India’s Corporate Growth in Macro Parameters FY 2021–22

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  1. According to research by CBRE South Asia, office space leasing in India grew 97% YoY to nearly 11.4 million sq. ft. in the first quarter of 2022, with Bangalore, Chennai, and Delhi-NCR accounting for two-thirds of transactions. Technology corporations accounted for around 34% of leasing, followed by BFSI companies (17%), flexible space operators (13%), engineering and manufacturing (12%), and research, consulting, and analytics (11%) organisations.
  2. AND finally, the big cheers…
  3. Words of Caution
  4. RBI has unveiled various reforms and measures to boost the overall financial position of the country and enhance liquidity within the system

MCA registers 1.67 lakh companies (highest ever) in FY 2021–22

The Ministry of Corporate Affairs registered 1.67 lakh+ new companies in FY22, compared to 1.55 lakh in FY21, an 8% YoY growth. It`s noteworthy that the FY21 number was the highest annual number of all time. During FY22, the states having the highest number of company registrations were Maharashtra (31,107), followed by Uttar Pradesh (16,969), Delhi (16,323), Karnataka (13,403), and Tamil Nadu (11,020).

Sector-wise, the maximum number of companies were incorporated in business services (44,168), followed by manufacturing (34,640), personal & social services (23,416), and agriculture & allied activities (13,387).

India tops milk production, turnover higher than wheat and rice

On 19th April`22, during inauguration of the Banas Dairy’s new dairy complex and potato processing factory at Diyodar, Banaskantha district in Gujarat, PM Mr. Modi said that, India produces milk worth ₹ 8,50,000 crore (US$ 111.3 billion) annually, more than wheat and rice combined, and those small farmers benefit the most from the dairy industry. While addressing women dairy farmers on the occasion, Mr. Modi said that Banas Dairy was an example of how a cooperative movement can boost a village’s economy while also empowering women, bolstering the “Aatmanirbhar Bharat” campaign.

Trade Agreements signed with Australia and UAE will open infinite opportunities

Union Minister of Commerce and Industry, Consumer Affairs, Food, Public Distribution, and Textiles, Mr. Piyush Goyal, said that new Economic Cooperation and Trade Agreements (ECTA) with Australia and the United Arab Emirates (UAE) would provide Textiles Handloom and Footwear with limitless potential. He expressed optimism that Europe, Canada, the United Kingdom, and the Gulf Cooperation Council countries would soon follow suit.

Furthermore, India and Malaysia reviewed their whole range of bilateral relations and expressed determination to increase collaboration in a wide range of areas in the post-Covid period.

Number of patent filings rises to 66,440 in FY22

Some of the key initiatives taken by the Government over the years that has bolstered India’s IP regime includes fee concessions like 10% rebate on online filing, 80% fee concession for Start-ups, Small Entities and educational institutions, and provisions on expedited examination for Startups and MSMEs along with other categories, states a ‘Ministry of Commerce & Industry’ filing.

• There has been an over 50% jump in the number of patent filings in the past 7 years, from 42,763 in 2014–15 to 66,440 in 2021–22.

• The grant of patents has shot up almost five times to 30,074 in FY22, compared to 5,978 in FY15.

• The time taken in patent examination has dropped from 72 months in Dec`2016 to 5 to 23 months, varying across different technological areas.

• The country’s ranking in ‘Global Innovation Index’ has climbed to the 46th position in 2021 (+35 ranks) from the 81st in 2015–16.

The Ministry said that in the final quarter of FY22, of the total 19796 patent applications filed, 10706 were filed by Indian applicants, compared to 9090 applications by international applicants.

India’s tax collections soar to record high of Rs 27.07 trillion in FY22

India’s tax collections rose to a record high of ₹ 27.07 lakh crore (US$ 356.83 billion) in FY22 as mop-up from income and other direct taxes and indirect taxes increased, according to Mr. Tarun Bajaj, Secretary, Department of Revenue.

While direct tax revenues increased by 49% previous fiscal year, indirect tax collections increased by 30%. The tax-to-GDP ratio increased to 11.7% in FY22, up from 10.3% in FY21. This was the greatest level of inflation since 1999.

Office space leasing grows 97% YoY in Q1 2022

According to research by CBRE South Asia, office space leasing in India grew 97% YoY to nearly 11.4 million sq. ft. in the first quarter of 2022, with Bangalore, Chennai, and Delhi-NCR accounting for two-thirds of transactions. Technology corporations accounted for around 34% of leasing, followed by BFSI companies (17%), flexible space operators (13%), engineering and manufacturing (12%), and research, consulting, and analytics (11%) organisations.

Startups raised over $10 B for third straight quarter in Jan-Mar

According to a report by PwC India, Indian entrepreneurs have raised more than US$ 10 billion for three consecutive quarters, with the world’s third-largest startup ecosystem raising US$ 10.8 billion in the first quarter of calendar 2022. The US$ 10.8 billion in capital was spread across 334 deals between January and March, according to the research titled ‘Startup Deals Tracker — Q1 CY22,’ with software-as-a-service (SaaS) companies receiving the largest portion of US$ 3.5 billion.

Banks’ credit growth nearly doubles in FY22

Bank credit growth in FY22 was 9.6% compared to 5.6% in FY21. Deposit growth fell to 8.9% in FY22, down from 11.4% in FY21.

Total bank credit stood at ₹ 118.9 lakh crore (US$ 1.56 trillion) on March 25, the last reporting Friday for FY22, according to figures issued by the Reserve Bank of India (RBI). This is an increase of ₹ 1.8 lakh crore (US$ 23.72 billion) in the last two weeks and ₹ 10.4 lakh crore (US$ 137 billion) in the last financial year, representing a 9.6% YoY increase.

India’s Growth Gained FY2021–22

AND finally, the big cheers…

India overshoots export target; achieves USD 417.8 billion exports in 2021–22

Merchandise exports from India have reached USD 417.8 billion in the current financial year. This figure excludes the figures from non-EDI Ports and adding that, it is likely to exceed $418 billion, an all-time high in India’s export history.

India has achieved highest monthly value of merchandise export in March 2022 amounting USD 40.38 billion, an increase of 14.53% over USD 35.26 billion in March 2021 and an increase of 87.89% over USD 21.49 billion in March 2020.

Words of Caution

War at Ukraine, supply chain disruptions, rising commodity prices can post roadblocks even when macroeconomics parameters are pointing towards growth of our country.

Pharmaceuticals

Our pharma industry depends on imports for 90% of its active pharmaceutical ingredient (API) needs and increased volatility because of the Ukraine crisis is going to make matters worse.

Sun Pharmaceuticals and Dr. Reddy’s Laboratories (DRL) have production facilities in Russia and offices in Ukraine.

Director General and CEO of the Federation of Indian Export Organisations (FIEO). “There is about $400 million in unrealized receipts for exports that have already been shipped.” Most of that is from Russia. The problem, Sahai says, is that the financial consequences can be steep for exporters.

Commodities

Over March 7 and 8, the price of nickel on the London Metal Exchange (LME) shot up from roughly $29,800 to over $100,000 a ton, forcing the LME to suspend trading, and launch an investigation into the causes. Russia accounts for 9 per cent of global supply, but influences prices hugely.

The immediate effect of the invasion of Ukraine was the jump in crude oil prices, which traded upwards of $110 a barrel at one point, though it softened to less than $105 thereafter.

However, the significant jump in spot prices worries economists, whose estimates on the tipping point for crude prices — the point at which the Indian economy will begin to feel the full impact — vary between $80 to $100 a barrel.

One of the major results of inflation in an economy is the general slowdown of the economy. When this happens unemployment rates rise, the purchasing power of the consumer decreases, credit becomes expensive. All these causes a strain on the entire financial system of the country.

Earlier this week, the ministry of commerce and industry released the wholesale price index (WPI) for the month of March. At 14.5%, it was the second highest since 2012. Almost all institutional and private forecasts expect tailwinds to inflation and headwinds to growth in the global economy.

Skyrocket FY21–22 India

(Pessimistic scenario is considering worsening of current war situation)

Steel

The hike in steel prices could be beneficial for India, according to Amit Dixit, Director, Institutional Equities at Edelweiss Financial Services Ltd. “About 11 per cent of seaborne global steel exports are from Ukraine and Russia,” he points out. “Most of it is intended for Southeast Asia, and the crisis will disrupt their supply. This can be an opportunity for Indian steel makers to enter that market.”

There are hundreds of containers carrying vessels stranded in high seas waiting for easing out of the situation. The demurrage is mounting on daily basis and exports are in tight spot. Many exporters are looking for opening in land routes and few are weighing options to sell the merchandise to some other country to recover their costs fast.

RBI has unveiled various reforms and measures to boost the overall financial position of the country and enhance liquidity within the system

Measures by the central bank (RBI) as per latest MPC (Monetary Policy Committee) report

§ A fast and robust economic recovery –

The surplus liquidity of RBI Increased to an average of 9 lakh crore INR per day In September 2021 compared with 7 lakh Cr during June-August 2021. It further Increased to INR9.5 lakh Cr on 6 October 2021.

§ Driving digital payments thereby increase in consumer convenience –

The per-transaction limit of Immediate Payment Service (IMPS) has been increased to 5 Lakh from 2 Lakh form Oct`2021.

§ Improving consumer protection and the internal grievance redressal mechanism of NBFCs –

A new Internal Ombudsman Scheme (IOS) has been Introduced by RBI for NBFCs having a large customer base.

§ Better operational flexibility to banks –

The banks are now allowed to Infuse capital in their foreign subsidiaries and branches and hold profits in these centers and repatriate/transfer profits with the approvals of their board If they meet the regulatory capital requirements, without prior Information to the RBI.

§ Promoting the participation of retail Investors in areas such as investment in government securities through the use of UPI –

Retail Direct Scheme, wherein payment options such as UPI and Internet banking can be leveraged by retail customers for participating in primary and secondary markets has been launched in November 2021 by RBI. It has raised the transaction limit for UPI payments for Retail Direct Scheme and Initial Public Offerings from 2 lakh to 5 lakh.

· Facilitation of the delivery of different government schemes to the respective beneficiaries –

It Is proposed to raise the cap on the amount for e-RUPI vouchers from central and state governments to 1.00.000 per voucher from 10,000 per voucher and permit the repeated use of these vouchers until the amount in them is fully redeemed.

· Increasing liquidity requirements of MSMEs –

It Is proposed that the National Automated Clearing House (NACH) mandate limit be Increased to 3 crore Rs for Trade Receivables Discounting System (TReDS) — related settlements from the present cap of 1 crore.

· Linking the digital health solutions of hospitals across the country –

The government launched ‘Ayushman Bharat Digital Mission’ In September 2021, providing digital health ID to each Individual.

Healthcare, agriculture and tourism sectors

Agriculture:

· Maximising the productivity of the available cultivable area and enhance the reach of improvements in farming tools and technology to small and marginal farmers and remote areas -

The government aims to empower farmers under the Sub-Mission on Agricultural Mechanisation (SMAM) scheme by releasing funds for various activities of farm improvements to different states

· Promoting holistic growth of the horticulture sector -

Allocated of ₹ 2,250 crore for development of the horticulture sector during 2021–22

· Government announced the Digital Agriculture Mission (2021- 2025) in September 2021 focusing on aiding and accelerating projects based on new technologies, such as AI and block chain.

· Uplifting and strengthening the dairy sector –

Dairy Sahakar scheme In Anand, Gujarat in October 2021 has been launched by Govt.

‘Production Linked Incentive’ (PLI) and addition of new sectors

  • Specialty Steel Sector — A five-year PLI scheme with incentives of 6,322 Cr announced for the manufacture of specialty steel products in India creating estimated 5.25 Lakh jobs. It is likely to bring in fresh Investments and lead to capacity additions within specialty steel segment.
  • Automobile sector — 20 key players have been selected for the Champion OEM (original equipment manufacturer) incentive Scheme under the PLI scheme.
  • Semiconductor and display manufacturing sector — the government has sanctioned Rs 76,000 crore to encourage set up of entire ecosystem, ranging from design, fabrication, packaging and testing of various semiconductor goods within India. This will reduce our reliance on imports.

National Monetisation Pipeline (NMP)

The Government of India has unveiled a four-year National Monetisation Pipeline (NMP) worth ₹ 6 lakh Cr. spread over a four-year period, from FY22 to FY25. Among the assets to be monetised, roads, railways and power sector assets will account for more than 66 per cent of the total estimated value of the assets to be monetized.

Expected results

Funding new capital expenditure without dipping into government finances

Unlocking value in public sector brownfield assets and utilise those funds for Infrastructure development across country.

Potential to raise economic growth with a focus on Infrastructure expansion while generating employment.

  • **Source — Govt press releases, Governor’s statement, February 10th` 2022, RBI website, MPC report 2022, Business standards, Economic times and Asia Development Bank.

Above article was well researched & provided by published by Fisage Solutions.