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Finance Minister Nirmala Sitharaman: Industry Must Advance Up the Manufacturing Value Chain

Finance Minister Nirmala Sitharaman: Industry Must Advance Up the Manufacturing Value Chain

Addressing a session on “Co-Creating the Future Responsibly: The Role of Business” at CII’s Annual Business Summit in New Delhi, Dr. V Anantha Nageswaran, Chief Economic Advisor, Government of India, emphasized the need to increase the share of manufacturing in the economy.
“As India progresses from being the tenth largest to the fifth largest economy, aspirations rise along with such key milestones. It is important to recognize these aspirations and strive to meet them for a better standard of living,” he stated.
Dr. Nageswaran highlighted several key priorities for achieving developed nation status, including improvements in human resource development, which are critical for higher economic growth. He emphasized the importance of cities as ecosystems for attracting talent and fostering entrepreneurship, innovation, and creativity. Converting India’s Tier 2 and Tier 3 cities into engines of growth, improving learning outcomes, preparing the youth for AI adoption, and focusing on physical health were identified as key focus areas.
He stressed the creation of a vibrant small and medium enterprises sector, known as ‘Mittlestand’, and highlighted the importance of deregulation and lighter compliance burdens for MSMEs. Addressing factors of production such as land and labor markets and making power generation and distribution economically viable were also emphasized.
Dr. Nageswaran pointed out the need for dialogue and consensus building with stakeholders to implement next-generation reforms amidst challenges from geopolitical fragmentation and climate change. He emphasized the importance of macroeconomic stability, prudent and sustainable government finance, and improved credit ratings, especially given the high geopolitical risks.
He cautioned against taking the global environment for granted, citing risks such as geopolitical fragmentation, the impact of US fiscal policy and interest rates, China’s dominance in global manufacturing, and global financial stability. He stressed that the government cannot address these challenges alone and that private sector support is critical for societal advancement and a faster energy transition.
Dr. Nageswaran also stressed the importance of social responsibility in innovations, including AI’s impact. He reiterated that Corporate Social Responsibility is integral to corporate responsibility, and meaningful actions across all areas are crucial for responsibly co-creating the future. (ANI)

May 20, 2024
TGIF Agribusiness Makes Strong Debut on BSE SME Platform with 61% Premium

TGIF Agribusiness Makes Strong Debut on BSE SME Platform with 61% Premium

TGIF Agribusiness made its debut on the BSE SME platform on Wednesday with shares opening at Rs 150, representing a premium of 61% over the issue price of Rs 93 per share.
Prior to its listing, the company’s shares were trading at a premium of Rs 30 in the unlisted market.
The Initial Public Offering (IPO) consisted of a fresh equity issue of 6.87 lakh shares and was oversubscribed 37 times due to strong interest from investors.
The proceeds from the IPO will be utilized for purchasing agricultural equipment and irrigation systems, meeting working capital requirements, and for general corporate purposes.
TGIF Agribusiness primarily operates as a horticulture company engaged in open farming of fruits and vegetables across more than 110 acres of farmland in Ajari, Kasindra, and Kojra villages.
Pomegranate farming constitutes over 95% of the company’s revenue, supplemented by cultivation of dragon fruits, Sagwan trees, lemon, watermelon, and chilly in recent years.
The company employs various farming techniques to ensure high-quality produce, such as fruit thinning to enhance crop size and quality, vegetative growth practices, fruit protection measures, and soil moisture management.
The agriculture sector in India, boasting the world’s second-largest agricultural land, plays a pivotal role in employing nearly half of the country’s population, making farmers essential contributors to our sustenance.

May 16, 2024
The Uttar Pradesh government aims to attract investments of Rs 5,000 crore for the Defence Manufacturing

The Uttar Pradesh government aims to attract investments of Rs 5,000 crore for the Defence Manufacturing

The Union Environment Ministry has granted approval for the development of 60 hectares of land dedicated to the Uttar Pradesh Defence Industrial Corridor (UPDIC) in Chitrakoot.
According to the Expressway Industrial Development Authority (UPEIDA), this approval will facilitate projects worth Rs 5,000 crore, potentially creating 100,000 job opportunities in Chitrakoot.
A significant portion of Chitrakoot will be reserved as a greenbelt, and developers will incorporate modern measures for energy conservation, waste management, firefighting, and controlling noise, water, and air pollution. The UPDIC encompasses six nodes across Lucknow, Kanpur, Jhansi, Aligarh, Chitrakoot, and Agra districts.
“This corridor is crucial for advancing the ‘Make in UP’ initiative of the Yogi Adityanath government and contributing to India’s military self-reliance and exports,” said a government official. The corridor will focus on producing drones, helicopters, arms, and ammunition.
The state government has already approved defence manufacturing projects worth Rs 25,000 crore and signed 140 memorandums of understanding (MoUs) with both public and private companies. These MoUs include agreements with Adani Defence and Aerospace, BrahMos Aerospace, Ancor Research Labs, Tata Technologies, Bharat Dynamics Limited, Delta Combat Systems, SpiceJet Technic, Verivision, HAL, Gliders India, Defence Research & Development Organisation, Aerolloy Technologies, and others.
The Expressway Authority plans to acquire nearly 5,000 hectares for UPDIC, with about 1,700 hectares already acquired and allotted to investors. Additionally, approximately 1,000 hectares have been allocated to investors in Jhansi for developing a hub dedicated to arms and ammunition production and testing, with Bharat Dynamics as the lead investor in Jhansi.

May 16, 2024
SEBI Plans Stricter Rules for SME Public Offers Amid Market Surge

SEBI Plans Stricter Rules for SME Public Offers Amid Market Surge

India’s capital markets are on the brink of a regulatory overhaul as the Securities and Exchange Board of India (SEBI) prepares to tighten regulations governing public offerings by small and medium enterprises (SMEs). This initiative responds to increasing concerns over the misuse of a specialized listing platform introduced in 2012 to facilitate small businesses’ access to capital markets.
According to Reuters reports, SEBI is considering raising the minimum size requirement for such public offerings to between Rs 30 crore and Rs 50 crore ($3.59 million to $5.99 million). Sources from Reuters indicated that the proposed rules are expected to be officially issued later this year following consultations with stakeholders.
Currently, there is no prescribed minimum issue size for SMEs, although companies listing on the platform are required to have a post-issue capital base of Rs 25 crore. “Establishing a minimum offer size will ensure that serious companies access the capital markets, thereby protecting investor interests,” commented one of the sources. This initiative demonstrates regulators’ commitment to fortify investor protection mechanisms amidst increased activity in India’s equity markets.
Data from PRIME Database, a leading capital markets information provider, reveals a rise in public offerings by SMEs during the fiscal year ending March 2024. A total of 205 companies raised Rs 6,000 crore, marking an increase from the previous year’s 125 firms that raised Rs 2,200 crore.
Despite repeated requests for comments, both the markets regulator and exchanges, tasked with implementing regulatory policies, refrained from responding. The move to tighten regulations surrounding SME public offerings reflects a broader trend towards enhancing market integrity and investor confidence. By imposing stringent criteria for accessing capital markets, authorities aim to eliminate frivolous listings while fostering an environment conducive to sustainable growth.
In recent years, India’s SME segment has emerged as a vital engine of economic expansion, contributing to employment generation and fostering innovation. However, concerns regarding corporate governance standards and regulatory oversight have lingered, prompting regulators to recalibrate existing frameworks to align with evolving market dynamics.
Reports suggest that some SME issues were oversubscribed by 500 to 1000 times, raising concerns about the misuse of the listing platform. In response to these concerns, SEBI is considering imposing a minimum issue size for SMEs along with enhanced disclosure requirements. Companies eyeing public listings will be required to provide comprehensive disclosures, including the objectives of the issue, financials of the issuer, and associated risk factors.
“The merchant bankers will be tasked with providing more upfront disclosures, ensuring investors have the necessary information to make informed decisions,” remarked a source privy to the discussions.
SEBI’s proactive stance follows earlier remarks by its chairperson, Madhabi Puri Buch, who highlighted instances of misuse within the SME listing framework. Buch emphasized the regulator’s commitment to investigating complaints of price manipulation within the segment, stressing the need for heightened vigilance to maintain market integrity.
In a crackdown on malpractices, SEBI recently barred three SME companies from accessing capital markets, citing misuse of funds raised through public offerings, including diversion for unauthorized purposes, misrepresentation of facts in offer documents, and alleged manipulation of financial statements.
The regulatory clampdown underscores a broader push towards fortifying investor protection mechanisms and upholding market integrity. By establishing robust disclosure norms and imposing stringent penalties for non-compliance, SEBI aims to foster transparency and accountability within India’s SME space. As stakeholders anticipate the formal issuance of SEBI’s revised guidelines, market participants brace for a paradigm shift in the regulatory landscape, signaling a pivotal moment in India’s capital markets as authorities strive to balance promoting entrepreneurship with safeguarding investor interests.

May 15, 2024
AI Spending Trends in India: BFSI and Manufacturing Lead Investment

AI Spending Trends in India: BFSI and Manufacturing Lead Investment

Artificial Intelligence (AI) spending in India is poised to triple to $5 billion by 2027, with the banking, financial services, and insurance (BFSI) and manufacturing sectors emerging as top industry spenders, as per an Intel-IDC report released on Tuesday.
The report highlighted the BFSI sector’s transition from robotic process automation (RPA) to AI-driven automation, emphasizing areas such as security, productivity, and customer experience (CX). Advanced AI solutions incorporating behavioral analysis and fraud detection represent a shift towards more sophisticated and adaptable systems.
Sharath Srinivasamurthy, Associate Vice President at IDC, addressed the primary challenges hindering AI adoption in India, citing unclear or lower-than-expected business outcomes and compliance issues as the top concerns.
Additional challenges identified include skill shortages, high ownership costs that are difficult to justify, and process-related issues stemming from inadequate organizational support to coordinate cross-functional initiatives.
Santhosh Viswanathan, Vice President and Managing Director of Intel India Region, emphasized India’s readiness for AI adoption, citing the country’s role as a significant producer of global data and its position as the third-largest global market. He noted India’s leadership in technical skill availability on a global scale.
The IDC Asia/Pacific AI Maturity Study 2024 classifies India as an AI Practitioner (stage 2), with the country exhibiting strong potential in AI adoption. The report indicates that India’s performance aligns closely with the Asia/Pacific region average in the enterprise dimension, surpasses in the government dimension, and slightly lags in the socio-economic dimension.

May 15, 2024
Healthcare and Advanced Manufacturing Set for Major Investments in 2024

Healthcare and Advanced Manufacturing Set for Major Investments in 2024

New Delhi, May 14: Traditional sectors like healthcare and advanced manufacturing are poised to attract substantial investments in 2024. According to the India Private Equity Report by Bain and Company, a global management consulting firm, investors are showing strong support for established business models with significant long-term growth potential.
In 2023, sectors such as healthcare and advanced manufacturing demonstrated resilience and gained market share, with these sectors accounting for 75 percent of the total investments. Healthcare investments surged to a record high of USD 5.5 billion in 2023, driven by a threefold increase in deals compared to 2022. Major transactions involved multi-specialty hospitals, including Manipal Hospital’s significant growth of 2.7 times over FY2021-23 and acquisitions of Columbia Asia and Vikram Hospitals.
The report predicts robust deal activity in healthcare and advanced manufacturing across various sub-segments in 2024. Healthcare is expected to witness continued investment in multi-specialty and single-specialty hospitals, along with multiple-scale pharma and med-tech deals.
Most traditional sectors remained resilient as investors maintained interest in mature businesses with strong long-term growth prospects. Five megadeals in this segment attracted total investments exceeding USD 1 billion and included entities like Manipal Hospitals, Reliance Retail, HDFC Credila, Adani Power, and Avaada Group. The consumer retail, healthcare, and energy sectors experienced robust growth of over 10 percent driven by these investments.
Advanced manufacturing investments achieved a 20 percent compound annual growth rate (CAGR) over 2021-23, propelled by supply chain diversification, government incentives like the Production Linked Incentive scheme, and an influx of scale assets into the market. Significant investments were made in electric vehicle OEMs, with EV penetration increasing to over 6 percent in 2023 from 1 percent in 2019.
In 2024, increased investments are expected in packaging, electronics, and EV sectors within advanced manufacturing. Electronics manufacturing is expanding rapidly with government support, and EV penetration is on the rise in India.
However, investments in the IT/ITeS sector declined, with a 65 percent decrease due to elevated valuations and subdued demand in end markets. Similarly, investments in SaaS and new-age tech sectors declined by 60 percent as investors focused more on profitability and sustainable business models.
The fintech sector also experienced a decline in 2023 due to regulatory constraints, rising non-performing assets (NPAs) in small-ticket loans, and uncertainty regarding the path to profitability.
Consumer tech deal activity continued to decline as investors exercised caution and pulled back from large investments in businesses with unproven economics. (Agencies)

May 15, 2024
“MSME Delayed Payments: Updated Online Procedure for Filing Applications Against Defaulting Buyers”

MSME Delayed Payments: Updated Online Procedure for Filing Applications Against Defaulting Buyers

In response to delayed payments from buyers, MSMEs in India often encounter significant challenges. According to the government’s delayed payment monitoring portal, MSME Samadhaan, since October 2017, approximately 1.89 lakh applications involving Rs 43,160 crore have been filed by MSMEs. However, only 36,074 cases totaling Rs 6,235 crore have been resolved by facilitation councils.
For those seeking to file an application online against a buyer who has not settled dues within 45 days of invoice generation, follow these step-by-step instructions:
1. Visit the delayed payment filing and monitoring portal by the MSME ministry at samadhaan.msme.gov.in.
2. Click on the ‘Case Filing for Entrepreneur/MSE Units’ tab.
3. Choose the type of MSME registration — Udyog Aadhaar Number or Udyam Registration Number.
4. Enter the registration number, mobile number (as per the registration certificate), and verification code.
5. Click on ‘Validate Udyog Aadhaar’ or ‘Validate Udyam Registration’ based on your registration type.
6. Enter the OTP sent to the registered mobile number or email address for verification.
7. Access the ‘Application List’ page and click on ‘Application Entry’ located at the top right corner.
8. Input the date of the pending invoice under ‘The date of invoice in dispute’ and click ‘Submit.’
9. Your details will be pre-filled under ‘Petitioner Details’; provide any additional required information.
10. Select the business location from where the dispute has arisen.
11. Opt to send the application to the facilitation council of the state where your corporate office is located (‘Yes’).
12. Enter your office PAN and NIC code of the product sold.
13. Confirm the declaration at the end of the form.
14. Provide buyer or respondent details, including the GST number, and acknowledge the consent statement.
15. Specify the amount owed by the buyer.
16. Enter work order and invoice specifics and upload necessary documents.
17. Validate the information submitted, enter the verification code, and click ‘Final Submit.’
Both you and the buyer will receive notifications upon successful submission of the complaint.

May 14, 2024
OpenAI’s new search engine

OpenAI’s new search engine may change marketing

Open AI has been changing the way users browse the web. Imagine users asking questions in a natural way, just like they would a friend. OpenAI’s search engine might be built for this conversational approach, requiring marketers to adapt their content to sound natural and answer real user questions.
Excitement is building for OpenAI’s search engine, and it has the potential to disrupt the search landscape as we know it. However, some questions linger. Can OpenAI make money with this new service? And can it truly compete with the mighty Google? One thing’s for sure: the search engine world is a hotbed of innovation and fierce competition, and OpenAI’s arrival just adds another layer of intrigue.
Marketers might need to track new metrics to understand how users find and engage with their content in this new search landscape.
AI search engines might throw SEO for a loop These new search engines, unlike their traditional counterparts, may value different things. They could prioritize content written in a more conversational style, focus on new ranking signals we haven’t seen before, or even interpret what users are really looking for in a completely different way. Since AI can understand and create human-like text, content that directly answers users’ questions in a natural, conversational way might be the key to ranking highly.
OpenAI’s search engine could change the search game Google has been the undisputed king for ages, but if OpenAI takes off, it could shake things up big time. Marketers will need to ditch their “all eggs in one basket” approach and start spreading their SEO efforts across different platforms to stay competitive.
Overall, OpenAI Search presents both challenges and opportunities for marketers. Being adaptable and creative will be key to success in this evolving search landscape.

To learn more, read here: https://www.cmswire.com/digital-marketing/what-openai-search-would-mean-for-marketers/

May 10, 2024
What is AI doing to the environment?

AI is bad for the environment. But it can be better.

Barely a few years have passed, but it feels like we can’t live without AI anymore. Of course, AI has also had its fair share of criticism, but these seem to focus on its ethical and moral impact. Less light is shed on the environmental impact, which has been great indeed.

As AI models become more complex, more energy is required to train and run them. This results in greenhouse gas emissions that contribute to climate change. Researchers estimate that the amount of computing power required to train cutting-edge AI models has doubled every 3.4 months since 2012.
E-waste from AI hardware contains hazardous chemicals that can harm human health and the environment. The World Economic Forum projects that the total amount of e-waste generated will have surpassed 120 million metric tonnes by 2050. Proper e-waste management and recycling are essential to avoid environmental harm.
AI applications like driverless cars and delivery drones can pose a threat to animals and their habitats. The automation brought about by AI may also lead to increased consumption and waste in certain sectors. The use of AI in agriculture could result in the overuse of pesticides and fertilizers, harming biodiversity. AI systems used for environmental management can also be biased if trained on inaccurate or incomplete data.
Some companies prioritize financial gain over the environmental impact of AI technologies. The complexity of AI systems makes it difficult for users to understand their environmental footprint. To address this issue, more transparent procedures and regulations are needed to ensure that AI is developed and used in an environmentally responsible way.

The undeniable potential of AI cannot overshadow the environmental threats it poses. From its massive energy consumption to its contribution to e-waste and disruption of ecosystems, AI’s environmental impact necessitates immediate action. Transparency and responsible development are crucial to ensure AI becomes a tool for a sustainable future, not a detriment. There need to be work done to highlight these challenges and foster a dialogue that paves the way for AI advancements that coexist harmoniously with our planet.

Read more here:https://www.nytimes.com/2024/05/06/business/dealbook/ai-power-energy-climate.html

May 9, 2024
New MSME payment clause in IT Act

New MSME payment clause in IT Act

The Supreme Court declined to hear a petition filed by traders’ associations challenging the constitutionality of Section 43B(H) of the Income Tax Act, which mandates businesses to clear dues owed to micro, small, and medium enterprises (MSMEs) within 45 days to avail tax benefits.
Instead, a bench headed by Chief Justice DY Chandrachud advised the petitioners – Federation of All India Vyapar Mandal, Federation of Madras Merchants and Manufacturers Association, and Confederation of West Bengal Trade Associations – to seek relief from the high court.
The provision came into effect on April 1. The Federation of All India Vyapar Mandal challenged the constitutionality of Section 43B(H), highlighting its adverse impact on the business community, especially MSMEs like textile, chemical, and engineering units based in Gujarat.
The traders’ body sought a review of the provision due to its negative implications on MSMEs, arguing that it unfairly favors medium-scale industries by granting them more leeway in extending credit, thereby causing MSMEs to lose market share. Traders also alleged that the amendment unfairly penalized small enterprises by restricting their ability to offer credit based on their discretion.
The petition further pointed out that large companies were redirecting their orders away from MSMEs registered under the Micro, Small, and Medium Enterprises Development Act, 2006, opting instead to place them with unregistered entities to evade mandatory provisions and maintain longer payment cycles of 90-120 days.
To address working capital shortages and ensure timely payments within the sector, the Finance Act 2023 introduced an amendment to the Income Tax Act by adding clause (h) to Section 43B. This clause mandates that buyers settle outstanding payments owed to MSMEs within 45 days to qualify for tax deductions. Failure to comply results in disqualification from tax benefits until the dues are settled.
In cases of delayed payments to MSMEs, the buyer is liable to pay tax on the overdue amount, which can only be reversed upon clearing the dues to MSMEs. Additionally, interest on the overdue amount accrues at the bank rate notified by the Reserve Bank of India, applicable from the appointed day or an agreed date.

May 8, 2024