Dear BCAS Family,
When you get this message you would have been heaving a sigh of relief from the battle against the timeline for filing the income tax returns and the tax audit reports. Much needs to be talked about and put forward to the concerned authorities on the procedural issues that we all faced but at the start of this auspicious season of festivals, let us focus on some positives.
"It's not India's decade. I actually think it's India's century..." Let these words of Bob Sternfels, CEO, McKinsey & Co. reverberate in our minds, hearts and being, and inspire us! I was absolutely enthused when I read it, and I think all Indians should align and work towards building India, the great nation that we are. Bob ardently believes that India is where economic history is going to be written. India, he said is the future talent factory of the world - by 2047, India would have 20% of the world's working population. Manufacturing would also move to the next level with critical supply chains being reimagined. Digitisation is another pillar; he believes that will play a pivotal role in India's economy.
While the major economies of the world are staring at stagnant growth, spiralling inflation and looming recession, India is surging ahead. For the first quarter of the FY 2022-23, India's GDP growth rate was a phenomenal 13.5% - that's 2.8 times higher than the average GDP growth for the 20 largest economies. To accelerate the pace of development and enable India to keep striding confidently ahead, the government has regularly introduced a spectrum of focussed growth boosters. Make in India, Start-up India, Digital India, the Smart City Mission and the Atal Mission for Rejuvenation and Urban Transformation... are just some of the government’s flagship initiatives to strengthen the nation's economy.
India is certainly on a good wicket!
The government's concerted efforts to attract investments both from local and global sources are already paying rich dividends. With more than 100 unicorns valued at US$ 332.7 billion, India has the third-largest unicorn base in the world. India recognises almost 80 start-ups each day, that's the highest per date rate in the world. This achievement is the result of the government's foresight and diligence in implementing 'Ease of Doing Business' measures. Tax incentives, intellectual property rights and regulatory reforms are some of the key focus areas that have enabled corporate entities to take root and flourish. CMIE data on investments in new projects by the private sector for June 2022 has escalated 117% over the pre-Covid level.
Financial services are another benchmark that clearly defines the growth trajectory of the economy. It has notched a 9.2% increase in credit growth – with disbursal in FY 2023 close to Rs.6 trillion. Interestingly, MSME, which employs many people and retail loans have been the main drivers of this growth. Another key indicator of a vibrant economy is the growing momentum of cashless payments. The drive to encourage digital payments was initiated to curtail black money and corruption. This endeavour got a further impetus during the pandemic, which pushed many more to adopt digital transaction for personal safety. Unified Payment Interface registered a record 657 crore transactions in August, amounting to Rs. 10.7 lakh crore - reflecting the choice of a digitally empowered generation.
Manufacturing has been picking up momentum... in May 2022, the Index of Industrial Production (IIP) stood at 137.7 driven by mining, manufacturing and electricity sectors. This is fairly commendable when one factors in the devastating impact of the Ukraine war which severely disrupted global supply chains and sent commodity and energy prices steeply upwards.
Spiralling Tax Collections
With the decimating of the pandemic, India's economy has not merely revived but demonstrated impressive growth. Further ramping up India's economic surge are the concerted efforts and visionary policies of the proactive government. Business processes have been simplified and clearances streamlined, to encourage investment across all sectors. Technology has been effectively leveraged, to plug tax leakages. And the results have been quite astounding...
The gross collection of Direct Taxes for the FY 2022-23 stands at Rs. 8,36,225 crore compared to Rs. 6,42,287 crore in the preceding financial year, registering a growth of 30%. Advance Tax too has shot up, with collections for the FY 2022-23 at Rs. 2,95,308 crore as on 17.09.2022 resulting in a growth of 17%.
Also remarkable is the huge increase in the speed of processing of income tax returns, with almost 93% of the duly verified ITRs having been processed. Refunds amounting to Rs. 1,35,556 crore have been issued in the FY 2022-23, an increase of over 83% over the previous year.
GST collections have ascended 28% year-on-year to touch Rs. 1.44 lakh crore in August. This is the sixth consecutive month in which GST collections have stayed above the Rs.1.4 lakh crore mark. The stepped-up collection is a mirror of confidence in the government and the use of technology to nudge many more into contributing to nation-building.
Does this mean all is well in India and this is a story about India shining? Have we reached a point where we do not need to ponder over the areas where we need to better our record both as society and elected government? No way! In my humble opinion in our haste to seizing economic opportunities, we are overlooking social ills and disparities. No government can function effectively without the active contribution by its subjects. Are we participating in the initiatives of disseminating education to underprivileged of almost 50 crore people? Are we helping in any way people to get water and other basic necessities? Our record as citizens is far from encouraging on these issues. Hence, consequential inequality is increasing alarmingly and needs to be addressed urgently.
At the government level there seems to be a perception that for every aberration noticed in the economy, a tightened hold of bureaucracy and further compliances would cure the malaise and resolve the issue. This has resulted in an uncanny situation where on one hand "Ease of Doing Business" is getting priority in government policy; while on the other hand the increasing bureaucratic compliances is becoming an antithesis to the idea. Let us hope that we as nation will overcome these hurdles.
Let me have the pleasure to give you all a little update on some important developments and events.
ICAI announced Audit Quality Maturity Model (AQMM) will become mandatory for certain audit firms to self-assess their audit quality maturity from next financial year. This indeed is a welcome step. At BCAS we had some very interesting events organized. Seminar on Charitable Trusts, Workshop on Process Automation under GST, Felicitation of newly qualified CAs, and Workshop on IA were truly appreciated by the participants. A Workshop on DSC Management is being organized on the 8th October by the Technology Committee. There are many more interesting events being planned in the coming months. May I request you to keep tab on the announcements?
And before I sign off, let me wish You and Your Families a very Happy Navratri and Diwali. Let the light of knowledge kindle our lives with unending bliss and happiness.
With Best Regards,
CA Mihir Sheth
Please feel free to write to me at firstname.lastname@example.org