Modi cuts red tape for small businesses in India
Modi cuts red tape for small businesses in India
Modi, in a rare acknowledgment that economic sentiment had turned negative, this week defended his handling of the economy, which in the June quarter grew at an annual 5.7 percent, its slowest rate in three years.
Small and medium-sized enterprises, crucial to Modi’s plans to create millions of more jobs, have been hurt by a massive tax overhaul launched in July that added layers of extra bureaucracy for firms and hit exports.
Finance Minister Arun Jaitley will on Friday chair a meeting of the council for the Goods and Services Tax (GST), a landmark reform which turned India’s 29 states into a single customs union for the first time.
Officials with knowledge of the meeting and industry bodies said they expected the government to simplify the filing of tax returns under GST to ease the burden on smaller businesses.
Many companies also want the government to increase the size of turnover imposed before they must start filing returns.
“We are not in a denial mode that there is a problem in the SME (small and medium enterprises) sector,” said a senior lawmaker who has been working with Modi’s office to combat the economic slowdown.
Ajay Sahai, head of the Federation of Indian Export Organization, said he expected the government to allow its 25,000 small and medium-sized members to file tax returns quarterly.
“The drill to file returns every month is exhausting,” he said.
While a mountain of bad loans has crimped bank lending to India’s bigger companies, smaller firms have been hurt by a government move last November to stamp out “black money” — untaxed cash that oils many industries — and by GST, whose complex structure has baffled companies down the supply chain.
“Informal sources of working capital (for smaller firms) has dried up,” said Anil Bhardwaj at the Federation of Indian Micro and Small and Medium Enterprises.
He predicted that it would be another year before GST began to have a positive impact on smaller companies.
Jaitley has promised steps to boost economic growth back above 7 percent and toward the levels economists say India requires to generate employment for the one million entering the workforce every month.
Modi built a reputation as an economic reformer capable of delivering jobs and wealth for an increasingly aspirational population, but slowing growth will be near the top of voter concerns in upcoming state elections.
Investment remains low. The government has hiked spending on infrastructure, but private investment has remained muted.
“It is not easy because our banking system is in deep trouble and private investment is not picking up,” the lawmaker said. “The government will have to recast all policies that will activate the public sector.”
China, UAE strike 13 landmark deals
- Among the projects agreed in the memorandums of understanding are the building of embassies and cultural centers
- China also won approval to open the first Chinese state-owned financial services firm in Abu Dhabi’s AGDM financial center
LONDON: The UAE and China have signed 13 wide-ranging agreements to advance trade and commercial ties between the two countries.
Among the projects agreed in the memorandums of understanding are building embassies and cultural centers, increasing cooperation in the energy, agriculture and e-commerce sectors, building a wholesale market for livestock, fisheries and farm produce and investing in the world’s largest solar energy project.
China also won approval for the first Chinese state-owned financial services firm to be opened in Abu Dhabi’s AGDM financial center, according to the UAE state news agency WAM.
The agreements were ratified during the visit of President Xi Jinping, the first president of China to visit the UAE is 29 years. The top-level visit, in which he had talks with Mohammed bin Zayed, crown prince of Abu Dhabi, and Sheikh Mohammed bin Rashid, vice president of the UAE and ruler of Dubai, is a clear indication of the importance China attaches to relations between the two countries.
China is the UAE’s second largest trading partner. About 60 percent of China’s exports to the Middle East enter the region via the UAE, which itself accounts for about 25 percent of China’s trade with all the Arab world.
The UAE is also close to the route of China’s Belt and Road initiative. The multibillion-dollar project aims to revive the ancient Silk Road and develop an equivalent sea route linking China to markets in west Asia and Europe.
More than a million Chinese visited the UAE in 2017 and trade reached nearly $54.5 billion that year. On Thursday, Sheikh Mohammed bin Rashid tweeted that the UAE aims to double both of those numbers.
“We have many areas of political and economic agreements and a solid base of projects in the energy, technology and infrastructure sectors. More importantly (we have) a strong political will to start a greater phase of cooperators ad integrations,” the ruler of Dubai wrote on Twitter.
“Today, we have exemplary relations with China and a Chinese leadership that sees the UAE as main strategic partner in the region.”
President Xi arrived in Abu Dhabi on Thursday for a three-day visit. On the same day, the state-owned Abu Dhabi National Oil Company (ADNOC) announced the awarding of two contracts worth $1.6 billion to BGP Inc., a subsidiary of China National Petroleum Company, to conduct a seismic survey, searching for oil and gas sites both offshore and on an area covering some 53,000 square kilometers.
Dubai-based property developer Emaar meanwhile announced plans to build the largest Chinatown in the Middle East in the UAE.
After his three days in the UAE, President Xi will go on to Senegal, Rwanda and South Africa.