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Indian Union Budget 2022 Highlights

The key highlights of the Indian Union Budget 2022 are as follows:

Major Economic Announcements

  •  India’s economic growth estimated at 9.2% to be the highest among all large economies.
  • 60 lakh new jobs to be created under the productivity linked incentive scheme in 14 sectors.
  • PLI Schemes have the potential to create an additional production of Rs 30 lakh crore.
  • Entering Amrit Kaal, the 25 year long lead up to India @100, the budget provides impetus for growth along four priorities:
  • PM GatiShakti
  • Inclusive Development
  • Productivity Enhancement & Investment, Sunrise opportunities, Energy Transition, and Climate Action.
  • Financing of investments

PM GatiShakti

  • The seven engines that drive PM GatiShakti are Roads, Railways, Airports, Ports, Mass Transport, Waterways and Logistics Infrastructure.

PM GatiShakti National Master Plan

  • The scope of PM GatiShakti National Master Plan will encompass the seven engines for economic transformation, seamless multimodal connectivity and logistics efficiency.
  • The projects pertaining to these 7 engines in the National Infrastructure Pipeline will be aligned with PM GatiShakti framework.

Road Transport

  • National Highways Network to be expanded by 25,000 Km in 2022-23.
  • Rs 20,000 Crore to be mobilized for National Highways Network expansion.

Multimodal Logistics Parks

  • Contracts to be awarded through PPP mode in 2022-23 for implementation of Multimodal Logistics Parks at four locations.

Railways

  • One Station One Product concept to help local businesses & supply chains.
  • 2,000 Km of railway network to be brought under Kavach, the indigenous world class technology and capacity augmentation in 2022-23.
  • 400 new generation Vande Bharat Trains to be manufactured during the next three years.
  • 100 PM GatiShakti Cargo terminals for multimodal logistics to be developed during the next three years.

Parvatmala

  • National Ropeways Development Program, Parvatmala to be taken up on PPP mode.
  •  Contracts to be awarded in 2022-23 for 8 ropeway projects of 60 Km length.

Inclusive Development

Agriculture

  • Rs. 2.37 lakh crore direct payment to 1.63 crore farmers for procurement of wheat and paddy.
  • Chemical free Natural farming to be promoted throughout the county. Initial focus is on farmer’s lands in 5 Km wide corridors along river Ganga.
  • NABARD to facilitate fund with blended capital to finance startups for agriculture & rural enterprise.
  • ‘Kisan Drones’ for crop assessment, digitization of land records, spraying of insecticides and nutrients.

Ken Betwa project

  • 1,400 crore outlay for implementation of the Ken – Betwa link project.
  • 9.08 lakh hectares of farmers’ lands to receive irrigation benefits by Ken-Betwa link project.

MSME

  • Udyam, e-shram, NCS and ASEEM portals to be interlinked.
  • 130 lakh MSMEs provided additional credit under Emergency Credit Linked Guarantee Scheme (ECLGS)
  • ECLGS to be extended up to March 2023.
  • Guarantee cover under ECLGS to be expanded by Rs 50,000 Crore to total cover of Rs 5 Lakh Crore.
  • Rs 2 lakh Crore additional credit for Micro and Small Enterprises to be facilitated under the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE).
  • Raising and Accelerating MSME performance (RAMP) programme with outlay of Rs 6,000 Crore to be rolled out.

Skill Development

  • Digital Ecosystem for Skilling and Livelihood (DESH-Stack e-portal) will be launched to empower citizens to skill, reskill or upskill through on-line training.
  • Startups will be promoted to facilitate ‘Drone Shakti’ and for Drone-As-A-Service (DrAAS).

Education

  • ‘One class-One TV channel’ programme of PM eVIDYA to be expanded to 200 TV channels.
  • Virtual labs and skilling e-labs to be set up to promote critical thinking skills and simulated learning environment.
  • High-quality e-content will be developed for delivery through Digital Teachers.
  • Digital University for world-class quality universal education with personalised learning experience to be established.

Health

  • An open platform for National Digital Health Ecosystem to be rolled out.
  • ‘National Tele Mental Health Programme’ for quality mental health counselling and care services to be launched.
  • A network of 23 tele-mental health centres of excellence will be set up, with NIMHANS being the nodal centre and International Institute of Information Technology- Bangalore (IIITB) providing technology support.

Saksham Anganwadi

  • Integrated benefits to women and children through Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0.
  • Two lakh anganwadis to be upgraded to Saksham Anganwadis.

Har Ghar, Nal Se Jal

  • Rs. 60,000 crore allocated to cover 3.8 crore households in 2022-23 under Har Ghar, Nal se Jal.

Housing for All

  • Rs. 48,000 crore allocated for completion of 80 lakh houses in 2022-23 under PM Awas Yojana.

Prime Minister’s Development Initiative for North-East Region (PM-DevINE)

  • New scheme PM-DevINE launched to fund infrastructure and social development projects in the North-East.
  • An initial allocation of Rs. 1,500 crore made to enable livelihood activities for youth and women under the scheme.

Vibrant Villages Programme

  • Vibrant Villages Programme for development of Border villages with sparse population, limited connectivity and infrastructure on the northern border.

Banking

  • 100 per cent of 1.5 lakh post offices to come on the core banking system.
  • Scheduled Commercial Banks to set up 75 Digital Banking Units (DBUs) in 75 districts.

e-Passport

  • e-Passports with embedded chip and futuristic technology to be rolled out.

Urban Planning

  • Modernization of building byelaws, Town Planning Schemes (TPS), and Transit Oriented Development (TOD) will be implemented.
  • Battery swapping policy to be brought out for setting up charging stations at scale in urban areas.

Land Records Management

  • Unique Land Parcel Identification Number for IT-based management of land records.

Accelerated Corporate Exit

  • Centre for Processing Accelerated Corporate Exit (C-PACE) to be established for speedy winding-up of companies.

Direct Taxes

To take forward the policy of stable and predictable tax regime:

  • Vision to establish a trustworthy tax regime.
  • To further simplify tax system and reduce litigation.

Introducing new ‘Updated return’

  • Provision to file an Updated Return on payment of additional tax. 
  • Will enable the assessee to declare income missed out earlier.
  • Can be filed within two years from the end of the relevant assessment year.

Cooperative societies

  • Alternate Minimum Tax paid by cooperatives brought down from 18.5 per cent to 15 per cent.
  • To provide a level playing field between cooperative societies and companies.
  • Surcharge on cooperative societies reduced from 12 per cent to 7 per cent for those having total income of more than Rs 1 crore and up to Rs 10 crores.

Tax relief to persons with disability

  • Payment of annuity and lump sum amount from insurance scheme to be allowed to differently abled dependent during the lifetime of parents/guardians, i.e., on parents/ guardian attaining the age of 60 years.

Parity in National Pension Scheme Contribution

  • Tax deduction limit increased from 10 per cent to 14 per cent on employer’s contribution to the NPS account of State Government employees.
  • Brings them at par with central government employees. 
  • Would help in enhancing social security benefits.

Incentives for Start-ups

  • Period of incorporation extended by one year, up to 31st March, 2023 for eligible start-ups to avail tax benefit.
  • Previously the period of incorporation valid up to 31st March, 2022.

Incentives under concessional tax regime

  • Last date for commencement of manufacturing or production under section 115BAB extended by one year i.e. from 31st March, 2023 to 31st March, 2024.

Scheme for taxation of virtual digital assets

  • Specific tax regime for virtual digital assets introduced.
  • Any income from transfer of any virtual digital asset to be taxed at the rate of 30 per cent.
  • No deduction in respect of any expenditure or allowance to be allowed while computing such income except cost of acquisition.
  • Loss from transfer of virtual digital asset cannot be set off against any other income.
  • To capture the transaction details, TDS to be provided on payment made in relation to transfer of virtual digital asset at the rate of 1 per cent of such consideration above a monetary threshold.
  • Gift of virtual digital asset also to be taxed in the hands of the recipient.

Litigation Management

  • In cases where question of law is identical to the one pending in High Court or Supreme Court, the filing of appeal by the department shall be deferred till such question of law is decided by the court.
  • To greatly help in reducing repeated litigation between taxpayers and the department.

Tax incentives to IFSC

  • Subject to specified conditions, the following to be exempt from tax
  • Income of a non-resident from offshore derivative instruments.
  • Income from over-the-counter derivatives issued by an offshore banking unit.
  • Income from royalty and interest on account of lease of ship.
  • Income received from portfolio management services in IFSC.

Rationalization of Surcharge

  • Surcharge on AOPs (consortium formed to execute a contract) capped at 15 per cent.
  • Done to reduce the disparity in surcharge between individual companies and AOPs.
  • Surcharge on long term capital gains arising on transfer of any type of assets capped at 15 per cent.
  • To give a boost to the startup community.

Health and Education Cess

  • Any surcharge or cess on income and profits not allowable as business expenditure.

Deterrence against tax-evasion

  • No set off, of any loss to be allowed against undisclosed income detected during search and survey operations.

Rationalizing TDS Provisions

  • Benefits passed on to agents as business promotion strategy taxable in hands of agents.
  • Tax deduction provided to person giving benefits, if the aggregate value of such benefits exceeds Rs 20,000 during the financial year.

Indirect Taxes

Remarkable progress in GST

  • GST revenues are buoyant despite the pandemic – Taxpayers deserve applause for this growth.

Special Economic Zones

  • Customs Administration of SEZs to be fully IT driven and function on the Customs National Portal – shall be implemented by 30th September 2022.

Customs Reforms and duty rate changes

  • Faceless Customs has been fully established. During Covid-19 pandemic, Customs formations have done exceptional frontline work against all odds displaying agility and purpose.

Project imports and capital goods

  • Gradually phasing out of the concessional rates in capital goods and project imports; and applying a moderate tariff of 7.5 percent – conducive to the growth of domestic sector and ‘Make in India’.
  • Certain exemptions for advanced machineries that are not manufactured within the country shall continue.
  • A few exemptions introduced on inputs, like specialised castings, ball screw and linear motion guide – to encourage domestic manufacturing of capital goods.

Review of customs exemptions and tariff simplification

  • More than 350 exemption entries proposed to be gradually phased out, like exemption on certain agricultural produce, chemicals, fabrics, medical devices, & drugs and medicines for which sufficient domestic capacity exists.
  • Simplifying the Customs rate and tariff structure particularly for sectors like chemicals, textiles and metals and minimise disputes; Removal of exemption on items which are or can be manufactured in India and providing concessional duties on raw material that go into manufacturing of intermediate products – in line with the objective of ‘Make in India’ and ‘Atmanirbhar Bharat’.

Sector specific proposals

Electronics

  • Customs duty rates to be calibrated to provide a graded rate structure – to facilitate domestic manufacturing of wearable devices, hearable devices and electronic smart meters.
  • Duty concessions to parts of transformer of mobile phone chargers and camera lens of mobile camera module and certain other items – To enable domestic manufacturing of high growth electronic items.

 Gems and Jewellery

  • Customs duty on cut and polished diamonds and gemstones being reduced to 5 per cent; Nil customs duty to simply sawn diamond – To give a boost to the Gems and Jewellery sector
  • A simplified regulatory framework to be implemented by June this year – To facilitate export of jewellery through e-commerce.
  • Customs duty of at least Rs 400 per Kg to be paid on imitation jewellery import – To disincentivise import of undervalued imitation jewellery.

Chemicals

  • Customs duty on certain critical chemicals namely methanol, acetic acid and heavy feed stocks for petroleum refining being reduced; Duty is being raised on sodium cyanide for which adequate domestic capacity exists – This will help in enhancing domestic value addition.

MSME

  • Customs duty on umbrellas being raised to 20 per cent. Exemption to parts of umbrellas being withdrawn.
  • Exemption being rationalised on implements and tools for Agri-sector which are manufactured in India
  • Customs duty exemption given to steel scrap last year extended for another year to provide relief to MSME secondary steel producers
  • Certain Anti- dumping and CVD on stainless steel and coated steel flat products, bars of alloy steel and high-speed steel are being revoked – to tackle prevailing high prices of metal in larger public interest.

Exports

  • To incentivise exports, exemptions being provided on items such as embellishment, trimming, fasteners, buttons, zipper, lining material, specified leather, furniture fittings and packaging boxes.
  • Duty being reduced on certain inputs required for shrimp aquaculture – to promote its exports.

Government of India’s Preventive Measure for Corporates | Reporting to Ministry of Corporate Affairs (MCA)

The Novel Coronavirus (COVID-19) has affected over 110 countries, including India. Accordingly, taking cognizance of the gravity of the public health situation and in order to generate greater awareness and confidence on our state of readiness, Ministry of Corporate Affairs (MCA), Government of India, has today i.e. on 23rd March, 2020 deployed the attached notification ‘CAR (Company Affirmation of Readiness towards COVID-19)′. In view of this, every Company is required to report compliance using the above-mentioned web Form from 23rd March, 2020 onwards at the earliest convenience.

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Indian Railways Service Offering

Support Services offered by HLS India on Indian Railways practice. We are your one stop solution provider for doing business with Indian Railways which offers a wealth of opportunities as one of the state's biggest buyer
HLS service offering for Indian railways. Helping you get straight into the inner circle

Support Services offered by HLS India on Indian Railways practice. We are your one stop solution provider for doing business with Indian Railways which offers a wealth of opportunities as one of the state's biggest buyer
HLS service offering for Indian railways. Helping you get straight into the inner circle

The Emerging Indian Railways Components Sector

After decades of negative headlines, Indian Railways (IR) are enjoying some positive news. Rail companies from foreign countries are keen to invest in IR projects and see opportunities in the sector for the next 10-20 years. India is poised to be one of the largest markets for companies operating in the railway industry.

A number of government initiatives have come together to heighten the importance of IR industry as a whole and IR components sector in particular. These initiatives present new business opportunities for foreign and domestic manufacturers of rail components. In brief, the scenario can be described as follows:

Objectives of IR – Increasing its revenue by investing in: 

(i)      Dedicated Freight Corridors that can increase the freight traffic, and

(ii) High-Speed Trains which could help improve passenger revenue. 

Demand has led to new investment: In recent years, big project announcements by IR have created significant demand and investment in the sector. The future roadmap of IR and some of the focussed areas are as below:

  1. Dedicated Freight Corridors
  2. Dedicated High-Speed Corridors
  3. Infrastructure
    1. 100% railway electrification to be completed by 2022
    2. Increasing the maximum speed limit of tracks to 160 km/hr
      1. Delhi-Howrah and Delhi-Mumbai section. Work to start by December 2019.
      2. Approvals for other sections of golden quadrilateral and diagonals by December 2019 and works to start by March       2020.
    3. Increasing train speed on the existing Indian rail network up to 160 km/hr to 200 km/hr
    4. Station Redevelopment
      1. IRSDC and zonal railways to start redevelopment work in 100 stations by December 2019.
      2. Redevelopment with world-class passenger amenities – waiting halls, ticketing, toilets, escalators/lifts, LED lights, etc
      3. Commercial utilization of railway land by separate process
    5. The master plan for doubling/tripling/quadrupling of railway lines
    6. Increasing production of rolling stock
  1. Finalizing production plan of the next 10 years by July 2019
  2. Manufacturing of LHB coaches & EMUs/MEMUs
  3. The gradual replacement of ICF rakes by LHB rakes/EMUs/MEMUs
  4. Vande Bharat train sets – 100 train sets by December 2020

       iii.    Faster rakes with vista dome coaches for scenic/narrow gauge routes

  1. Addition of 200 AC rakes in Mumbai Suburban
  2. Conversion of diesel locos to electric locos –
  3. 108 in 2019-20
  4. All by 2024
  5. Introducing push-pull operations in all premium trains
  6. Solar Power Generation
  7. To lease lands on either side of tracks to companies for solar power generation.
  8. 1000 MW solar power plant
  9. Increasing the speed of empty wagons to run at 100 Kmph and loaded trains to run at 60 kmph for improving turnaround time
  10. Head on Generation (HOG) to replace End on Generation (EOG) in all premium trains to reduce diesel consumption, pollution and noise
  11. Safety & Security
  12. Advanced Signalling
  13. TCAS to be upgraded to make its features equivalent to other advanced systems.
  14. Completion of pilot projects of advanced signaling in 4 segments 2020

     iii.    Installation of advanced signaling on the whole network by 2024

  1. Approval of the cabinet for 10 MHz spectrum
  2. Crew voice and video recording systems (Black box for the trains) in 500 locos by March 2020 and in all locos in 3 years.
  3. CCTV in all coaches and an on all stations
  4. With a surveillance system
  5. All 6,124 stations and 7,020 coaches of premium trains & EMUs in Mumbai suburban by 2020
  6. Removal of level-crossings
  7. Track modernization/renewal
  8. Introduction of LHB coaches
  9. Elimination of all unmanned level crossings by 2024
  10. Passenger and Freight services
  11. Punctuality – Target 100% with accurate reporting
  12. Introducing new trains with private participation
  13. Rationalization of timetables to ensure better throughput of passenger trains
  14. Cleanliness – Stations, trains and along with the tracks
  15. WiFi on all trains and stations
  16. POS machines, digital payment facilities for payments (ticketing, catering)
  17. Eliminate jerks in all LHB rakes
  18. Rail Display Network
  19. Timetabled freight trains – especially for perishable commodities
  20. Real-Time Information System (RTIS) to be implemented 100% on all locomotives
  21. Increasing the speed of freight trains

Demand-Supply mismatch: The above-focussed areas create opportunities for railway component manufacturers from India and abroad. Additionally, a recent analysis by HLS Global in India found that supply bottlenecks exist for about 240 railway components and only a handful of suppliers exist for many key components. Hence, there is no competition and accordingly, the price would not be a matter of concern for potential suppliers. In many cases, the demand clearly outstrips the supply. Therefore, there is an immediate and very strong potential business opportunity available in certain specific areas in the railway component sector.

Ease of procurement rules and regulations: Decades of limited information about business opportunities in Indian railways component manufacturing had created significant gaps in both the capability and capacity of the domestic rail supply chain. Also, a general lack of awareness by foreign railway suppliers about procurement opportunities with IR prompted them to operate on limited information and discouraged them to do business with IR.

Working and coordinating with IR has become relatively easier over the past few years. There has been a visible improvement in terms of transparency in the working of IR. Communication between IR authorities and railway suppliers has increased manifold. A more flexible and open-minded approach has been followed by IR in adopting the international best practices and technologies for the modernization of IR.

The procurement rules have been simplified and relaxed during the stage of selection of potential railway suppliers by Research Design & Standard Organisation (RDSO – a research arm and supplier selection body of IR). A similar approach has been noticed with the procurement team at Zonal Railways, Production Units, and Railway Board too. The suppliers are being approved within the time-bound manner which greatly encourage railway components’ manufacturers to focus on the sales process and get visibility of potential revenue accrual from IR.

Critical Success Factors in Doing Business with Indian Railways:

  • Understanding specific requirements of Indian Railways
  • Practical experience in the supplier selection process of Indian Railways
  • Patience
  • Thorough execution

ABOUT US:

HLS Global is a Japanese business consulting firm and focussed on India market entry services. Amongst other industries & sectors in India, HLS Global in India helps railway companies to establish in India and sell their products & services to Indian Railways.

For any query, please email: Manu@HLS-Global.in / Meghna@HLS-Global.in / JapanDesk@HLS-Global.in

Visit: https://hls-global.in

 

Turn the Governments of India Into Your Customer

India Governments Market Review (B2G Segment)

At the end of the day, what matters is the customer. And if the governments in India are not on your list of potential customers, you may want to rethink your India sales strategy.

Apart from industry and consumers as potential customers, seizing business opportunities with the government sector in India is crucial to achieving optimum returns on India investment plans of foreign multinational companies.

The central government, 29 state governments, and seven union territories of India are among the largest buyers of goods and services in India. The estimated size of the government procurement market at the central government level alone in India is about $300 billion. Out of this, central ministries of Defense, Railways, and Telecommunication allocate approximately 50% of their respective budget on public procurement.

Government initiatives like Make in India, Digital India, Skill India, Smart Cities, Urban Transformation, FDI reforms, Ease of Doing Business (EoDB) reforms along with sectoral thrust from respective ministries such as Railways, Power, Tourism, Transport, Aviation, Food Processing, Construction, Defense represent a huge market opportunity in India for several large and small companies over the next 15-20 years.

When it comes to doing business with the Governments in India, overseas companies often raise issues related to lack of transparency, lack of standardization, corruption, and red tape leading to delays and frustration.

Currently in India, there has been emphasis on the urgent need for state governments to improve upon the ease of doing business climate as the whole world now wants to partner with India. The concept of competitive federalism is driving the governments in India to implement reforms to make processes easy for doing business in their respective states and expediting the pending project clearances.

The World Bank’s Ease of Doing Business Index has generated a lot of enthusiasm between states in India and each one is hungry for more and more investments for development.

The simplified online access to opportunities and the bidding process and the new, user-friendly procurement system helped with eliminating previous frustrations expressed by small companies. The officials at ministries and government offices have been working more professionally to expedite and execute the business process. As a result, dealing with governments in India has become more transparent and accessible to overseas small and medium-sized enterprises (SMEs) that want to bid on government contracts.

The dynamics of business negotiations in India change significantly when the customer is a public-sector enterprise or government department seeking to purchase items that may involve significant expenditures. Accordingly, overseas companies work with local representatives in India to identify relevant opportunities, discover the right contacts, and understand how the system works, including the procurement process.

 

HLS India is familiar with the culture and customs of India and can cut through the bureaucracy in government ministries to secure contracts. We can support your business efforts while helping your company avoid common mistakes.

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