6 July 2020


Notifications & Circulars

Reserve Bank of India

02.07.2020

Banking

Credit flow to Micro, Small and Medium Enterprises Sector

MANU/RMIC/0102/2020

1. Please refer to circular RPCD.PLNFS.BC.No.63/06.02.31/2006-07 dated April 4, 2007 containing definition of Micro, Small and Medium Enterprises as per Section 7 (I) of the Micro Small and Medium Enterprises Development Act, 2006.

2. In this connection, we inform that Government of India (GoI), vide Gazette Notification S.O. 2119 (E) dated June 26, 2020, has notified new criteria for classifying the enterprises as Micro, Small and Medium enterprises. The new criteria will come into effect from July 1, 2020. The details are as under:

2.1 Classification of enterprises

An enterprise shall be classified as a Micro, Small or Medium enterprise on the basis of the following criteria, namely:

i. a micro enterprise, where the investment in plant and machinery or equipment does not exceed one crore rupees and turnover does not exceed five crore rupees;

ii. a small enterprise, where the investment in plant and machinery or equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees; and

iii. a medium enterprise, where the investment in plant and machinery or equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees

2.2 Composite criteria of investment and turnover for classification

i. A composite criterion of investment and turnover shall apply for classification of an enterprise as micro, small or medium.

ii. If an enterprise crosses the ceiling limits specified for its present category in either of the two criteria of investment or turnover, it will cease to exist in that category and be placed in the next higher category but no enterprise shall be placed in the lower category unless it goes below the ceiling limits specified for its present category in both the criteria of investment as well as turnover.

iii. All units with Goods and Services Tax Identification Number (GSTIN) listed against the same Permanent Account Number (PAN) shall be collectively treated as one enterprise and the turnover and investment figures for all of such entities shall be seen together and only the aggregate values will be considered for deciding the category as micro, small or medium enterprise.

2.3 Calculation of investment in plant and machinery or equipment

i. The calculation of investment in plant and machinery or equipment will be linked to the Income Tax Return (ITR) of the previous years filed under the Income Tax Act, 1961.

ii. In case of a new enterprise, where no prior ITR is available, the investment will be based on self-declaration of the promoter of the enterprise and such relaxation shall end after the 31st March of the financial year in which it files its first ITR.

iii. The expression ''plant and machinery or equipment'' of the enterprise, shall have the same meaning as assigned to the plant and machinery in the Income Tax Rules, 1962 framed under the Income Tax Act, 1961 and shall include all tangible assets (other than land and building, furniture and fittings).

iv. The purchase (invoice) value of a plant and machinery or equipment, whether purchased first hand or second hand, shall be taken into account excluding Goods and Services Tax (GST), on self-disclosure basis, if the enterprise is a new one without any ITR.

v. The cost of certain items specified in the Explanation I to sub-section (1) of section 7 of the Act shall be excluded from the calculation of the amount of investment in plant and machinery.

2.4 Calculation of turnover

i. Exports of goods or services or both, shall be excluded while calculating the turnover of any enterprise whether micro, small or medium, for the purposes of classification.

ii. Information as regards turnover and exports turnover for an enterprise shall be linked to the Income Tax Act or the Central Goods and Services Act (CGST Act) and the GSTIN.

iii. The turnover related figures of such enterprise which do not have PAN will be considered on self-declaration basis for a period up to 31st March, 2021 and thereafter, PAN and GSTIN shall be mandatory.

2.5 In case of an upward change in terms of investment in plant and machinery or equipment or turnover or both, and consequent re-classification, an enterprise will maintain its prevailing status till expiry of one year from the close of the year of registration. In case of reverse-graduation of an enterprise, whether as a result of re-classification or due to actual changes in investment in plant and machinery or equipment or turnover or both, and whether the enterprise is registered under the Act or not, the enterprise will continue in its present category till the closure of the financial year and it will be given the benefit of the changed status only with effect from 1st April of the financial year following the year in which such change took place. Other aspects relating to registration of enterprises, grievance redressal, etc. are mentioned in the Gazette Notification S.O. 2119 (E) dated June 26, 2020.

3. The above instructions supersedes our earlier guidelines dated April 4, 2007, except paragraph 6 relating to delayed payment to micro and small enterprises.

4. We advise you to initiate necessary action for reclassification of enterprises as per the new definition w.e.f July 1, 2020 and issue necessary instructions to your branches/controlling offices in this regard, at the earliest.

Tags : Credit flow Msme Classification

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Press Information Bureau

02.07.2020

Civil

NHAI to set up InvIT, forms committee to select best talent for its Investment Manager Board

MANU/PIBU/1934/2020

With an aim to facilitate investment in the highway sector, National Highway Authority of India (NHAI) is in the process of setting up an Infrastructure Investment Trust (InvIT). As part of the structure, a new company is being set up to act as the Investment Manager to the proposed InvIT.

As NHAI InvIT shall be the first InvIT to be sponsored by any government or semi government entity in the country, it is important to have a professional management structure for the investment manager.

In order to select the best talent from the market for appointment of two independent Directors and one Chairman for the Investment Manager Board, a search-cum-selection committee has been formed. Dr. Sukhbir Singh Sandhu, Chairman, NHAI is the Convenor of the Committee and other members include Shri Deepak Parekh, Chairman, Housing Development Finance Corporation; Shri Girish Chandra Chaturvedi, Chairman, ICICI Bank; and Shri Sanjay Mitra, Ex-Secretary, Ministry of Road Transport & Highways. The idea is to set up a competent entity of experts that can professionally run the Infrastructure Trust to mobilise resources from the market for monetizing completed highway projects of NHAI.

Tags : Investment Highway sector Committee

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Press Information Bureau

02.07.2020

Civil

Top leaders to take part in first high-level industry consultation for formulation of the STIP 2020

MANU/PIBU/1940/2020

A high-level Industry consultation roundtable for the formulation of the new Science, Technology & Innovation Policy STIP 2020 will be organised during 2 - 3 July 2020 over a virtual platform by the STIP 2020 Secretariat in partnership with Confederation of Indian Industry (CII) and Science Policy Forum. The STIP 2020 Secretariat has been established jointly by the Office of Pricipal Scientific Adviser (PSA) and Department of Science and Technology (DST) to coordinate and execute the entire STIP 2020 policy-making process.

The power-packed discussions chaired by Professor K Vijay Raghavan, Principal Scientific Adviser to the Government of India and Professor Ashutosh Sharma, Secretary, Department of Science and Technology, Government of India, will focus on inviting suggestions from Industry champions for the upcoming STIP 2020 that will pave the way towards a knowledge-based economy. Industry leaders would be requested to share their thoughts and suggestions integral to the new STI policy.

Top leaders from various industries like Forbes Marshall, Bharat Forge, Infosys, TVS, ReNew Power Limited, AVAADA Group, Cadila Pharmaceuticals, Thermax, Medanta, Tata Chemicals, ELICO Limited, Panacea Biotech Ltd, Tata Steel, Serum Institute of India, Mapmygenome, Myelin Foundry, Urban Clap, Jubilant Bhartia Group, Tech Mahindra, Blue Star Limited, PI Industries Limited, Cyient Limited, Hi-Tech Group, Snapdeal, Tejas Networks Ltd, Mahindra, Mastek Limited, TCS, Reliance, Sterlite Technologies Limited and DCM Shriram and more would be sharing their insights and expectation on the STIP 2020.

This is the first-ever high-level industry consultation for the formulation of a Science, Technology, and Innovation Policy, which by way of its decentralized, bottom-up, and inclusive design process, aims to re-strategize priorities, sectoral focus, and methods of research and technology development for larger socio-economic welfare.

The Science, Technology and Innovation Policy (STIP 2020) has been flagged off jointly by the (Office of PSA) and DST as India and the world reorient in the wake of the COVID-19 crisis. The new policy is expected to be released later this year, replacing the existing policy, which was formulated in 2013.

The STIP 2020 formulation process is organised into 4 highly interlinked tracks, which will reach out to around 15,000 stakeholders for consultation in the policy formulation. Track I involves an extensive public and expert consultation process through Science Policy Forum - a dedicated platform for soliciting inputs from larger public and expert pool during and after the policy drafting process.

Track II comprises experts-driven thematic consultations to feed evidence-informed recommendations into the policy drafting process. Twenty-one (21) focused thematic groups have been constituted for this purpose. Track III involves consultations with Ministries and States, while Track IV constitutes apex level multi-stakeholder consultation.

Tags : Consultation Formulation STIP

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Reserve Bank of India

01.07.2020

Banking

Special liquidity scheme for NBFCs/HFCs

MANU/RMIC/0101/2020

1. The Government of India has approved a scheme to improve the liquidity position of NBFCs/HFCs through a Special Purpose Vehicle (SPV) to avoid any potential systemic risks to the financial sector. To be eligible under the Scheme, the following conditions should be met:

a. NBFCs including Microfinance Institutions that are registered with the RBI under the Reserve Bank of India Act, 1934, excluding those registered as Core Investment Companies;

b. Housing Finance Companies that are registered under the National Housing Bank Act, 1987;

c. CRAR/CAR of NBFCs/HFCs should not be below the regulatory minimum, i.e., 15% and 12% respectively as on March 31, 2019;

d. The net non-performing assets should not be more than 6% as on March 31, 2019;

e. They should have made net profit in at least one of the last two preceding financial years (i.e. 2017-18 and 2018-19);

f. They should not have been reported under SMA-1 or SMA-2 category by any bank for their borrowings during last one year prior to August 01, 2018;

g. They should be rated investment grade by a SEBI registered rating agency;

h. They should comply with the requirement of the SPV for an appropriate level of collateral from the entity, which, however, would be optional and to be decided by the SPV.

2. As per the Government decision, SBICAP which is a subsidiary of the State Bank of India has set up a SPV (SLS Trust) to manage this operation. The SPV will purchase the short-term papers from eligible NBFCs/HFCs, who shall utilise the proceeds under this scheme solely for the purpose of extinguishing existing liabilities. The instruments will be CPs and NCDs with a residual maturity of not more than three months and rated as investment grade. The facility will not be available for any paper issued after September 30, 2020 and the SPV would cease to make fresh purchases after September 30, 2020 and would recover all dues by December 31, 2020; or as may be modified subsequently under the scheme.

Tags : Special liquidity Scheme NBFCs/HFCs

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Reserve Bank of India

01.07.2020

Banking

RBI Working Paper No. 07/2020: Impact of Leverage on Firms' Investment: Decoding the Indian Experience

MANU/RPRL/0104/2020

The Reserve Bank of India today placed on its website a Working Paper titled "Impact of Leverage on Firms' Investment: Decoding the Indian Experience" under the Reserve Bank of India Working Paper Series*. The paper is authored by Avdhesh Kumar Shukla & Tara Shankar Shaw.

The paper focuses on the relationship between firms' leverage and their investment behavior in India. The empirical results suggest that firm-level leverage could provide early signals about the movements in investment cycle. Furthermore, the paper finds that firm's leverage adversely affects its investment activity in a non-linear manner i.e., firm's leverage at lower level has a positive impact on its investment while at higher level it affects investment negatively. The paper concludes that the initiatives to clean up balance sheets of banks and deleveraging by non-financial corporates should help in revival of the investment cycle. The results are consistent with the agency cost of debt and trade-off theory of capital structure, where firms set target for leverage by balancing costs and benefits of debt.

Tags : Impact Leverage Firms' Investment

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Securities and Exchange Board of India

30.06.2020

Capital Market

Collection of stamp duty on issue, transfer and sale of units of AIFs

MANU/SIPM/0019/2020

1. Government vide Gazette notification S.O. 116(E) dated January 08, 2020 has notified the "Registrars to an Issue and/or Share Transfer Agents" (RTA) registered under the Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 as a "depository" for the limited purposes of acting as a "collecting agent" under the Indian Stamp Act, 1899 and the Rules made thereunder, only in case of instruments of transaction otherwise than through a recognised stock exchange or depository.

2. In this regard, you are directed to comply with the applicable provisions of the Indian Stamp Act, 1899 and the Rules made thereunder regarding collection of stamp duty on sale, transfer and issue of units of AIFs w.e.f. July 01, 2020.

3. RTA already appointed by AIFs shall collect the stamp duty on issue, transfer and sale of units of AIFs as stated in Para (1) and (2) above.

4. AIFs, where RTA have not been appointed so far, shall appoint RTA, at the earliest, but not later than July 15, 2020 to enable collection of applicable stamp duty on issue, transfer and sale of units of AIFs in compliance with the applicable provisions of the Indian Stamp Act, 1899 and the Rules made thereunder.

5. As the provisions of the amended Indian Stamp Act, 1899 and the Rules made thereunder are to be implemented and enforced w.e.f. July 01, 2020, till such time RTA are appointed, as an interim measure, AIFs shall keep the applicable stamp duty on issue, transfer and sale of units of AIFs in a designated bank account. AIFs shall transfer the said amount to RTA upon appointment for onward remittance to States/Union Territories as per the provisions of Indian Stamp Act, 1899 and the Rules made thereunder.

6. As regards transactions (issue, transfer and sale of units of AIFs in demat mode) through recognized Stock Exchange or Depository as defined under SCRA, 1956 and Depositories Act, 1996 respectively, the respective Stock Exchange/authorized Clearing Corporation or a Depository is already empowered to collect stamp duty as per the amended Indian Stamp Act, 1899 and the Rules made thereunder.

7. This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

8. The circular is available on SEBI website. under the categories "Legal framework-Circulars" and "Info for-Alternative Investment Funds".

Tags : Collection Stamp duty Sale AIFs

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Press Information Bureau

30.06.2020

Civil

PM chairs meeting to review planning and preparations for vaccination against Covid-19

MANU/PIBU/1898/2020

PM lists four guiding principles that will form the foundation of this national effort. Prime Minister Shri Narendra Modi today chaired a high-level meeting to review the planning and preparations for vaccination against Covid-19, as and when the vaccine is available.

Prime Minister noted that vaccination of India's vast and diverse population will need to factor in issues including those related to management of medical supply chains, prioritization of at-risk populations, coordination between different agencies involved in the process, as well as the role of private sector and civil society in this national endeavour.

Prime Minister enunciated four guiding principles that will form the foundation of this national effort: first, that vulnerable groups should be identified and prioritized for early vaccination, for example doctors, nurses, healthcare workers, non-medical frontline corona warriors, and vulnerable people among the general population; second, that vaccination of "anyone, anywhere" should take place, ie without imposition of any domicile related restrictions for getting the vaccine; third, that vaccination must be affordable and universal - no person should be left behind; and fourth, that the entire process from production to vaccination should be monitored and supported in real time with the use of technology.

PM directed officials to evaluate in a broad manner available technology options that can form the backbone of the national endeavor to vaccinate all in the most efficient and timely manner.

Prime Minister directed that detailed planning for such large scale vaccination should be undertaken immediately. The current status of vaccine development efforts were also reviewed at the meeting. Prime Minister highlighted India's commitment to play an enabling role in the vaccination efforts against Covid-19.

Tags : Meeting Vaccination Covid-19

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Ministry of Commerce and Industry

30.06.2020

Customs

Extension of validity of Recognition of Pre-shipment Inspection Agencies

MANU/DGFT/0106/2020

In exercise of powers conferred under paragraph 1.03 of the Foreign Trade Policy (2015-20) read with paragraph 2.04 of the Foreign Trade Policy, the Director General of Foreign Trade in relaxation of the provision as in Para 2.55 (d) of the Handbook of Procedure, 2015-20, notifies as under:-

The validity of recognition of the Pre-Shipment Inspection Agencies (PSIAs) included in Appendix 2G of the Appendices and Aayat Niryat Forms (A&ANF) of Foreign Trade Policy (2015-20), which are going to complete their original or extended tenure on or before 30.6.2020, is extended up to 30.9.2020.

Effect of this Public Notice: Validity of the recognition of Pre-Shipment Inspection Agencies (PSIAs) as listed in the Appendix 2G of A&ANF, whose validity expires on or before 30.6.2020, is extended up to 30.9.2020.

Tags : Extension Recognition Pre-shipment

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