ECONOMY | THE REVOLUTION

Union Government releases tax devolution of ₹1,73,030 crore to State Governments to accelerate capital spending and finance their development and welfare-related expenditures

The Union Government has released tax devolution of ₹1,73,030 crore to State Governments today, as against the devolution of ₹89,086 crore in December 2024.

A higher amount is being devolved this month to enable states to accelerate capital spending and finance their development and welfare-related expenditures.

State-wise breakup of amount released is given below in the table:

Auction for Sale (re-issue) of (i) ‘7.02% GS 2031’, (ii) ‘7.23% GS 2039’ and (iii) ‘7.09% GS 2054’

The Government of India (GoI) has announced the sale (re-issue) of (i) “7.02% Government Security 2031” for a notified amount of ₹10,000 crore (nominal) through price based auction using multiple price method, (ii) “7.23% Government Security 2039” for a notified amount of ₹13,000 crore (nominal) through price based auction using multiple price method and (iii) “7.09% Government Security 2054” for a notified amount of ₹10,000 crore (nominal) through price based auction using multiple price method. GoI will have the option to retain additional subscription up to ₹2,000 crore against each security mentioned above. The auctions will be conducted by the Reserve Bank of India, Mumbai Office, Fort, Mumbai on October 18, 2024 (Friday).

Up to 5% of the notified amount of the sale of the securities will be allotted to eligible individuals and institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities.

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on October 18, 2024. The non-competitive bids should be submitted between 10:30 a.m. and 11:00 a.m. and the competitive bids should be submitted between 10:30 a.m. and 11:30 a.m.

The result of the auctions will be announced on October 18, 2024 (Friday) and payment by successful bidders will be on October 21, 2024 (Monday).

The Securities will be eligible for “When Issued” trading in accordance with the guidelines on ‘When Issued transactions in Central Government Securities’ issued by the Reserve Bank of India vide circular No. RBI/2018-19/25 dated July 24, 2018 as amended from time to time.

Union Finance Minister Smt. Nirmala Sitharaman to leave tonight for an official visit to Mexico and USA from 17th to 26th October 2024

Union Finance Minister to attend Annual Meetings of the IMF-World Bank

FM will also take part in G20 Finance Ministers & Central Bank Governors meetings besides bilateral meetings with many countries and organisations

Smt. Sitharaman will engage in multilateral discussions on multiple fora and also showcase India’s attractiveness as an investment destination

During the official leg of her maiden visit to Mexico from 17th to 20th October 2024, the Union Finance Minister will lead an Indian delegation of officials from the Ministry of Finance, underscoring a positive trajectory of growing bilateral economic and trade relations between the two countries.

Beginning her visit in Guadalajara, Union Finance Minister Smt. Sitharaman will chair the Tech Leaders Roundtable that will bring together global technology leaders, including the major Indian IT giants present in Guadalajara. Later, Smt. Sitharaman will also visit the TCS headquarters in Guadalajara — a significant contributor to the Mexican IT ecosystem and known as the ‘Silicon Valley’ of Mexico with a significant presence of major global IT and tech companies.

Smt. Sitharaman will also hold a bilateral meeting with her counterpart H.E. Mr. Rogelio Ramirez de la O, Minister of Finance and Public Credit of Mexico. Besides, the Union Finance Minister will also hold discussions with several members of the Mexican Parliament to strengthen parliamentary cooperation and foster economic development.

In Mexico City, Smt. Sitharaman will deliver a keynote address at the India-Mexico Trade and Investment Summit with participation from key industry captains from both the countries. Separately, Smt. Sitharaman will also engage with leading business figures and industry representatives from Mexico. These meetings with leading business leaders and investors are aimed at highlighting India’s policy priorities, and deliberate on measures to facilitate foreign investment by showcasing India’s attractiveness as an investment destination.

In the last leg of her maiden visit to Mexico, the Union Finance Minister will participate in a community event, being hosted by the Indian diaspora.

During the official leg of her visit to the USA from 20th to 26th Oct. 2024, Smt. Sitharaman will participate in the Annual Meetings of the International Monetary Fund (IMF) and the World Bank, the 4th G20 Finance Ministers and Central Bank Governor (FMCBG) Meetings, besides the G20 Joint Meeting of FMCBGs, Environment Ministers, and Foreign Ministers; and G7 – Africa Ministerial Roundtable.

In the course of her two-city visit to New York City and Washington D.C., the Union Finance Minister will participate in the Pension Funds Roundtable at New York Stock Exchange; interact with students and faculty at the Wharton School, University of Pennsylvania, and also at the Columbia University; and the Global Sovereign Debt Roundtable (GSDR) and take part in discussions organised by the Coalition for Disaster Resilient Infrastructure (CDRI) and Centre for Strategic and International Studies (CSIS) respectively.

The Union Finance Minister will take part in bilateral meetings with several countries, including United Kingdom, Switzerland, and Germany, besides holding one-on-one meetings with heads of World Bank (WB), Asian Development Bank (ADB), European Bank for Reconstruction and Development (EBRD), and CEOs of banking and financial institutions.

In a high-level event, the Union Finance Minister will participate in a World Bank Group discussion ‘From Idea to Implementation: New Financial Solutions to Accelerate Development’.

The Union Finance Minister will also share her thoughts during a discussion on Bretton Woods Institutions (BWI) with other panelists, Mr. Lawrence H. Summers; Mr. Carlos Cuerpo, Minister of Economy, Trade and Business, Spain; and Ms. Rania Al-Mashat, Minister of Planning, Economic Development, and International Cooperation, Egypt. The event is organised by the Centre for Global Development (CGD).

Auction for Sale (re-issue) of (i) ‘7.02% GS 2027’, (ii) ‘7.23% GS 2039’ and (iii) ‘7.34% GS 2064’

The Government of India (GoI) has announced the sale (re-issue) of (i) “7.02% Government Security 2027” for a notified amount of ₹6,000 crore (nominal) through price based auction using multiple price method (ii) “7.23% Government Security 2039” for a notified amount of ₹12,000 crore (nominal) through price based auction using multiple price method and (iii) “7.34% Government Security 2064” for a notified amount of ₹11,000 crore (nominal) through price based auction using multiple price method. GoI will have the option to retain additional subscription up to ₹2,000 crore against each security mentioned above. The auctions will be conducted by the Reserve Bank of India, Mumbai Office, Fort, Mumbai on September 06, 2024 (Friday).

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on September 06, 2024. The non-competitive bids should be submitted between 10:30 a.m. and 11:00 a.m. and the competitive bids should be submitted between 10:30 a.m. and 11:30 a.m.

The result of the auctions will be announced on September 06, 2024 (Friday) and payment by successful bidders will be on September 09, 2024 (Monday).

Subsidy To Electric Vehicle Manufacturers Under Fame Scheme

Posted On: 26 JUL 2024 3:38PM by PIB Delhi

Under FAME-India Scheme phase-II, no incentive is given to Electric vehicle manufacturers. The incentive/concession is provided to consumers (buyers/end users) in the form of an upfront reduction in purchase price of hybrid and electric vehicles to enable wider adoption, which is reimbursed to the OEM (EV manufacturers) by Government of India.

under FAME-India Scheme phase-II, the demand incentive/subsidy is passed on to the persons purchasing vehicles from the OEM at the time of purchase of the vehicle in the form of an upfront reduction in purchase price of hybrid and electric vehicles. Category-wise subsidy reimbursed to OEMs towards the incentive claimed by them during last five years (01.04.2019 to 31.03.2024) is as under:

Sl. No. Segment Incentive Amount Paid (Rs. in crore)

1 e-2w 4,375.59

2 e-3w 845.61

3 e-4w 399.12

4 e-buses * 1,322.00

Total for above 6,942.32

* Subsidy amount released to State Transport Units

This information was given by the Minister of State, Steel and Heavy Industries Shri Bhupathiraju Srinivasa Varma in a written reply in the Rajya Sabha today.

Government extends duration of EMPS 2024 by two months i.e. upto 30th September, 2024 with enhancement of outlay to Rs. 778 crore

Posted On: 26 JUL 2024 8:07PM by PIB Delhi

The Electric Mobility Promotion Scheme 2024 (EMPS 2024), launched by Ministry of Heavy Industries, Government of India through gazette notification 1334 (E) dated March 13, 2024, aims to boost the adoption of electric vehicles (EVs) across the country. The EMPS scheme was originally set to run from April 1st , 2024, to July 31st , 2024, with a total outlay of Rs.500 crore. The scheme has been extended by two more months i.e. upto September 30th, 2024. Additionally, the scheme's outlay has been enhanced to Rs. 778 crore.

It aims to advance the Government of India's green initiatives and foster the growth of the electric vehicle (EV) manufacturing ecosystem in the country.

Eligible EV categories

a) Two Wheelers (electric) (e-2W)

b) Three-wheeler (electric) including registered e-rickshaws & e-carts and L5 (e-3W)

With greater emphasis on providing affordable and environment friendly public transportation options for the masses, scheme will be applicable mainly to those e-2W and e-3Ws registered for commercial purposes. Further, in addition to commercial use, privately or corporate owned registered e-2W will also be eligible under the scheme.

The component wise enhanced outlay of the scheme is as under:

Components

Description

Total Fund requirement for 6 months (INR in crore)

Subsidies/Demand Incentive

incentive for electric 2W (e-2W) and electric 3 W including registered e-rickshaws & e-carts and L5 (e-3W)

769.65

Administration of scheme

including IEC (Information, Education & Communication) activities and fee for Project Management Agency

8.35

Total

778.00

Revised Target numbers

The scheme now targets to support 560,789 electric vehicles (EVs), comprising 500,080 electric two-wheelers (e-2Ws) and 60,709 electric three-wheelers (e-3Ws). This includes 13,590 rickshaws and e-carts, as well as 47,119 e-3Ws in the L5 category. To promote advanced technologies, incentives will be available only for EVs equipped with advanced batteries. The scheme is fund limited and the EVs are also restricted to targeted numbers for each defined category as mentioned.

Aatma Nirbhar Bharat

The Scheme promotes an efficient, competitive and resilient EV manufacturing industry in the country thereby promoting the Prime Minister’s vision of Aatmanirbhar Bharat. For this purpose, Phased Manufacturing Programme (PMP) has been adopted which encourages domestic manufacturing and strengthening off EV supply chain. This shall also create significant employment opportunities along the value chain

Government undertakes various eﬀorts to promote and support startups

More than 1.4 lakh startups recognized by DPIIT as on 30th June 2024

The Government has undertaken various eﬀorts to promote and support startups in the country. The Government, with the objective of building a strong ecosystem for nurturing innovation, startups and encouraging investments in the startup ecosystem of the country, launched the Startup India initiative on 16th January 2016.

As per eligibility conditions prescribed under G.S.R. notification 127 (E) dated 19th February 2019, entities are recognized as ‘startups’ under the Startup India initiative by the Department for Promotion of Industry and Internal Trade (DPIIT). DPIIT has recognized 1,40,803 entities as startups as on 30thJune 2024. The State/Union Territory (UT)-wise details of number of DPIIT recognised startups are placed as Annexure-I.

The details of Government initiatives for promoting and supporting startups are placed as Annexure II.

ANNEXURE-I

The State/UT- wise number of DPIIT recognized startups areas under:

State/UT Number of DPIIT recognised startups

1.Andaman and Nicobar Islands 59

2.Andhra Pradesh 2,252

3.Arunachal Pradesh 38

4.Assam 1,318

5.Bihar 2,786

6.Chandigarh 489

7.Chhattisgarh 1,517

8.Dadra and Nagar Haveli and Daman

and Diu 53

9.Delhi 14,734

10.Goa 520

11.Gujarat 11,436

12.Haryana 7,385

13.Himachal Pradesh 484

14.Jammu and Kashmir 855

15.Jharkhand 1,305

16.Karnataka 15,019

17.Kerala 5,782

18.Ladakh 16

19.Lakshadweep 3

20.Madhya Pradesh 4,500

21.Maharashtra 25,044

22.Manipur 151

23.Meghalaya 52

24.Mizoram 32

25.Nagaland 66

26.Odisha 2,484

27.Puducherry 152

28.Punjab 1,539

29.Rajasthan 4,960

30.Sikkim 11

31.Tamil Nadu 9,238

32.Telangana 7,336

33.Tripura 123

34.Uttar Pradesh 13,299

35.Uttarakhand 1,138

36.West Bengal 4,627

GrandTotal 1,40,803

ANNEXURE-II

The details of various programs undertaken by the Government to promote startups across the country are as under:

Startup India Action Plan: An Action Plan for Startup India was unveiled on 16th January 2016. The Action Plan comprises of 19 action items spanning across areas such as “Simplification and handholding”, “Funding support and incentives” and “Industry-academia partnership and incubation”. The Action Plan laid the foundation of Government support, schemes and incentives envisaged to create a vibrant startup ecosystem in the country.
Startup India: The Way Ahead: Startup India: The Way Ahead at 5 years celebration of Startup India was unveiled on 16th January 2021 which includes actionable plans for promotion of ease of doing business for startups, greater role of technology in executing various reforms, building capacities of stakeholders and enabling a digital Aatmanirbhar Bharat.
Startup India Seed Fund Scheme (SISFS): Easy availability of capital is essential for entrepreneurs at the early stages of growth of an enterprise. The capital required at this stage often presents a make-or-break situation for startups with good business ideas. The Scheme aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization. Rs. 945 crore has been sanctioned under the SISFS Scheme for period of 4 years starting from 2021- 22.
Fund of Funds for Startups (FFS) Scheme: The Government has established FFS with corpus of Rs. 10,000 crore, to meet the funding needs of startups. DPIIT is the monitoring agency and Small Industries Development Bank of India (SIDBI) is the operating agency for FFS. The total corpus of Rs. 10,000 crore is envisaged to be provided over the 14th and15th Finance Commission cycles based on progress of the scheme and availability of funds. It has not only made capital available for startups at early stage, seed stage and growth stage but also played a catalytic role in terms of facilitating raising of domestic capital, reducing dependence on foreign capital and encouraging home grown and new venture capital funds.
Credit Guarantee Scheme for Startups (CGSS): The Government has established the Credit Guarantee Scheme for Startups for providing credit guarantees to loans extended to DPIIT recognized startups by Scheduled Commercial Banks, Non-Banking Financial Companies (NBFCs) and Venture Debt Funds (VDFs) under SEBI registered Alternative Investment Funds. CGSS is aimed at providing credit guarantee up to a specified limit against loans extended by Member Institutions (MIs) to finance eligible borrowers viz. DPIIT recognised startups.
Regulatory Reforms: Over 55 regulatory reforms have been undertaken by the Government since 2016 to enhance ease of doing business, ease of raising capital and reduce compliance burden for the startup ecosystem.
Ease of Procurement: To enable ease of procurement, Central Ministries/ Departments are directed to relax conditions of prior turnover and prior experience in public procurement for all DPIIT recognised startups subject to meeting quality and technical specifications. Further, Government e- Marketplace (GeM) also facilitates and promotes procurement of products and services by the Government from startups.
Self-Certification under Labour and Environmental laws: Startups are allowed to self-certify their compliance under 9Labour and 3 Environment laws for a period of 3 to 5 years from the date of incorporation.
Income Tax Exemption for 3 years: Startups incorporated on or after 1st April 2016 can apply for income tax exemption. The recognized startups that are granted an Inter-Ministerial Board Certificate are exempted from income- tax for a period of 3 consecutive years out of 10 years since incorporation.
Faster Exit for Startups: The Government has notified Startups as ‘fast track firms’ enabling them to wind up operations within 90 days vis-a-vis 180 days for other companies.
Exemption for the Purpose Of Clause (VII)(b) of Sub-section (2) of Section 56 of the Act (2019): A DPIIT recognized startup is eligible for exemption from the provisions of section 56(2)(viib) of the Income Tax Act.
Support for Intellectual Property Protection: Startups are eligible for fast- tracked patent application examination and disposal. The Government launched Start-ups Intellectual Property Protection (SIPP) which facilitates the startups to file applications for patents, designs and trademarks through registered facilitators in appropriate IP offices by paying only the statutory fees. Facilitators under this Scheme are responsible for providing general advisory on diﬀerent IPRs, and information on protecting and promoting IPRs in other countries. The Government bears the entire fees of the facilitators for any number of patents, trademark or designs, and startups only bear the cost of the statutory fees payable. Startups are provided with an 80% rebate in filing of patents and 50% rebate in filling of trademark vis-a-vis other companies.
Startup India Hub: The Government launched a Startup India Online Hub on 19th June 2017 which is one of its kind online platform for all stakeholders of the entrepreneurial ecosystem in India to discover, connect and engage with each other. The Online Hub hosts Startups, Investors, Funds, Mentors, Academic Institutions, Incubators, Accelerators, Corporates, Government Bodies and more.
International Market Access to Indian Startups: One of the key objectives under the Startup India initiative is to help connect Indian startup ecosystem to global startup ecosystems through various engagement models. This has been done though international Government to Government partnerships, participation in international forums and hosting of global events. Startup India has launched bridges with around 20 countries that provides a soft- landing platform for startups from the partner nations and aid in promoting cross collaboration.
Startup India Showcase: Startup India Showcase is an online discovery platform for the most promising startups of the country chosen through various programs for startups exhibited in a form of virtual profiles. The startups showcased on the platform have distinctly emerged as the best in their fields. These innovations span across various cutting-edge sectors such as Fintech, Enterprise Tech, Social Impact, Health Tech, EdTech, among others. These startups are solving critical problems and have shown exceptional innovation in their respective sectors. Ecosystem stakeholders have nurtured and supported these startups, thereby validating their presence on this platform.
National Startup Advisory Council: The Government in January 2020 notified constitution of the National Startup Advisory Council to advise the Government on measures needed to build a strong ecosystem for nurturing innovation and startups in the country to drive sustainable economic growth and generate large scale employment opportunities. Besides the ex-officio members, the council has a number of non-official members, representing various stakeholders from the startup ecosystem.
National Startup Awards (NSA): National Startup Awards is an initiative to recognize and reward outstanding startups and ecosystem enablers that are building innovative products or solutions and scalable enterprises, with high potential of employment generation or wealth creation, demonstrating measurable social impact. Handholding support is provided to all the finalists across various tracks viz. Investor Connect, Mentorship, Corporate Connect, Government Connect, International Market Access, Regulatory Support, Startup Champions on Doordarshan and Startup India Showcase, etc.
States’ Startup Ranking Framework (SRF): States’ Startup Ranking Framework is a unique initiative to harness strength of competitive federalism and create a flourishing startup ecosystem in the country. The major objectives of the ranking exercise are facilitating states to identify, learn and replace good practices, highlighting the policy intervention by states for promoting startup ecosystem and fostering competitiveness among states.
Startup Champions on Doordarshan: Startup Champions program on Doordarshan is a one-hour weekly program covering stories of award winning/ nationally recognised startups. It is telecasted in both Hindi and English across Doordarshan network channels.
Startup India Innovation Week: The Government organises Startup India Innovation week around the National Startup Day i.e., 16th January, with the primary goal was to bring together the country's key startups, entrepreneurs, investors, incubators, funding entities, banks, policymakers, and other national/internationalstakeholderstocelebrateentrepreneurshipandpromote innovation.
ASCEND: Under ASCEND (Accelerating Startup Caliber & Entrepreneurial Drive), sensitization workshops on startups and entrepreneurship were conducted for all eight North Eastern States with the objective to capacitate and augment knowledge on key aspects of entrepreneurship and continue efforts towards creating a robust startup ecosystem in these States.
The Startup India Investor Connect Portal has been co-developed under the Startup India Initiative with SIDBI,serving as an intermediary platform that links startups and investors in order to help entrepreneurs from various industries, functions, stages, regions, and backgrounds in mobilizing capital. The portal has been built with the aim to enable in particular; early-stage startups located anywhere in the country to showcase themselves to leading investors/ venture capital funds.
National Mentorship Portal (MAARG): In order to facilitate accessibility to mentorship for startups in every part of the country, the Mentorship, Advisory, Assistance, Resilience, and Growth (MAARG) program has been developed and launched under the Startup India Initiative.
MeitY Start-up Hub (MSH): A nodal entity to interconnect deep tech startup infrastructure pan India, the ‘MeitY Start-up Hub' (MSH) has been set up under Ministry of Electronics & Information Technology (MeitY). MSH is assisting incubators and startups improving their scalability, market outreach, etc. and has also established partnerships with various stakeholders paving the way for an economy built on innovation and technological advancement.
TIDE 2.0 Scheme: Technology Incubation and Development of Entrepreneurs (TIDE 2.0) Scheme was initiated in the year 2019 to promote tech entrepreneurship through financial and technical support to incubators engaged in supporting ICT startups using emerging technologies such as IoT, AI, Block-chain, Robotics etc. The Scheme is being implemented through incubators through a three-tiered structure with an overarching objective to promote incubation activities at institutes of higher learning and premier Research & Development (R&D) organisations.
Domain specific Centres of Excellence: MeitY has operationalised Centres of Excellence (CoEs) in diverse areas of national interest for driving self- sufficiency and creating capabilities to capture new and emerging technology areas. These domain specific CoEs act as enablers and aid in making India an innovation hub in emerging through democratisation of innovation and realisation of prototypes.

Biotechnology Industry Research Assistance Council (BIRAC): An Industry - academia interface agency of Department of Biotechnology, Ministry of Science & Technology is supporting biotech startups in all biotech sectors including clean energy and emerging technologies. Project based funding is provided to startups and companies for product/technology development under its key Schemes including Biotech Ignition Grant (BIG), Small Business Innovation Research Initiative (SBIRI) and Biotechnology Industry Partnership Programme (BIPP). Incubation support to the startups and companies is also provided through Bioincubators Nurturing Entrepreneurship for Scaling Technologies (BioNEST) Scheme.
SAMRIDH Scheme: MeitY has launched the ‘Start-up Accelerator Programme of MeitY for Product Innovation, Development and Growth (SAMRIDH)’ with an aim to support existing and upcoming Accelerators to further select and accelerate potential software product-based startups to scale.
Next Generation Incubation Scheme (NGIS): NGIS has been approved to support software product ecosystem and to address a significant portion of National Policy on Software Product (NPSP) 2019.
Support for International Patent Protection in E&IT (SIP-EIT) Scheme: MeitY had initiated a scheme titled “Support for International Patent Protection in E&IT (SIP-EIT) that encourages international patent filing by Indian Micro, Small and Medium Enterprises (MSMEs) and startups so as to encourage innovation and recognize the value and capabilities of global IP.
North-East Region Entrepreneurship & Startup Summit (NERES): Ministry of Skill Development and Entrepreneurship organised NERES, an entrepreneurship and startup summit aimed at oﬀering a platform to promising startups and aspiring entrepreneurs across North-East Region (NER). The objective of NERES was aimed at stirring up entrepreneurial minds across the NER states and promotes startup entrepreneurs by oﬀering them a platform to pitch their business ideas and also addressing various challenges faced by the startups. The programme provided a platform for aspiring and existing entrepreneurs/startups to participate and showcase their business ideas and plan. It also helped them to learn more about the good practices and network with fellow startups. The programme has paved the way for startups and entrepreneur to seek support from mentors and an ecosystem that support their business growth.
Atal Innovation Mission: The Atal Innovation Mission (AIM) is a flagship initiative of the Government, set up by NITI Aayog to promote innovation and entrepreneurship across the length and breadth of the country. AIM has established Atal Tinkering Labs (ATLs) with the objective of fostering curiosity, creativity and imagination in young minds and inculcate skills such as design mind-set, computational thinking, adaptive learning, physical computing, rapid calculations, measurements etc.
National Initiative for Developing and Harnessing Innovations (NIDHI): Department of Science and Technology (DST) had launched an umbrella programme called National Initiative for Developing and Harnessing Innovations (NIDHI) in 2016 for nurturing ideas and innovations (knowledge- based and technology-driven) into successful startups.
Innovations for Defence Excellence (iDEX): iDEX was launched by the Department of Defense Production, Ministry of Defense, to achieve self- reliance and foster innovation and technology development in Defense and Aerospace by engaging industries such as MSMEs and startups, R&D institutes and academia and providing grants to carry out R&D.

This information has been provided by the Union Minister of State for Commerce and Industry, Shri Jitin Prasada in a written reply in the Rajya Sabha.

STELLAR PERFORMACE OF INDIA’s BANKING AND FINANCIAL SECTOR AMIDST GLOBAL HEADWINDS

NON PERFORMING ASSETS OF BANKS AT MULTI-YEAR LOW

INDIA NOW RANKS 5TH GLOBALLY IN MARKET CAPITALIZATION TO GDP RATIO

PRIMARY MARKETS FACILITATED CAPITAL FORMATION OF ₹10.9 LAKH CRORE IN FY24 COMPARED TO ₹9.3 LAKH CRORE IN FY23

NUMBER OF IPOs INCREASED BY 66 PERCENT TO 272 IN FY24

INDIA’S NIFTY 50 INDEX INCREASED BY 26.8 PER CENT DURING FY24, AS AGAINST (-)8.2 PER CENT DURING FY23

INVESTOR BASE AT NSE NEARLY TRIPLES FROM MARCH 2020 TO MARCH 2024 TO 9.2 CRORE

GOVERNMENT FOCUSES ON FINANCIAL INCLUSION TO ENSURE SUSTAINABLE ECONOMIC GROWTH, REDUCTION IN INEQUALITY AND ELIMINATION OF POVERTY

INDIA POISED TO EMERGE AS ONE OF THE FASTEST-GROWING INSURANCE MARKETS IN THE COMING DECADE

INDIAN MICROFINANCE SECTOR EMERGES AS THE SECOND LARGEST AFTER CHINA

Indian economy's financial and banking sectors have shown strong performance despite continuous geopolitical challenges, said the Economic Survey 2023-24 tabled by Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman in the Parliament today. The survey notes that the Central Bank maintained a steady policy rate throughout the year, with the overall inflation rate under control. The effects of the monetary tightening following the Russia-Ukraine conflict are evident in the lending and deposit interest rates increase among banks. Bank loans saw significant and widespread growth across various sectors, with personal loans and services leading the way.

Monetary Policy

The Monetary Policy Committee (MPC) maintained the status quo on the policy repo rate at 6.5 per cent in FY24. During the current tightening cycle, i.e., from May 2022 to May 2024, the external benchmark-based lending rate and the one-year median marginal-cost-of-funds based lending rate increased by 250 bps and 175 bps, respectively.

Important factors impacting the evolution of monetary and credit conditions during FY24 were the withdrawal of ₹2,000 banknotes (May 2023), the merger of HDFC, a non-bank, with HDFC Bank (July 2023), and the temporary imposition of the incremental CRR (I-CRR) (August 2023).

The growth in Broad Money (M3), excluding the impact of the merger of HDFC with HDFC Bank (with effect from 1 July 2023), was 11.2 per cent (YoY) as of 22 March 2024, compared to 9 per cent a year ago.

During FY24, 17 fortnightly Variable Rate Reverse Repo (VRRR) auctions and seven Variable Rate Repo (VRR) auctions were undertaken as the primary operation. In addition, 49 fine-tuning operations (25 VRRR and 24 VRR) were conducted intermittently, modulating liquidity conditions in alignment with the monetary policy stance, the survey notes.

Bank Credit

Credit growth remains robust, mainly driven by lending to services and personal loans.

Lending by non-banking financial companies (NBFCs) accelerated, led by personal loans and loans to the industry, and their asset quality improved. Credit disbursal by SCBs stood at ₹164.3 lakh crore, growing by 20.2 per cent at the end of March 2024, compared to 15 per cent growth at the end of March 2023.

Agricultural credit increased nearly 1.5 times from ₹13.3 lakh crore in FY21 to ₹20.7 lakh crore in FY24. The Kisan Credit Card (KCC) scheme played a pivotal role in providing timely and hassle-free credit to farmers, with over 7.4 crore operative KCC accounts at the end of 2023.

Industrial credit growth picked up in H2 of FY24, registering 8.5 per cent growth in March 2024, compared to 5.2 per cent a year ago, driven by an increase in bank credit to small and large industries.

Improving credit flow to the MSME sector at low cost has been a policy priority of the Government and RBI. Bank credit disbursal to the services sector remained resilient despite a slowdown in credit growth to NBFCs Credit disbursal for housing loans increased from ₹19.9 lakh crore in March 2023 to ₹27.2 lakh crore in March 2024.

Banking Sector

There has been a significant enhancement in the asset quality of banks, led by improved borrower selection, more effective debt recovery and heightened debt awareness among large borrowers. In addition to regulatory capital and liquidity requirements, qualitative metrics such as enhanced disclosures, robust code of conduct, and transparent governance structures also improved banking performance.

The gross non-performing assets (GNPA) ratio of SCBs continued its downward trend, reaching a 12-year low of 2.8 per cent at the end of March 2024 from its peak of 11.2 per cent in FY18.

The macro-and micro-prudential measures by RBI and the Government have enhanced risk absorption capacity in recent years, improving the banking system's stability. For the top 10 Indian banks in asset size, loans constitute more than 50 per cent of their total assets, making banks immune to the rising interest rate cycle.

In the eight years since 2016, 31,394 corporate debtors involving a value of ₹13.9 lakh crore have been disposed of (including pre-admission case disposals) as of March 2024. ₹10.2 lakh crore of underlying defaults were addressed at the pre-admission stage.

The Government has taken several measures to improve the insolvency ecosystem. It has strengthened the NCLT regarding infrastructure, increasing its strength by filling vacancies and proposing an integrated IT platform. The regulations have been amended to keep in line with the needs of the markets and the advances in judicial pronouncements, the survey notes.

Strong Primary Markets

The Survey highlights the remarkable expansion of Indian capital markets. Capital markets have shown impressive results, with India's stock market capitalisation to GDP ratio ranking fifth globally.

Primary markets remained robust during FY24, facilitating capital formation of ₹10.9 lakh crore (which approximates 29 per cent of the gross fixed capital formation of private and public corporates during FY23), compared to ₹9.3 lakh crore in FY23. Fund mobilisation through all three modes, viz., equity, debt, and hybrid, increased by 24.9 per cent, 12.1 per cent and 513.6 per cent, respectively, in FY24 compared to the previous year.

The number of initial public offers (IPOs) increased by 66 per cent in FY24 from 164 in FY23 to 272 in FY24, while the amount raised grew by 24 per cent (from ₹54,773 crore in FY23 to ₹67,995 crore in FY24). The corporate debt market in India is going from strength to strength. During FY24, the value of corporate bond issuances increased to ₹8.6 lakh crore from ₹7.6 lakh crore during the previous financial year. The number of corporate bonds public issues in FY24 was the highest for any financial year so far, with the amount raised (₹19,167 crore) at a four-year high. Increasing investor demand and the rise in the cost of borrowing from banks have made these markets more attractive for corporates for funding requirements.

Robust Secondary Markets

Indian stock market was among the best-performing markets, with India’s Nifty 50 index ascending by 26.8 per cent during FY24, as against (-)8.2 per cent during FY23. The Survey says that the exemplary performance of the Indian stock market compared to the world can be primarily attributed to India’s resilience to global geo-political and economic shocks, its solid and stable domestic macroeconomic outlook, and the strength of the domestic investor base.

The Indian capital markets have seen a surge in retail activity in the last few years. The registered investor base at NSE has nearly tripled from March 2020 to March 2024 to 9.2 crore as of 31 March 2024, potentially translating into 20 per cent of the Indian households now channelling their household savings into financial markets. The number of demat accounts rose from 11.45 crore in FY23 to 15.14 crore in FY24.

FY24 has been a spectacular year for Mutual Funds as their Assets under Management (AuM) increased by ₹14 lakh crore (YoY growth of 35 per cent) to ₹53.4 lakh crore at the end of FY24, boosted by mark-to-market (MTM) gains and expansion of the industry.

Economic Survey notes that the significant increase in retail investors in the stock market calls for careful consideration as there is the possibility of overconfidence leading to speculation. It says that the firms operating in banking and capital markets must keep the interests of the consumers in mind through fair selling, disclosure, transparency, reliability, and responsiveness.

Progress of financial inclusion

The Survey highlights that the Government has prioritised delivering financial services to the last mile. The number of adults with an account in a formal financial institution increased from 35 per cent in 2011 to 77 per cent in 2021. Not only there is a decline in the access gap between the rich and the poor but the gender divide in terms of financial inclusion has also narrowed.

Survey notes a shift in focus of the financial inclusion strategy in the country, from ‘every household’ to ‘every adult,’ with added emphasis on direct benefit transfer (DBT) flows, promoting digital payments using RuPay cards, UPI123 etc.

Highlighting the progress of financial inclusion so far in the country, the survey says that India is among the fastest-growing fintech markets in the World, hailing as the third-largest growing fintech economy. A key enabler of this financial inclusion drive has been the digitalisation of the financial system, which the survey terms “transformative”. ‘Digital financial inclusion (DFI)’ is the next big target of the government. The survey says that the COVID-19 pandemic gave further momentum to Digital financial inclusion (DFI) when the most vulnerable and excluded citizens were severely affected. Some flagship schemes such as the Digital India Mission, Make-in-India, Aadhaar, e-KYC, Aadhaar-enabled Payment System, UPI, Bharat QR, DigiLocker, e-sign, Account Aggregator, Open Network for Digital Commerce, etc came to the rescue.

The success of UPI has been enhanced by the expansion of smartphone usage in India, with more than 116.5 crore smartphone subscribers as of 31 March 2024. The value of transactions conducted on the UPI platform has increased multifold from ₹0.07 lakh crore in FY17 to ₹200 lakh crore in FY24.

Microfinance has been playing an essential role in meeting low-income households' credit needs by providing affordable doorstep services. Globally, the Indian microfinance sector is the second largest after China in terms of number of borrowing customers in India, which are about three times that of the next biggest market, i.e., Indonesia.

Insurance sector

The survey says that the insurance sector has seen a remarkable growth. India is poised to emerge as one of the fastest-growing insurance markets in the coming decade. Economic growth, an expanding middle class, innovation, and regulatory support have driven insurance market growth in India. Non-life premium growth moderated slightly from 9 per cent in FY22 to an estimated 7.7 per cent in as the market stabilised after the pandemic. Recently, Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) achieved a milestone of generating 34.2 crore Ayushman cards across India, with 49.3 per cent of them held by females.

Pension sector

Talking about the developments in the pension sector, the survey states that India's pension sector has expanded since the introduction of the National Pension Scheme (NPS) and, more recently, the Atal Pension Yojana (APY). The total number of subscribers stood at 735.6 lakh as of March 2024, registering a YoY growth of 18 per cent from 623.6 lakh as of March 2023. The total number of APY subscribers (including its earlier version, NPS Lite) increased from 501.2 lakh as of March 2023 to 588.4 lakh as of March 2024. APY subscribers account for around 80 per cent of the pension subscriber base. APY subscribers have witnessed an improvement in gender mix, with female subscriber share rising from 37.2 per cent in FY17 to 48.5 per cent in FY23.

The survey also mentions the mechanisms to ensure regulatory coordination and overall financial stability, which should withstand unforeseen shocks so that there is a high degree of confidence. It recognizes the key role of Financial Sector Development Council (FSDC) to deal with a wide range of issues relating to financial stability and financial sector development.

NEARLY 78.5 LAKH JOB ANNUALY IN THE NON-FARM SECTOR

INDIAN ECONOMY NEEDS TO GENERATE NEARLY 78.5 LAKH JOBS ANNUALLY IN THE NON-FARM SECTOR UNTIL 2030 TO CATER TO THE RISING WORKFORCE

STEERING TECHNOLOGICAL CHOICES TOWARDS COLLECTIVE WELFARE IMPORTANT WITH ARTIFICIAL INTELLIGENCE TAKING ROOT IN VARIOUS SPHERES OF ECONOMIC ACTIVITIES

EFFECTIVE SOCIAL SECURITY MEASURES CREATED FOR GIG AND PLATFORM WORKERS WITH THEIR COVERAGE UNDER CODE ON SOCIAL SECURITY (2020)

INDIA’S CORPORATE SECTOR’S PROFITABILITY AT A 15-YEAR HIGH IN FY24 WITH PROFITS QUADRUPLING BETWEEN FY20 AND FY23

AGRO-PROCESSING AND CARE ECONOMY, TWO PROMISING SECTORS FOR GENERATING AND SUSTAINING QUALITY EMPLOYMENT

With the global labour market amidst a ‘disruption,’ and constantly being reshaped by the fourth industrial revolution, the Economic Survey 2023-24 tabled in Parliament by Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman, recognizes that India would also not remain immune to the transformation caused by it.

REQUIREMENT OF JOB CREATION UNTIL 2036

The Economic Survey 2023-24 notes that Indian economy needs to generate an average of nearly 78.5 lakh jobs annually until 2030 in the non-farm sector to cater to the rising workforce.

Annual requirement for non-farm job creation during 2024-2036

The Survey mentions that there is a scope to supplement the existing schemes of Production Linked Incentive (PLI) (60 lakh employment generation over 5 years), MITRA Textile scheme (20 lakh employment generation), MUDRA, etc., while boosting their implementation.

AI: THE BIGGEST DISRUPTOR

While attributing the biggest disruption in the future of work to the accelerated growth in AI, the Economic Survey 2023-24 says that India, with its vast demographic dividend and a very young population, is uniquely situated as AI poses both risk and opportunity. A particular risk is the BPO sector, where GenAI is revolutionising the performance of routine cognitive tasks through chatbots, and employment in the sector is estimated to decline considerably in the next ten years.

In the following decade, however, gradual diffusion of AI is expected to augment productivity.

But given the affinity of India’s population to work with technology, as seen with the digital public infrastructure, proactive interventions by the Government and industry can position India as a key player in the AI age, the Economic Survey notes.

MAKING THE MOST OF AI IN INDIA

Highlighting the need for research and development in this sector, the Economic Survey 2023-24 mentions a policy brief which suggests a need for an Inter-Agency Coordination Authority for AI which would act as a central institution guiding the research, decision-making, policy planning on AI and job creation.

The Government has launched several initiatives to ensure an AI enabled ecosystem and to connect AI to the youth of the country. Some of these include ‘Future Skills Prime’, ‘YUVAi: Youth for Unnati and Vikas with AI’ a national programme for school students and ‘Responsible

AI for Youth 2022’. A budget of ₹10,300 crore has been provided in 2024 for the India AI Mission, a significant move to strengthen the AI ecosystem.

A SHIFT TOWARDS GIG ECONOMY

According to NITI Aayog’s indicative estimates based on national labour force survey data, in 2020–21, 77 lakh (7.7 million) workers were engaged in the gig economy and as per the Economic Survey 2023-24, the gig workforce is expected to expand to 2.35 crore (23.5 million) and form 6.7 per cent per cent of the non-agricultural workforce or 4.1 per cent of the total livelihood in India by 2029–30.

The Survey mentions that the significant contribution in the Indian context and globally has been the creation of effective social security initiatives for gig and platform workers. The Code on Social Security (2020) marks a significant advancement by expanding the scope of social security benefits to encompass gig and platform workers.

CLIMATE CHANGE AND GREEN ENERGY TRANSITION

Recognizing the climate change as a hard reality of the present times and projections pointing towards an increase in the frequency and intensity of extreme weather events, the Survey mentions its concomitant outcome as the possible loss of jobs and productivity.

Another aspect of climate change is the efforts to mitigate its impact by adopting green technologies and transitioning to greener energy alternatives. This trend is leading to businesses witnessing a strong job-creation effect driven by investments that facilitate the green transition of businesses and the application of ESG standards.

INDIA’S CORPORATE SECTOR ON RISE

The Economic Survey says that India’s corporate sector’s profitability is at a 15-year high in FY24 with profits quadrupling between FY20 and FY23.

It mentions that businesses have an obligation to themselves to strike the right balance between deployment of capital and deployment of labour. In their fascination for AI and fear of erosion of competitiveness, businesses have to bear in mind their responsibility for employment generation and the consequent impact on social stability.

AGRO-PROCESSING AND CARE ECONOMY FOR QUALITY EMPLOYMENT

The Economic Survey 2023-24 says that India can utilise the range of products on offer by its different agro-climatic zones and productively engage the sizeable rural workforce, comprising women who seek remunerative part-time employment and educated youth who can be technically skilled to handle small to medium scale agro-processing units.

There remains ample scope for shifting MGNREGS labour to more productive and less fiscally straining ventures. Low value-addition in agriculture and rising demand for diverse and local food products also provides a good opportunity for India to create more jobs in this sector. There are also more avenues for captive demand of agro-processed output and the sector can benefit from the synergies between the multiple existing programmes such as Mega Food Park, Skill India, Mudra, one district-one product, etc., for labour, logistics, credit, and marketing.

The care economy holds great importance for a young country like India, which has both demographic and gender dividends to reap. Highlighting the need to prepare for future care requirements of an ageing population, the Economic Survey 2023-24 says that defining care work is the first step towards acknowledging care as ‘work’.

It mentions that India’s care needs are slated to expand significantly in the next 25 years, as an ageing population follows the ongoing demographic transition while the population of children stays relatively sizeable. By 2050, the share of children is estimated to decline to 18 per cent (i.e., 30 crore persons), while the proportion of elderly persons would rise to 20.8 per cent (i.e., 34.7 crore persons). Thus, compared to 50.7 crore persons in 2022, the country would need to care for 64.7 crore persons in 2050.

Recognising the disproportionate burden of care on women being consequential to the low Female Labour Force Participation Rate (FLFPR) across the world, including India, the Survey also lays emphasis on ensuring equal opportunity for females by decoupling gender and unpaid care work.

The economic value of developing a care sector is twofold – increasing FLFPR and promoting a promising sector for output and job creation. The Survey mentions that in case of India, direct public investment equivalent to 2 per cent of GDP has the potential to generate 11 million jobs, nearly 70 per cent of which will go to women.

Senior care reforms in India

The care responsibility associated with an increasingly older population necessitates formulating a future-ready wholesome elderly care policy with the Survey mentioning the care economy as a top-tier entry in India’s to-do list for becoming a developed nation by 2047. According to the Asian Development Bank report, utilising this ‘silver dividend’ of untapped work capacity of population aged 60-69 years is estimated to increase GDP by an average of 1.5 per cent for Asian economies.

C-DOT signs agreement with IIT, Roorkee and Mandi for “Development of ‘Cell-Free’ 6G Access Points”

It aims to enhance connectivity, signal strength and data speeds; to contribute 6G standardization, patents and commercialization

Project is in-line with ‘Bharat 6G vision’ that aims to establish India as global leader in 6G technology, driving innovation, connectivity and digital inclusion

Posted On: 24 JUL 2024

In a significant step towards developing Indigenous technology, the Centre for Development of Telematics (C-DOT), a premier Telecom R&D centre of the Department of Telecommunications (DoT), Government of India, signed an agreement with the Indian Institute of Technology Roorkee (IIT Roorkee) and Indian Institute of Technology, Mandi (IIT Mandi), for the development of ‘Cell-Free’ 6G Access Points. Both the IITs are collaborating to develop this technology.

The agreement is signed under the Telecom Technology Development Fund (TTDF) scheme of Department of Telecommunications, Government of India, which has been designed for providing funding support to domestic companies, Indian startups, academia and R&D institutions involved in technology design, development, commercialization of telecommunication products and solutions. This scheme aims to enable affordable broadband and mobile services, playing a significant role in bridging the digital divide across India.

Traditional mobile networks use cellular topologies in which each cell is serviced by a single base station like 4G/5G to service mobile customers. ‘Cell-Free’ Massive MIMO (multiple-input and multiple-output) eliminates the idea of cells and cell boundaries by deploying several access points (APs) across a vast region to serve many user devices at the same time. A large number of APs are dedicated to each user within their coverage area, meaning a single user may be supported by many Aps. This ensures ubiquitous connectivity to the users, eliminates dead zones, enhances signal strength, and significantly boosts data speeds, offering an exceptional user experience even in densely populated areas.

This 6G project will focus on developing APs for enabling the upcoming 6G radio access networks and also aims to contribute to the 6G standardization activity, drive commercialization, generate intellectual property rights (IPRs), and develop a skilled workforce to support the emerging 6G landscape.

Agreement signing ceremony between C-DOT and IIT Roorkee & IIT Mandi

The agreement was signed during a ceremony attended by CEO, C-DOT - Dr Rajkumar Upadhyay, principal investigator – Dr Abhay Kumar Sah from IIT Roorkee, co-investigator – Dr Adarsh Patel from IIT Mandi and Director C-DOT, Dr Pankaj Kumar Dalela.

At the event, Dr Sah and Dr Patel affirmed their dedication to advancing next-generation communication technologies, aligning with Bharat 6G Vision launched by Prime Minister Shri Narendra Modi. They expressed their gratitude to Department of Telecommunications (DoT) and C-DOT for the opportunity to collaborate on this research, emphasizing that it bolsters efforts to enhance cutting-edge research capabilities and infrastructure in the telecom sector.

Dr Rajkumar Upadhyay, CEO, C-DOT underscored the key role of indigenously designed & developed technologies in meeting the specific requirements of communication for our diverse country, reaffirming the commitment towards “Atmanirbhar Bharat”. He also said this will help us generating IPRs in 6G domain and emerging technologies in the area of 6G.

The C-DOT, IIT-Roorkee & IIT-Mandi representatives expressed their enthusiasm and commitment to this collaborative endeavour on developing and shaping the 6G vision of India.

ECONOMIC SURVEY OF INDIA

INDIA’S REAL GDP PROJECTED TO GROW BETWEEN 6.5–7 PER CENT IN 2024-25

SHOWING RESILIENCE, INDIA’S REAL GDP GREW BY 8.2 PERCENT IN FY 24, EXCEEDING 8 PERCENT MARK IN THREE OUT OF FOUR QUARTERS OF FY 24

SHARES OF AGRICULTURE, INDUSTRY AND SERVICES SECTORS IN OVERALL GVA AT CURRENT PRICES IN FY 24 WERE 17.7 PER CENT, 27.6 PER CENT AND 54.7 PER CENT RESPECTIVELY

MANUFACTURING SECTOR GROWS BY 9.9 PER CENT IN FY24; CONSTRUCTION ACTIVITIES ALSO REGISTER A GROWTH OF 9.9 PER CENT

RETAIL INFLATION DECLINES TO 5.4 PER CENT IN FY24 AFTER AVERAGING AT 6.7 PERCENT IN FY23

GROSS FIXED CAPITAL FORMATION (GFCF) FROM PRIVATE NON-FINANCIAL CORPORATION’S INCREASES BY 19.8 PER CENT IN FY23, ACTS AS AN IMPORTANT DRIVER OF GROWTH

WITH 4.1 LAKH RESIDENTIAL UNITS SOLD IN THE TOP EIGHT CITIES,IN 2023 REAL ESTATE WITNESSES 33 PER CENT Y-O-Y GROWTH, HIGHEST SINCE 2013

FISCAL DEFICIT OF UNION GOVERNMENT DOWN FROM 6.4 PER CENT OF GDP IN FY23 TO 5.6 PER CENT IN FY24

CAPITAL EXPENDITURE FOR FY24 STANDS AT ₹9.5 LAKH CRORE MARKING AN INCREASE OF 28.2 PER CENT ON Y-O-Y BASIS, AND 2.8 TIMES THE LEVEL OF FY20

QUALITY OF SPENDING BY STATE GOVERNMENTS IMPROVES AS GROSS FISCAL DEFICIT WAS 8.6 PER CENT LOWER THAN BUDGETED FIGURE OF ₹9.1 LAKH CRORE

GROSS NON-PERFORMING ASSETS (GNPA) RATIO DECLINES TO 2.8 PER CENT IN MARCH 2024, A 12-YEAR LOW MARKING IMPROVEMENT IN ASSET QUALITY OF BANKS

INDIA'S EXPORTS OF SERVICES REACHES A NEW HIGH OF USD 341.1 BILLION IN FY24

FOREX RESERVES AS OF END OF MARCH 2024 SUFFICIENT TO COVER 11 MONTHS OF PROJECTED IMPORTS

₹36.9 LAKH CRORE TRANSFERRED VIA DIRECT BENEFIT TRANSFER SINCE ITS INCEPTION IN 2013

FEMALE LABOUR FORCE PARTICIPATION RATE GROWS FROM 23.3 PER CENT IN 2017-18 TO 37 PER CENT IN 2022-23, MAINLY DUE TO RISING PARTICIPATION OF RURAL WOMEN