vitalise PPPs:  Public Utility (Resolution of Disputes) Bill will be introduced during 2016-17
11. Guidelines for renegotiation of PPP Concession Agreements will be issued
12. New credit rating system for infrastructure projects to be introduced
13. Reforms in FDI policy in the areas of Insurance and Pension, Asset
14. Reconstruction Companies, Stock Exchanges.
15. 100% FDI to be allowed through FIPB route in marketing of food products produced and manufactured in India.
16. A new policy for management of Government investment in Public Sector Enterprises, including disinvestment and strategic sale, 7 approved.

FINANCIAL SECTOR REFORMS

1. A comprehensive Code on Resolution of Financial Firms to be introduced.
2. Statutory basis for a Monetary Policy framework and a Monetary Policy Committee through the Finance Bill 2016.
3. A Financial Data Management Centre to be set up.
4. RBI to facilitate retail participation in Government securities.
5. New derivative products will be developed by SEBI in the Commodity Derivatives market.
6. Amendments in the SARFAESI Act 2002 to enable the sponsor of an ARC to hold up to 100% stake in the ARC and permit non institutional investors to invest in Securitization Receipts. 7. Comprehensive Central Legislation to be bought to deal with the menace of illicit deposit taking schemes.
8. Increasing members and benches of the Securities Appellate Tribunal.
9. Allocation of ` 25,000 crore towards recapitalisation of Public Sector Banks.
10. Target of amount sanctioned under Pradhan Mantri Mudra Yojana increased to Rs 1,80,000 crore.
11. General Insurance Companies owned by the Government to be listed in the stock exchanges.

GOVERNANCE AND EASE OF DOING BUSINESS

1. A Task Force has been constituted for rationalisation of human resources in various Ministries.
2. Comprehensive review and rationalisation of Autonomous Bodies.
3. Bill for Targeted Delivery of Financial and Other Subsidies, Benefits and Services by using the Aadhar framework to be introduced.
4. Introduce DBT on pilot basis for fertilizer.
5. Automation facilities will be provided in 3 lakh fair price shops by March 2017.
6. Amendments in Companies Act to improve enabling environment for start-ups.
7. Price Stabilisation Fund with a corpus of ` 900 crore to help maintain stable prices of Pulses.
8. “Ek Bharat Shreshtha Bharat” programme will be launched to link States and Districts in an annual programme that connects people through exchanges in areas of language, trade, culture, travel and tourism.

BOOST EMPLOYMENT AND GROWTH

1. Increase the turnover limit under Presumptive taxation scheme under section 44AD of the Income Tax Act to ` 2 crores to bring big relief to a large number of assessees in the MSME category.
2. Extend the presumptive taxation scheme with profit deemed to be 50%, to professionals with gross receipts up to Rs 50 lakh.
3. Phasing out deduction under Income Tax:  Accelerated depreciation wherever provided in IT Act will be limited to maximum 40% from 1.4.2017
4. Benefit of deductions for Research would be limited to 150% from 1.4.2017 and 100% from 1.4.2020
5. Benefit of section 10AA to new SEZ units will be available to those units which commence activity before 31.3.2020.
6. The weighted deduction under section 35CCD for skill development will continue up to 1.4.2020
7. Corporate Tax rate proposals:  New manufacturing companies incorporated on or after 1.3.2016 to be given an option to be taxed at 25% + surcharge and cess provided they do not claim profit linked or investment linked deductions and do not avail of investment allowance and accelerated depreciation.
8. Lower the corporate tax rate for the next financial year for relatively small enterprises i.e companies with turnover not exceeding ` 5 crore (in the financial year ending March 2015), to 29% plus surcharge and cess.
9. 100% deduction of profits for 3 out of 5 years for startups setup during April, 2016 to March, 2019. MAT will apply in such cases.
10. 10% rate of tax on income from worldwide exploitation of patents developed and registered in India by a resident.
11. Complete pass through of income-tax to securitization trusts including trusts of ARCs. Securitisation trusts required to deduct tax at source.
12. Period for getting benefit of long term capital gain regime in case of unlisted companies is proposed to be reduced from three to two years.
13. Non-banking financial companies shall be eligible for deduction to the extent of 5% of its income in respect of provision for bad and doubtful debts.
14. Determination of residency of foreign company on the basis of Place of Effective Management (POEM) is proposed to be deferred by one year.
15. Commitment to implement General Anti Avoidance Rules (GAAR) from 1.4.2017.
16. Exemption of service tax on services provided under Deen Dayal Upadhyay Grameen Kaushalya Yojana and services provided by Assessing Bodies empanelled by Ministry of Skill Development & Entrepreneurship.
17. Exemption of Service tax on general insurance services provided under ‘Niramaya’ Health Insurance Scheme launched by National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disability.
18. Basic custom and excise duty on refrigerated containers reduced to 5% and 6%.

MAKE IN INDIA

Changes in customs and excise duty rates on certain inputs to reduce costs and improve competitiveness of domestic industry in sectors like Information technology hardware, capital goods, defence production, textiles, mineral fuels & mineral oils, chemicals & petrochemicals, paper, paperboard & newsprint, Maintenance repair and overhauling [MRO] of aircrafts and ship repair.

Sun Capital Advisory Services