CALL US : 
WAPP : 
The National Bank for Agriculture and Rural Development (NABARD) and Thanjavur Central Cooperative Bank has planned to organise 100 financial literacy programmes in Thanjavur and Tiruvarur districts, according to K. Subramanian, District Development Manager of NABARD, Thanjavur.
Speaking at one such meeting at Thanjavur recently, Mr. Subramanian said the programmes were aimed at strengthening financial inclusion by way of creating awareness on facilities such as Rupay debit and credit cards, enrolment in social security schemes, use of Internet and mobile banking or through BHIM App.
The target groups were farmers, students, senior citizens, entrepreneurs, self help group members and people who have been newly inducted into the financial system.
Manoharan, Managing Director, Thanjavur CCB, said cooperative banks, which cater to the banking needs of rural people, would seek to give a push to financial inclusion and digital transactions through their branches in Thanjavur and Tiruvarur districts. The programmes were conducted by a team of trainers. These trainers had earlier undergone a training of trainers (ToT) programme organised at the State-level by NABARD in Chennai.
Rural people would be given a feel of various options for cashless transactions with the help of mobile van equipped with digital banking technologies. The Thanjavur CCB has decided to take the mobile van to the training locations for creating awareness on digital banking in the rural areas as well, he said.
Agri marketing infrastructure
Meanwhile, progressive farmers and officials of Pudukottai district were given an overview on the Union government’s Agricultural Marketing Infrastructure subsidy scheme at a workshop organised by NABARD in the town recently.
S. Somasundaram, District Development Manager, NABARD, said storage infrastructure such as godowns with the capacity of 50 to 10,000 tonnes and silos up to 15,000 tonnes for government departments and 50 to 5,000 tonnes for all individuals and Farmers Producer Organisations can be established under the subsidy scheme. Besides, common facilities in market yards, infrastructure for direct marketing, mobile infrastructure for post harvest operations, common facility centres for Farmer Producer Organisations (FPOs), mini dhal mills, mini rice or oil mills can be established with 25% to 33.3% back-ended subsidy. The subsidy will be provided to the individuals and FPOs who avail bank loan.
Under the National Livestock Mission, 25% of back-ended subsidy is available for farmers who undertake poultry and goat rearing by availing bank loans. Similarly, agriculture graduates will be provided with subsidy of up to 36% for setting up agri-clinics and agricultural business centres.
He requested officials, progressive farmers and representatives of farmer producer companies to disseminate information about the schemes.
Earlier, Singaram, Deputy Director of Agriculture, (Central scheme), inaugurated the workshop. Rajasekar, Lead Bank Manager, Pudukkottai, and others spoke.
Archives
Government has lowered the time periods available to developers for submitting bids, making financial arrangements and setting up solar projects.
With frequent bid cancellations threatening to upset the solar capacity addition target, the power ministry has tightened the timelines for developers setting up solar projects. In its latest amendments to the guidelines for tariff-based competitive bidding of solar projects, the government lowered the time periods available to developers for submitting bids, making financial arrangements and setting up solar projects.
According to the new amendments, solar developers would get 15 months to commission the plants after signing power purchase agreements (PPAs), if they are being built inside solar parks. Plants outside solar parks would have 18 months to be set up. The earlier timelines allowed in the original bidding guidelines charted in 2017 were 21 months for solar park projects and 24 months for plants elsewhere.
Additionally, the amended guideline says that developers with projects inside solar parks would have to finalise their funding arrangements within nine months of signing PPAs. For projects outside solar parks, the statutory timeline for financial closure has been kept as 12 months, unchanged from the tenure prescribed in the original guideline.
The minimum timeline for developers to submit their bids after the request for selection (RfS) are issued have been reduced to 22 days—eight days shorter than the duration allowed in the earlier directive. Also, the normative timeline for the completion of the bidding process has been brought down by 10 days to 110 days from RfS issuance.
Against the FY19 target of 10,000 MW for ground mounted solar capacity addition, the country has only added a little over 3,270 MW in the first nine months of the fiscal. The missing of FY19 targets may have further ramifications on the 100 GW solar target set for 2022, warranting expedition of the whole process. About 4,000 MW of solar auctions had to be scrapped in the ongoing fiscal due to issues such as higher tariff discoveries and lack of clarity on safeguard duty impact. According to renewable research agency Bridge to India, another 15,234 MW of auctioned solar capacity is under development.
.Ginning and spinning have been struck off from a list of over eight manufacturing activities that will be eligible for incentives under various schemes, including credit linked interest subsidy of 6 per cent for MSMEs and 4-6 per cent for large enterprises.Under the state’s new textile policy 2019 announced on Thursday, the government has removed incentives for two crucial activities — ginning and spinning — that occupy an important role in the textile value chain
Ginning and spinning have been struck off from a list of over eight manufacturing activities that will be eligible for incentives under various schemes, including credit linked interest subsidy of 6 per cent for MSMEs and 4-6 per cent for large enterprises. “Sectors like ginning, spinning and technical textiles saw tremendous growth during Gujarat Textile Policy 2012… The state government analysed the existence of all segments in the textile value chain and identified gaps in certain segments. After careful consideration, the government has decided to come out with a new scheme to strengthen the value chain and extend support to textile industry in the state of Gujarat,” states a copy of the new policy accessed by The Indian Express.
The move to exclude spinning and ginning units is significant, considering that in the 2012 textile policy — that remained in force till September 3, 2018 — credit linked interest subsidy of about 7 per cent was provided to spinning units, which included those using 100 per cent cotton or blended with any textile fibers. Ginning activities were also covered under this subsidy. The government while providing these incentives five years ago had pointed out that “due non-availability of spinning activities, over 90 per cent of Gujarat’s cotton goes to other states for further value addition, and therefore there is a need to transform the state cotton industry as the leader in manufacturing yarn, fabric and garment with a policy to work on five Fs — Farm, Fibre, Fabric, Fashion (Garment) and Foreign (Export).”
Synthetic and Rayon Textile Export Promotion Council (SRTEPC) has stated that raising of GST exemption and composition scheme limits at the 32nd GST Council meeting on Thursday will boost small and medium units in the man-made fibre (MMF) sector and help increase exports.
SRTEPC sources said the 32nd GST Council meeting has taken encouraging decision by relaxing tax exemption limit from Rs20 lakh to Rs40 lakh on annual turnover and increasing from Rs1 crore to Rs1.5 crore composition scheme limits.
SRTEPC chairman Narain Aggarwal said, ?The step of raising exemption threshold and increasing the composition scheme limits will help small and medium enterprises, especially the power loom weavers and textile traders. Small traders having annual turnover below Rs40 lakh will not have to take GST registration. The traders and entrepreneurs registered under composition scheme of GST will have to pay tax quarterly, but file returns annually.
This will boost the confidence of the traders and entrepreneurs in the MMF sector.
Federation of Surat Textile Traders Association (FOSTTA) president Manoj Agarwal said, Majority of small traders in the markets are having turnover below Rs40 lakh per annum. These traders have got exemption from GST registration and tax filing. Also, traders under composition scheme will get benefit of filing returns annually.
A court ruling in India this week that upheld a MonsantoNSE -0.22 % patent on genetically modified (GM) cotton seeds has raised hopes among farmers that the company would now launch its next-generation seeds, the application for which it pulled two years ago.
India approved Monsanto’s GM cotton seed trait in 2002 and an upgraded variety in 2006, helping transform the country into the world’s top producer and second-largest exporter of the fibre. But newer traits have not been available since the company withdrew an application in 2016 seeking approval for the latest variety due to a royalty dispute with the government and worries over patent claims.
Nevertheless, the new herbicide-tolerant variety seeped into Indian farms and many cotton growers openly sowed them last year, prompting a government investigation that is ongoing. Monsanto has said local seed companies have illegally attempted to “incorporate unauthorised and unapproved herbicide-tolerant technologies into their seeds”.
“We don’t understand legal issues but we want new technologies,” Shrikant Kale, a cotton grower in Yavatmal district in the western state of Maharashtra, said by phone. “If the court verdict helps seed companies in bringing new technology, then it would be good for us as well.”
Nearly a dozen other farmers in three Maharashtra districts said they planted the illegal cotton variety in June after buying seeds from the grey market, and that they would be happy to use it legally if Monsanto launched it.
“Illegal sales mean that there’s always a risk of buying spurious seeds and we buy such smuggled seeds as there is no alternative,” said Vijay Niwal, another cotton farmer in Maharashtra.
“We don’t mind paying a few hundred rupees more for seeds if they help us in saving thousands of rupees on managing weeds.”
Monsanto owner BayerNSE -0.07 % welcomed the Supreme Court’s decision, saying it “prima facie validates our patent” and that it was confident of “defending any challenge to our patent by presenting solid scientific evidence”.
Monsanto did not immediately comment on future plans, including any launch of its new seeds.
But two industry sources aware of the company’s plans said that a dispute over royalties paid by local companies that licence its technology remained a hurdle to seeking fresh approval to sell a new variety of cotton seeds. India’s agriculture ministry has twice slashed royalties in the past two years, apart from cutting cotton seed prices.
The interest subsidy will be eligible on loan amount disbursed for Gross Fixed Capital Investment (GFCI).President of South Gujarat Productivity Council (SGPC), Asha Dave, said,
The textile policy will boost MSMEs in Surat and other centres in Gujarat. Sharing more details, Nitin Thakker, president, Ahmedabad Textile Processors Association (ATPA), said,
Unlike other states such as Maharashtra and Telangana, the new textile policy does not provide any capital subsidy. This will discourage new investments into the state in the textile sector in Gujarat. Another important feature of the scheme is the interest subsidy of a maximum of Rs 20 cr per annum. At a time when industry is making efforts for better energy efficiency and zero liquid discharge, the assistance should have been more, said Meena Kaviya, co-chairperson textile committee, Gujarat Chamber of Commerce and Industry (GCCI).
Industry impacted by muted global, domestic demand
The textile and clothing industry have ended the year 2018 on a mixed note in both exports and the domestic markets, expecting a revival in 2019.
“The year 2018 has been better than 2017, but not so good,” said Sanjay K. Jain, chairman, Confederation of Indian Textile Industry. International demand was largely muted because of the threat of U.S.-China trade war and uncertainties. The domestic market did not pick up as expected, especially during the last two to three months.
Exports stagnating
After nearly four years of exports stagnating at about Rs. 37 billion, textile and clothing sector is looking forward to growth this financial year. Exports between April and November this fiscal grew 7% in rupee terms compared with the year-earlier period though the growth was almost nil in dollar terms.
“This financial year, maybe we will cross it marginally. But, we need a push,” he said. India’s share in the global textile and clothing trade remains at 4%-5 %. It is all a matter of competitiveness. India’s competitiveness should improve, he added.
Apparel exports so far this financial year is down 12 %. Annual apparel exports from India is nearly Rs. 17 billion, said A. Sakthivel, vice-chairman, Apparel Export Promotion Council, It is Rs. 34 billion from Bangladesh, Rs. 21 billion from Vietnam, and Rs. 11 billion from Cambodia.
“These countries have duty free access to many markets. “We (apparel) are not able to give competitive prices in the international market. We have a price disadvantage. We are yet to come out of the GST effect. The rupee value fluctuation is also high. The government should consider increasing the ROSL (Rebate of State Levies) rate,” he says.
The overall growth could be about 5% for the year ending March 2019, said Siddhartha Rajagopal, executive director, Cotton Textiles Export Promotion Council.
Cotton textile exports are expected to be up 8% to 10%. Usually, shipments during January-March are high. Export demand was good in patches this year. Indications are that international demand will pick up next year and this will have a positive impact on exports, he said.
What is a matter of concern is increasing imports. Import of yarn, fabric and made-ups rose 13% in April-November this year, compared with the same period last year, Mr. Jain added. Imports are mainly in the man-made fibre segment and these come from countries such as China, Indonesia, and Korea.
Production of textiles and apparel in the country rose between April and October this year as against the same period last year according to IIP data. There was negative growth in 2017 because of GST and demonetisation. The domestic demand picked up in the first six months in 2018 but slowed down after that, Mr. Jain added.
With liquidity issues and stricter norms under Amended Technology Upgradation Fund Scheme (ATUFS), investments have been slow. Margins are under stress and bank finance is difficult to come. The ATUFS norms should be relaxed and liquidity should improve for investments to revive in the sector, say industry sources.
The Reserve Bank of India (RBI) on Tuesday introduced a one-time restructuring scheme for micro, small and medium enterprises (MSMEs) with a maximum exposure of Rs 25 crore.
The restructuring has to be implemented by March 31, 2020. Banks have to incur an additional provision of 5 per cent for these restructured accounts, the RBI said in a notification on its website.
To be eligible, the MSME account should remain a ‘standard asset’ as of January 1. Accounts in default can be restructured, provided their asset classification has not been downgraded.
“Any MSME account which is restructured must be downgraded to non-performing asset upon restructuring, and will slip into progressively lower asset classification and higher provisioning requirements,” the RBI said.
Such an account can be considered for upgrade to ‘standard’ after a year, only if it demonstrates satisfactory performance, which means debt servicing should not remain due for more than 30 days.
The entity, unless already exempt, should be goods and services tax (GST)-registered. Banks and non-banking financial companies (NBFCs) will have to disclose the number of accounts restructured and the amounts involved. The lenders should have board-approved policies for the restructuring.
The restructured accounts need to be disclosed. Banks and NBFCs should have board-approved policies on restructuring.
The issue of restructuring of MSMEs under stress was first decided in the November 19 board meeting of the RBI. The central bank’s board member S Gurumurthy had been a vocal supporter of a special scheme for MSMEs.
Newly appointed RBI Governor Shaktikanta Das had discussed MSME restructuring in his first meeting with bankers.
Fitch Ratings had, earlier, warned allowing restructuring of MSME loans up to Rs 25 crore would be a “step backwards”, with the risks becoming apparent in the next six to nine months.
“In one way, it is a step backwards, given the RBI’s previous stance to do away with all restructuring. It clearly reflects stress in the MSME sector, although we expect risk to manifest in the next six to nine months,” Saswata Guha, director (financial institutions), Fitch Ratings, had said in a report.
Guha had warned banks would not be careful in restructuring the loans, given their past records, and this would build up stress.
“There is adequate evidence in the form of $140 billion of non-performing loan stock that the sector is currently grappling with, which, in my opinion, is a direct result of the unbridled lending of the past,” the rating agency had said in its report.
At Rs. 94,726 cr. in December, it is lower than the Rs. 97,637 cr. collected in November
The government’s collections from the Goods and Services Tax (GST) declined for the second month in a row to Rs. 94,726 crore in December, official data released on Tuesday showed.
Collections declined from the Rs. 97,637 crore in November, which was itself lower than the Rs. 1,00,710 crore collected in October.
“The total gross GST revenue collected in the month of December 2018 is Rs. 94,726 crore of which CGST is Rs. 16,442 crore, SGST is Rs. 22,459 crore, IGST is Rs. 47,936 crore… and cess is Rs. 7,888 crore,” the government said in a statement. “The total number of GSTR 3B Returns filed for the month of November up to December 31, 2018 is 72.44 lakh.”
‘A bit discouraging’
“The slight dip in GST revenue collections as compared to the last two months is a bit discouraging,” Abhishek Jain, tax partner at EY, said.
“This may deter the government from rationalising the rate of goods left in the 28% category like cement, auto parts, etc, in the short term,” Mr. Jain added.
The GST Council had in its 31st meeting in December cut rates on 17 items and six types of services, leaving just one common use item — cement — in the 28% tax bracket. The new rates took effect from January 1, 2019.
“While the December collections are lesser than October (where it exceeded Rs. 1 lakh crore) and November, overall average collection for 2018-19 has shown marked improvement over 2017-18,” Pratik Jain, partner and leader, indirect tax, PwC India, said.
“This, coupled with decent growth in income tax collections, gives a clear indication that the tax base is expanding.”
Mr. Jain said the next couple of months may also see similar collections, which means that the central government might want to come up with a “more realistic” estimate of GST collections for next year.
Loans of up to Rs. 25 crore eligible for relaxation of provision
Following a demand from the government for a debt recast package for micro, small and medium enterprises (MSMEs), the Reserve Bank of India (RBI) has relaxed the provisioning norms for lenders for restructuring loans of up to Rs. 25 crore.
According to the guidelines released on Tuesday, the RBI has allowed one-time restructuring of existing loans to MSMEs that are in default but ‘standard’ as on January 1, 2019. Banks have to make only 5% provisioning for restructuring the loans as compared to 15-20% earlier.
The government has been asking for such a package for a long time for the MSME sector which was severely hit due to demonetisation exercise and implementation of the Goods and Services Tax (GST).
Enabling environment
“Considering the importance of MSMEs in the Indian economy, it is considered necessary at this juncture to take certain measures for creating an enabling environment for the sector,” RBI said. The issue of restructuring of MSME accounts was discussed by the RBI board on November 19, 2018 . The issue also figured during RBI’s recent interactions with the lenders.
“The above issue has been examined in RBI and a view has been taken to facilitate meaningful restructuring of MSME accounts that have become stressed,” RBI said.
The restructuring has to be implemented by March 31, 2020, the RBI said.
“A provision of 5%, in addition to the provisions already held, shall be made in respect of accounts restructured under this scheme,” the RBI said, adding that each bank or non-bank should formulate a policy for this scheme with the board’s approval.
