Tag: COVID-19 crisis

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Finance

Union Budget 2021 Should Focus More on Growth Recovery; Fiscal Deficit May Fall to 6.2 Percent in FY22, Says Report

budget 2021-2022

Mumbai, January 28: The annual Union Budget is round the corner. The Union Budget is slated to be presented on Monday, February 1, 2021 while the Economic Survey will be tabled on Friday, January 29, 2021. All eyes will be on the forthcoming Union Budget as it is expected to focus more on putting the economy back on track. According to a report by India Ratings, the focus of the budget will be to get back things to normalcy and not too much on arresting fiscal deficit, which is seen at 6.2 percent in 2021-22, down from 7 percent this year.

The Union Budget 2020-21 had estimated fiscal deficit at Rs 7.96 lakh crore or 3.5 percent of GDP but India Ratings sees it printing in at Rs 13.44 lakh crore or 7 percent if the government cleared its payables and roll over some portion of expenditure to 2021-22.

India Ratings Chief Economist Devendra Pant said that the 2021-22 budget is likely to project a fiscal deficit of 6.2 percent but that will be achievable if nominal growth comes in around 14 percent and real growth prints in at 9.5-10 percent. The study pegged growth at 9.6 per cent for 2021-22 and (-)7.8 per cent for the current financial year 2020-21.

The report said that the fiscal impact of the economic packages worked out to be about Rs 3.5 lakh, or 1.8 percent of GDP. Even without this package, Ind-Ra had estimated that FY21 will witness a revenue shortfall of Rs 60,000 crore due to aggressive estimation of revenue receipts, it added. The government adopted a lose fiscal policy due to the coronavirus pandemic and announced a number of policy measures under Atmanirbhar Bharat packages to support the economy. The report adds that as per the grant-wise expenditure trend, the report estimates revenue expenditure in 2020-21 to be Rs 26.65 lakh crore as against a Budget Estimate of Rs 26.30 lakh crore.

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Startup

Startups in India Bagged $9.3Bn Investments in 2020 Despite COVID-19 Challenges: Report

Startup
Startup (Photo Credits: Pixabay)

Amid the COVID-19 pandemic in India, the startups have been hit hard but have managed to emerge successful in attracting investments this year. According to data from consultancy firm Tracxn, Indian startups received investments to the tune of $9.3 billion in 2020 despite the coronavirus challenges. The report reveals that fortunes for the Indian startups turned significantly in the second half of the year. The study reveals that startups raised just $4.2 billion in the first half of the year from about 461 deals while the year saw 11 Indian startups including RazorPay, Glance and Unacademy becoming a unicorn.

According to a report by IANS, the figure is much lower than the record $14.5 billion raised by Indian startups last year as the number of deals this year reached 1,088 from 1,185 last year, TechCrunch reported on Monday. Reports inform that there were 20 funding rounds with dealsize $100 million or larger in 2020 compared to 26 in 2019. Similarly, rounds with dealsize $50 million to $100 million fell to 13 in 2020 from 27 last year. Moreover, the figures exclude the funds rasied by Jio Platforms, which alone bagged over $20 billion investments this year.

The Tracxn report further adds that global technology giants like Google, Microsoft and Facebook wrote checks for Indian startups, while Chinese giants such as Alibaba and Tencent made fewer investments amid border tensions with India.

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MSME Startup

COVID-19 Impact: 78% MSMEs and Startups in India Reduced Workforce in Last 8 Months Since Pandemic Broke Out, Says Survey

Startup (Representational Image Only, Photo Credits: NeedPix.com)

New Delhi, October 20: Ever since the COVID-19 pandemic broke out in India, as many as 78% MSMEs and startups across the country have reduced workforce in the last 8 months. As per a survey by LocalCircles, only 22 percent startups and MSMEs have the same or increased workforce as compared to the pre-COVID levels. According to reports, India’s startups and MSMEs ecosystem went through a torrid time due to the deadly pandemic and lockdown that was imposed across the country. Revenues and operations were severely impacted for most businesses which led to cost cutting and some even shut down temporarily or permanently. Per CMIE, 6 million Indians had already lost white collar jobs in the March – August period.

To understand the impact of the pandemic on startup and MSME, a survey conducted by LocalCircles received over 7,000 responses from startups, MSMEs and entrepreneurs spread across 104 top business districts of the country. In the survey, startups and MSMEs were asked about how have workforce adjustments taken place in their business during the Covid-19 pandemic. In response, 25 percent said their business has shut down and all workforce has been let go, while 15 percent said their workforce has reduced by 50 percent or more.

A 19 percent said their workforce has reduced by 25-50%, and another 19 percent said their workforce has reduced by up to 25 percent. A 6 percent said their workforce has increased and 16 percent said they have same workforce as pre coronavirus time. This shows that 78 percent MSMEs and startups in India have reduced workforce in the last 8 months since the COVID-19 pandemic broke out and only 22 percent startups and MSMEs have the same or increased workforce as compared to the pre-COVID levels.

The Government also took steps to help these small businesses through the Atmanirbhar Bharat scheme, but its advantages per feedback from businesses in July this year has been quite limited, the survey said.

The startups and MSMEs in India were asked about how employment of women has been in their business 8 months into the COVID-19 pandemic. In response, 7 percent said women in their workforce have been reduced by 50-100 percent, 12 percent said women in their workforce have reduced by 25-50 percent, and 12 percent said women in our workforce have been reduced by up to 25 percent. 46 percent said they still have same number of women in the workforce as pre COVID-19. Not a single business reported increase in the number of women employees during the course of the 8 months of COVID-19 pandemic.

This means that 31 percent MSMEs and startups in India have reduced women workforce in the last 8 months. The Labour Force Participation Rate (LFPR) among women in India, is one of the lowest in the world and appears to have slid even further during the COVID -19 pandemic.

In the final question, startups and MSMEs were asked looking at the next 6 months as to how do they see employment of women in their business. In response, 50 percent said they don’t plan to hire any women employees while 30 percent said they plan to hire 1-5 women employees. 13 percent said they plan to hire 6-10 women employees and 7 percent were unsure about it.

 

Categories
MSME

MSME Sector to Grow and Contribute to Job Creation With the Help of Structural Reforms Taken by Modi Govt, Says Finance Ministry Report

Business in India | Representational Image Only (Photo Credits: Pexels)

New Delhi, October 6: The Finance Ministry on Monday said that the major structural reforms launched by the Modi government in agriculture markets, labour laws provide unparalleled opportunity for the MSME sector to grow and prosper. These reforms will in turn contribute to job creation in the primary and secondary sectors. A report by the Finance Ministry stated that the historic labour reforms will benefit MSMEs to increase employment, enhance labour productivity and thereby wages in MSMEs.

According to a report by PTI, the Finance Ministry said that important structural reforms that have been taken by the government to ease the risks posed by COVID-19 pandemic will strengthen India’s economic fundamentals and ensure long-term sustained growth. “The enabling policy environment and initiatives taken by all stakeholders to seize the available opportunities will actualise the growth potential of the Indian economy,” the monthly economic report prepared by the Economic Affairs Department of the Finance Ministry said.

The report further said that the sustained spread of the virus poses a downside risk to short-term and medium-term growth rate, adding that the government has strategically undertaken various important structural reforms, encompassing various sectors, to combat these risks. Meanwhile, the implementation of ‘Atmanirbhar Bharat’ package and unlocking of the economy have ensured that economic recovery in India has gained momentum.

The PTI report adds that as on September 25, India’s foreign exchange reserves stood at USD 542.02 billion, equivalent to more than 13 months of imports. India”s probable growth path is visible in this assessment.

Categories
Startup

Here’s What Arvind Kejriwal’s Delhi Govt is Doing For Startups Amid COVID-19 Crisis

Startup
Startup (Photo Credits: Pixabay)

Delhi, August 13: Amid the coronavirus pandemic, when businesses have been badly hit, it is the startups who have been affected the most. In order to give fillip, Delhi Chief Minister Arvind Kejriwal recently met industry leaders, young entrepreneurs to draft a new policy for startups. The objective is to make Delhi a leading choice for startups.

Delhi boasts of over 7000 start-ups and it is also on top of the list of cities with the most number of active start-ups, according to a report by TiE. In addition to this, the CM further highlighted that the valuation of the city’s start-ups is about $50 billion. The report published in 2019, mentioned that Delhi-NCR is set to become one of the top five global startup hubs with 12,000 start-ups, 30 unicorns, and a cumulative valuation of about $150 billion by 2025.

The Objective Behind the Draft policy For Startups:

According to the statement released by the Chief Minister’s office, the objective of the draft policy is to support entrepreneurs and help create a robust economic and policy infrastructure that will create new jobs and add competitive dynamics into the current economic system.

Takeaways of CM’s Meeting With Experts:

The prominent participants in the discussion held were Ajay Chowdhry of HCL, Rajan Anandan MD Sequoia Capital, Padmaja Ruparel of Indian Angel Network, Sriharsha Majety, co-founder and CEO, Swiggy, Suchita Salwan, founder and CEO, Little Black Book, Tarun Bhalla, founder, Avishkaar and others.

Some of the suggestions included creating industry-academic partnerships, entrepreneurship programs for young professionals in Delhi and making the national capital’s physical infrastructure more conducive for startups to work.

Here’s the 2-Step Process of Drafting the New Policy:

The drafting of the new policy for startups will be conducted in a two-step process. The first step involved consulting industry leaders, experts from various sectors to provide valuable inputs in drafting the policy.

In the second step, the draft would be put up online for the public to recommend changes and suggest new policy rules.

Arvind Kejriwal along with the industry leaders are hopeful that with the new startup policy, Delhi will surely become a preferred destination for startups. It will also fight the economic instability that has been created due to the coronavirus crisis.