India Growth Report 2018

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India continues to make progress with policy reforms and initiatives that are making India a place with unprecedented opportunities for global and domestic businesses.

India’s progress on the World Bank’s Ease of Doing Business rankings, to a rank of 100, progressing from 14201 just three years ago (2015), reflects a focus on this topic at the centre and the states. Building on bankruptcy reforms, major nonperforming assets situations were identified for resolution and actions moving forward. Foreign Direct Investment (FDI) was further liberalised. In 2016-17, FDI reached an all-time high of USD60.1 billion.

A stable macroeconomic environment is a precursor to growth. India has demonstrated a resolve to achieve fiscal consolidation, complemented with aggressive and not purely populist measures. Retail inflation averaged at 3.4 per cent for the April – January FY18 period, significantly lower than 4.5 per cent during the same period in FY17, and, while fiscal deficit for FY18 modestly increased to 3.5 per cent of Gross Domestic Product (GDP), attributed mainly to uncertainty over Goods and Services Tax (GST) collections, the government is committed to further lower it to 3.3 per cent in FY19. The government has also addressed the deterrents and roadblocks to the country’s potential to grow, with progressive policy reforms such as GST and the newly formed Insolvency and Bankruptcy Code (IBC).

In spite of some reformative steps that slowed the growth momentum in the first quarter of FY18, the economy is likely to grow at 7.4 percent in 2018, higher than the advanced economies and the world, i.e., 2 per cent and 3 per cent, respectively.
India has been recording the highest growth rate amongst the Brazil, Russia, India, China and South Africa (BRICS) economies. Buttressing India’s stability is its foreign exchange reserve of about USD420 billion.

Ease of doing business (EODB) is an area where concerted actions have led to important results. The government has adopted more than 7,000 initiatives to improve EODB in the country. As a result, India is now placed amongst the top-five countries that improved its ranking in the World Bank’s Doing Business 2018 Report and, for the first time was ranked in the top 100 economies.

India recorded improvements in 9 out of 10 indicators supported by major measures such as time-bound clearance of applications, de-licensing manufacturing of defence equipment, single-window clearance mechanism, reducing documents required for trade and introducing a single form for online return filing.

This should be recognised as just the beginning of India’s continued efforts to become one of the most investor friendly nations, as it continues to focus on progressing in areas such as trade across borders, enforcement of contracts, registration of property and starting a business to create a more enabling, participative and inviting economic ecosystem.

Improving ease of doing business is an important enabling factor for attracting investments.

Other aspects to advance investments are the promotion of new sectors for investments, skill enhancement and employability. These areas are intertwined and are of key importance to investors. These are being addressed through several central government schemes, which have been adopted by most states.
New regulations also play a key role. While the GST unifies the country’s tax regime, the IBC helps address the resolution of high levels of Non Performing Assets (NPAs) – USD128 billion across 38 listed public and private banks, which have been weighing down the banking system.

This report also highlights India’s efforts to be a digitised economy. A consequence of demonetisation, adopted in November 2016, was the significant thrust to digital transactions in the country. The volume of digital transactions has increased significantly, reaching a record level of 1.1 billion in December 201708. In addition, the cash-to-GDP ratio declined to 8.8 per cent as of FY17, registering a drop from 12.2 per cent in FY16, indicating increased formalisation of the economy.

This report also analyses the progress achieved under several national priority programmes. Skill India, a flagship initiative of the government, has been able to strengthen the ecosystem wit qualified individuals by way of increasing the number of Industrial Training Institutes (ITI) in the country and offering the total number of Qualification Packs (QPs) across sectors.

The setting up of State Skill Development Missions by states has advanced the upskilling of the country’s workforce.

Similarly, the Swachh Bharat Mission and Smart Cities Mission have gained momentum and are promoting administrative professionalism and citizen engagement. Other initiatives like Startup India and Make in India have made inroads into different sectors of the economy, helping states foster a culture of entrepreneurship and innovation.

Sound infrastructure is important for business. Many steps have been taken to address port development and connectivity issues to make India a global logistics centre. The coastal shipping sector in India currently contributes to merely 6 per cent of the entire coastal and inland waterway freight movement. Plans are underway to double this share by 2025.

An area of significant progress has been roads, the lifeline of the country, where significant projects are being accomplished through public private partnership (PPP) models.

This sector has been opened up for 100 per cent FDI under the automatic approval route, subject to applicable laws and regulations.

Bharatmala is envisaged as a programme to develop 34,800 km of roads in its first phase, along the lines of Sagarmala which is a connectivity initiative in the ports and shipping sector. The Railway Budget in 2017 was consolidated with the Union Budget and the government earmarked a historic budget outlay to reshape Indian railways and allied sectors. With the growing need and importance of alternate sources of energy, the government has taken a series of initiatives, especially in the renewable energy (RE) sector paving the way for a host of investment opportunities in this growing sector as detailed in this report.

A majority of the industrial activity happens in the Micro, Small and Medium Enterprises (MSMEs) sector. Indian MSMEs, with approximately 63 million units, contribute 8 per cent to national GDP, employ over 111 million people and manufacture over 6,000 products.

The government intends to enhance the manufacturing sector’s contribution to 25 percent of GDP. Hence, several central government schemes are made to benefit this sector directly. Key steps have been taken by the government for this sector including reduction of the income tax rate of 25 per cent for MSME companies having a turnover of upto USD38.65 million and Minimum Alternate Tax credit carry forward extended to 15 years from 10 years.

Looking ahead, the promise of the many government initiatives mentioned must be realised through rigorous monitoring of these programmes.

India still needs to take further steps to restructure its trade and FDI regime. The country needs to be even more responsive and flexible to address global investors’ requirements.

It is now imperative that a fine balance be struck between the need to push public investment on the one hand and keep the fiscal deficit under check on the other.

Consumer spending could get a boost with a wise mix of public spending and other fiscal reforms to spur demand in the nation. The government will need to facilitate increased exports and further streamline the GST ecosystem.

Reforms are vital for sustainable growth. The Indian economy is moving in the right direction with initiatives taken towards stepping up infrastructure investment, land and labour market reforms and measures to boost manufacturing growth.

While all these can still be classified as an ‘unfinished agenda’, a significant volume of work has already been undertaken towards the completion of these tasks, in terms of a conducive policy environment as well as on the ground effort.

A combination of supportive global growth, improving capex, fiscal spending, a buoyant consumer and concerted policy efforts augur well for a stronger growth outlook for the Indian economy over the short to medium term.

India is marching ahead and setting examples for not just the developing economies but also for developed ones. India has many successes to be proud of – ranging from the Aadhaar programme extending unique identification to 1.14 billion individuals in 2017 to policy measures that provide an impetus to entrepreneurship.

Areas of focus and progress are varied and include simplification of taxes, focus on improving ease of doing business, right to information, universal education, food security, sanitation, rural employment
and governance and transparency.

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Responsibilities to be Handle with Care: Routine Compliances Matters

Routine Compliances

Routine Compliances

Starting a Business in 21st century is way easy, then actually running it in this competitive world. Loads of responsibilities and obstacles breaks heart and soul of many business personality during their journey. Survival is the first step of success as most of the firms are not even able to survive for short periods like 2-3 years. In such environment of competition maintaining data, records and managing compliances is the biggest task that every firm have to deal with. Here you need experts and professionals like SP Chopra & Co. to take care of your belongings more professionally and with great responsibility.

What is Routine Compliance Matters?
There are lots of matters which are to be taken care of while running of business. Many of those are of unproductive nature but are very important for smooth functioning of the firm. Routine Compliance Matters are mostly which have to be taken care of timely and with great care. These are essential documentation and set ups which are to be done and maintain properly time to time. So better give these responsibilities in hands of capable professionals like SP Chopra & Co. so that you can focus on the core functions of your business enterprise without any worry. Let’s see what SP Chopra offers you in this service :

• Convening, Holding and Drafting of the minutes of Directors and Extraordinary General meetings : Managing the minutes of director and holding up the General meeting is not that easy as it sounds; as one have to go through a proper procedure and documentation which consumes part of important and productive time so, if it’s been handle by some professionals then it sounds great for the smooth functioning of the firm isn’t it ?

• Constitutional Changes: It includes changes in name of the company, registered address, place of business , objects of business, financial year, increase/decrease of registered share capitals and so many more which SP Chopra & Co. will manage for you.

• Changes in Company’s Management: It refers to changes that happens in directors means their removal, resignations or appointment.

• Company incorporation and branches establishments, including Corporate documents for various uses: This includes all the paper work/documentations and certain formalities regarding establishment of branches and incorporation of the firm.

• Voluntary liquidations and deletions of companies and place of business: This means the procedure and formalities related to deletion or liquidation of companies and place of business.

• Simple (inner groups) share transfers, share issues: This includes procedure while transferring or issuing of shares among the inner groups of the firm like directors and so on.

Well SP Chopra & Co. have a lot to offers and this is just small overview on Routine Compliance Matters. Let SP Chopra & Co. reduce your loads of responsibilities so that you can focus on the core functioning of your business carefree.

International Association between PrimeGlobal and SP Chopra & Co

International Association between PrimeGlobal and SP Chopra & Co

International Association between PrimeGlobal and SP Chopra & Co

In a global business environment, finding an accountant firm with strong technical skills in audit, taxation, and consulting services is not enough. You will be required to need an advisor with the ability to do business almost anywhere – in almost any kind of business you can think of.

When you use a PrimeGlobal firm, suddenly you are working with an international, multidimensional powerhouse. PrimeGlobal independent member firm know and care about each other – which makes them masters of the seamless transition. You get the best of all possible in this worlds.

PrimeGlobal, Founded in 1977 and 1978 is the third largest association of independent accounting firms in the world; as of June 2013, the association was comprised of over 320 highly successful independent public accounting firms in 87 countries.

SP Chopra & Co (An ISO 9001:2015 & 14001:2015) is a global Chartered Accountant firm with 65 years of establishment, an independent member firm of PrimeGlobal, a worldwide association of independent Chartered accounting firms and business advisors.

SP Chopra’s main office is located at the district of the nation’s capital in India, Connaught Place and we have our branch offices in several cities in India and our international offices are located in Canada and Dubai seperatly.

PrimeGlobal member firms offer a powerful range of services and industry expertise to meet your needs – around the globe, around the clock. If you seeking accounting services such as tax advice or tax preparation, audit or internal audit services, corporate finance advisory, wealth management advisory, or any other service provided by a public accounting firm, SP Chopra & Co encourage you to review our site http://www.spchopra.com and learn more about the company and the services we offer.

SP Chopra Offers to our clients various services included: (All services will be hyper linked)

Statutory Audit including Reporting on Internal Financial Control (IFC),

Management and Internal Audit, IFRS Convergence and Reporting, Transaction support, Valuations, Due Diligence, Post Investment, Cash burn audit for Investors, Standard operation procedures (SOPS), Formation of an appropriate business, Obtaining Registration, Periodic Compliances, Assessment of Statutory Compliances, Tax Compliances, Routine Compliances Matters etc.

Disclaimer: “S.P. Chopra & Co. is an independent member firm of PrimeGlobal, a worldwide association of independent accounting firms and business advisors. PrimeGlobal does not and cannot offer any professional services to clients. Each independent member of PrimeGlobal is a separate firm and an independent legal entity. PrimeGlobal is not a partnership and independent member firms are not acting as agents of PrimeGlobal or other independent member firms.”

SP Chopra & Co

Assurance | Tax | Advisory
Doing Business in INDIAISO 9001:2015 & 14001:2015

Doing business in India

doing business in India

doing business in India

Doing business in India – the fastest growing economy in the world, the second-most popular country with over 1.33 billion people, the world’s largest democracy and the seventh-largest country by area.

World Bank Report on Ease Of Doing Business In India – the Indian economy will grow at 7.6 % in 2016-17, followed by further acceleration to 7.7 % in 2017-18 and 7.9 % in 2018-19. The new visionary political leadership, favorable demographics with over 50% of the population below the age of 24 years and 65% of the population below the age of 35 years and large educated workforce have further fueled this growth.

Doing business in India offers numerous opportunities for UAE, Canada, Australia companies. It should not be seen as one market, but a series of interconnected regional markets where the legislative and investment climate may change from one state to another.

SP Chopra would advised to obtain the current and detailed information from our experienced professionals for the companies are doing business in India, or have plan to do so. Countries may be UAE, Canada, Australia etc – large or small.

 SP Chopra guide will help you in doing business in India.

The key areas to consider are understanding the market, Doing Business in India serves as a guide to India’s business:

Specific Tax Concerns Related to Establishing a Company

Legal Issues Related to Establishing a Company in India

Cultural Concerns Related to Establishing A Company in India

Other Country-Specific Issues Related to Establishing A Company in India

Permanent Establishment in India | Branch or Subsidiary?

Tax And Accounting Obligations in India

Registration Formalities in India

Standard Legal Obligations and Formalities for a Branch in India

How to Hire My First Employee in India?

Design and Contents of an Employment Contract in India

Can Somebody do Business for Me and not be an Employee in India?

To facilitate the ‘Ease of Doing Business in India’, the Indian Government has taken significant measures on the taxation and the legal fronts by launching other initiatives like ‘Make in India’ and ‘Digital India.’

The Indian government has also taken up a series of measures to improve the ease of doing business in India by simplifying and rationalizing existing rules and using information technology to make the governance more efficient and effective.

India is set to climb up in Ease of doing business:

“I leave India with a profound admiration for the remarkable development gains this country has achieved in recent decades. India’s experience holds valuable lessons for the World Bank Group and for countries around the world”

Jim Yong Kim, World Bank Group President March 2013.

“The fundamentals of our country are very brilliant and I don’t see any reason why the great Indian story has lost so fast its sheen and the reason for the pessimism”

Indra Nooyi, Chairperson and Chief Executive, Pepsico, November 2013

“It is important to take a moment to remind ourselves of this country’s extraordinary achievements. Some are well known in the world at large — the emergence of a world-class IT industry, the rapid growth of exports and the development of a sophisticated financial sector. India has a strong voice in the global discussion of many key issues, including trade and climate change … These successes highlight the gradual process of reform India has undergone during these years of rapid growth. Regulatory changes have been significant… From abroad, India fits comfortably into the category of countries that  are doing well. Its growth is strong by advanced country standards …”

Naoyuki Shinohara, Deputy Managing Director, International Monetary Fund May 2013.

“Despite the current downturn, long-term prospects remain bright for India. India possesses the fundamentals to grow at sustained high rates over the next several decades”

Martin Rama, World Bank’s Chief Economist for the South Asia region April 2013.

“India’s biggest strength in the coming years is going to be her demographic dividend. More than 50% of our population is under 25 years and soon, one-fifth of the worlds working age population will be in our country”

Pranab Mukherjee, President of India while receiving the National Innovation Council’s Report to the People 2013 in November 2013.

“In the past two decades, the rate of growth more than doubled to an average rate of over 7% per annum and the Indian economy was put on an upward growth trajectory. Naturally, there will be periods of ups and downs. The economic cycle presents us years of high performance and years of modest performance. But the important thing to note is that highs are getting higher, and so are the lows”

Dr. Manmohan Singh, Prime Minister, India, at his address at the Hindustan Times Summit, 2013 in December 2013.

“India is already adding more than China to the world’s working-age population. Although this increment will lessen in the coming decades, India’s share of the global workforce will climb towards 30% by 2030 …”

Standard Chartered,  6 November 2013.

“FDI flows into India are Quite positive… think we can absorb – easily absorb – US $50b of FDI every year into India.

P. Chidambaram, Finance Minister, India April 2013.

Fundamental are still better than people believe, People are caught up in all the doom and gloom that surrounds India at the moment. But if we take a step back and do think about those fundamentals, then it seems to me that there are good reasons to believe that growth will be stronger in this current fiscal year than the last fiscal year. Fiscal policy, monsoon and the exchange rate are clearly more helpful”

–  Robert Prior-Wandesforde, Director, Asian Economics Research, Credit Suisse, September 2013.

Can Somebody do Business for Me and not be an Employee? – Doing Business in India

Doing Business in INDIA, Establishing Company in India, Uncategorized, Agent to Foreign Entity in India, Consultant in India, Contractual Worker in India, Outsourced Workers in India, Outsourcing of Services in India

Can Somebody do Business for Me and not be an Employee in India? – Doing Business in India

Yes, it is permitted in India for a person to work an entity and not being employee. These are the ways a person can be hired to work:

  1. Consultant / Contractual Worker: A person can be engaged directly act as a consultant or contractual worker for an organization without being an employee. Here liability for withholding taxes shall trigger above a particular threshold.
  2. As an Agent to Foreign Entity: A person can work as an agent of foreign entity. An agent does all acts on behalf of the principal, and the principal is bound by the acts of agent for which an authority is granted to the agent.
  3. Outsourced Workers: An entity can hire a manpower supply agency, which in turn will select workers based on requirement of entity and engage them with the business entity. These workers work under control and supervision of the business entity. Normally all the statutory compliances in this regard are taken care by the manpower supply agency; failing that, the entity shall be liable. Here the entity is responsible for the supervision and direction of such workers.
  4. Outsourcing of Services: Many services can be outsourced or done by freelancers. This work may include accounting, manufacturing, website design, marketing ,and public relations. Here the work responsibility also lies with the outsourced agency.

Design and Contents of an Employment Contract | Doing Business in India

Doing Business in INDIA, Establishing Company in India, Employment Contract in India

Design and Contents of an Employment Contract – Doing Business in India

The Employment contract is generally quite flexible and is made to cover the needs of an entity. It will generally cover the following salient features:

  1. Period of employment
  2. Areas of work and reporting responsibility
  3. Work location and working hours per week
  4. Compensation
  5. Vacation and leaves
  6. Compliance with Company Policies and Laws
  7. Confidentiality
  8. Non compete clause
  9. Termination and Notice period

How to Hire My First Employee? | Doing Business in India

Assessment of Statutory Compliances, Doing Business in INDIA, Establishing Company in India, Formation of an appropriate business, Periodic Compliances, Routine Compliances Matters, Compliance with Minimum Wages, employment visa in India, How to Hire My First Employee in India, Statutory Compliance

How to Hire My First Employee? – Doing Business in India

India has around 487 million workers, the second largest after China. Indian young workforce is growing rapidly and increasing energy in Indian Markets. Despite having second largest workforce in India manpower is economical.

Main Legal Steps to Follow to Hire A First Employee

Hiring first employee in India is an easy task in India.
A) For domestic employee, an entity is required to take care of two aspects only, which are as follow:

  1. Compliance with Minimum Wages, which is at present around USD $3,000 Per Annum.
  2. Compliance with provisions of withholding taxes applicable in India.

B. Hiring a Foreign resident is subject to fulfillment of certain conditions. Some of them are as follows:

  1. Employee is required to obtain an employment visa.
  2. Employment visas will not be granted for jobs for which qualified Indians are available. Employment visas will also not be granted for routine, ordinary, or secretarial / clerical jobs.
  3. Minimum Wages prescribed are USD $25,000 Per Annum.

Other Statutory Compliances
In India, labour laws related to social security of employees becomes effective when there are at least 10 employees in the entity. Some of the Labour laws applicable in India are as follows:

  1. Provident Fund (Social Security)
  2. Gratuity
  3. Employees State Insurance
  4. Professional Tax and
  5. Contribution to Labour Welfare funds etc.

Standard Legal Obligations and Formalities for a Branch | Doing Business in India

Doing Business in INDIA, Establishing Company in India, Formation of an appropriate business, Standard Legal Obligations, Formalities for a Branch in India, Monthly TDS returns, Standard Legal Obligations in India

Standard Legal Obligations and Formalities for a Branch – Doing Business in India

BRANCH OFFICE

A. Filings:

  1. Yearly filings include the filing of audited accounts of Branch Office, World Accounts with Registrar of Companies.
  2. Yearly submission of Activity Certificate with RBI and AD Bank.
  3. Annual return with the Income Tax Department.
  4. Filing of Quarterly / Monthly TDS returns, VAT, Service Tax Returns.

B. Other Legal Obligations/Provisions:

  1. The Branch Office will not accept any deposits in India
  2. The commission earned by the Branch Office from parties abroad for any agency business will be repatriated to India through normal banking channels.
  3. The Branch office shall not undertake any retail trading activity
  4. A Branch Office is not allowed to carry out manufacturing or processing activities in India, directly or indirectly.
  5. The Branch Office is not allowed to borrow locally unless the prior approval of RBI is given.

Registration Formalities | Doing Business in India

Doing Business in INDIA, Establishing Company in India, Obtaining Registration, Registration Formalities in India

Registration Formalities – Doing Business in India

Branch Office

(i) Parent company must have a profit making track record during the immediately preceding five years and net worth of not less than USD $100,000 or its equivalent.
(ii) Required to Obtain PAN / TAN, Service tax code, Shops and Establishment Act Registration, Importer Export Code, VAT, Registrar of Companies (ROC) Registration.
(iii) Normally registration is allowed for a period of three years.

Subsidiary

(i) A private company is required to be incorporated with a minimum authorized & paid up capital as may be prescribed and minimum two subscribers. No requirement of track record of parent company as shareholder.

(ii) Required to Obtain PAN / TAN, Service tax code, Shops and Establishment Act Registration, Importer Export Code, VAT.

(iii) Once registration is granted it can do business, until the company decides to close down its operations.

Tax And Accounting Obligations | Doing Business in India

Tax And Accounting Obligations in India, Dividend Distribution Tax, Income Tax, Professional Tax, Service Tax, SP Chopra Chartered Accountant in India, Subsidiary Company, Tax And Accounting Obligations in India, withholding taxes

Tax And Accounting Obligations – Doing Business in India

  1. A Subsidiary Company incorporated in India is subject to minimum base rate of tax @ 30.9% (In case of turnover below 5 Crore base rate will be 29.87%), , whereas a Branch office is liable to pay minimum base rate of tax @ 41.2%
  2. Dividends can be paid after payment of Dividend Distribution Tax @ 18.176% by a subsidiary, whereas dividend distribution is free for a branch office.
  3. Tax Obligations applicable are: Income Tax, withholding taxes, Service Tax, Professional Tax, custom duty etc. for branches as well as subsidiaries.
  4. Provisions of Transfer pricing are applicable for branches as well as subsidiaries.

5. Annual Accounts of Branches as well as subsidiaries are required to be audited by a Chartered Accountant of India.