Tag: JSA Viewpoint

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Decriminalisation of offences under the LLP Act – Budget 2021

The proposal for the decriminalisation of offences under the LLP Act as contemplated for the Companies Act, 2013 is an important step, to protect stakeholders from unnecessary litigation, and will provide level playing field to the form of entity, given the broader benefits otherwise available to LLPs. One person company will now be permitted with relaxed conditions, and this will also motivate entrepreneurs to have a corporate structure with limited liability, and will also help start-ups and early-stage ventures.

JSA Viewpoint – Raj Ramachandran.

Tags Budget 2021, Companies Act, Corporate Structure, Decriminalisation, JSA Viewpoint, Limited Liability, Startup

Transformational infrastructure for healthcare – Budget 2021

The government has announced an amount of INR 35,000 crores for the vaccination programme in wake of Covid-19. However, the negotiations between Indian vaccine manufacturers had hinted at a ballpark figure of Rs 60,000-70,000 crores for only the procurement of vaccines during the first phase. Thus, the budgetary outlays falls short of the initial estimates. It is important to note that this estimate also excludes the costs for transformational infrastructure and storage at low temperatures, which have been estimated around $30-80 million.

Quote by Sidharrth Shankar.

Tags Budget 2021, Covid-19, Healthcare, Infrastructure, JSA Viewpoint, Manufacturing, Vaccines

JSA Viewpoint Healthcare – Budget, 2021

For FY 21 GoI had budgeted Rs. 69,000 crore for healthcare, which was 1.6% of GDP. The budgeted amount for FY 22 shows a significant increase. If this growth were to be extrapolated, the GoI should achieve the target of healthcare spend of 2.5 – 3% of GDP (as envisaged in the National Health Policy 2017) well before its target date. This is quite promising and clearly illustrates the importance that the GoI is placing on the sector spurred by the Covid pandemic. What is also very commendable is that the GoI has allocated Rs. 35,000 crore for the Covid vaccine as a separate line item. This shows that the GoI has avoided the pitfall of focussing all its resources on tackling communicable diseases at the cost of building healthcare systems generally because of the Covid pandemic, which notwithstanding its materially adverse impact on the health and economy, is an extraordinary event. The GoI has thus avoided the saliency bias which the Economic Survey had warned against.

Quote by Rohitashwa Prasad published in IIFL Securities, Pharmabiz and Global News Network of India.

Tags Budget 2021, Covid Pandemic, Healthcare, JSA Viewpoint

National Infrastructure Pipeline – Infrastructure Development, Budget 2021

The budget speech expectedly has given a strong signal for infrastructure development focusing on actualizing the ambitious national infrastructure pipeline targeting an investment of Rs.111 lakh crores over 5 years. The signal comes from the announced budgetary allocations and decisions (a) central allocation of Rs5.54 lakh crores, (b) state allocations of Rs.2 lakh crores, (c) announcement to tap into budgetary resources of PSUs and wide-ranging InvITs monetising assets in highways, power transmission, gas pipelines, dedicated freight corridors, airport.

The above announcements are strengthened by announcement of establishing Bad Bank in nature of AMC; a development financial institution with a seed investment of Rs.20,000 crores and a target to be build a lending portfolio of Rs. 5 lakh crores in 3 years; an extensive disinvestment program with target of Rs.1.75 lakh crores; zero coupon bonds that will help arrange the infra financing.

The devil lies in the details and the success in reviving the economy would depend on effective structural reforms in infrastructure sectors removing barriers to growth + how the government goes about monetising the land bank and assets held by PSUs.

Quote by Amit Kapur published in Business World, Deccan Herald, Firstpost, News Free Ads World and Mumbai Live.

Tags AMC, Budget 2021, Disputes, Energy, Infrastructure, Investments, JSA Viewpoint, National Infrastructure Pipeline, Power

Reducing compliances and uncertainty while providing some boost for investments

A step towards easing compliance and reducing uncertainty is that the time limit for reopening income tax assessments will be restricted to 3 years from the six years currently applicable. Only serious offences beyond a non-compliance threshold of 50 lakhs in a year will be subject to a 10-year window for reopening of assessment. Payment of advance tax to meet tax liability for dividend income can be after the declaration of dividend. Dividends to InVITs and REITs will be exempted from TDS. As an incentive for startups, tax holiday and capital gains exemption has been extended by one more year up to 31 March 2022.

Quote by Raj Ramachandran.

Tags Budget 2021, Finance, InvIT, JSA Viewpoint, REIT, Services, Startup, Tax

Securities market code to include SEBI Act – Government securities act and depositories act, Budget 2021

The consolidation of securities laws, existing decriminalisation of offences under the Companies Act and the proposed decriminalisation under the LLP Act marks an important move towards making Indian corporate legal framework, simpler, business friendly and ultimately (hopefully) reducing compliance costs. The securities market code is in line with previous discussions on the NFRA. It marks a step towards streamlining the multiple laws, ordinances, guidelines and regulations. If drafted and executed in a proper manner, it will be helpful to market participants and remove any possible conflicts in the regulatory framework and will provide clarity in policy making to investors and stakeholders.

Quote by Arka Mookerjee, published in CNBC, Moneycontrol, Indian Express, Fortune India, IIFL Group, Yahoo.com, Firstpost.