The officials at NTC found that drone survey mapping its land assets very efficient and effective, and they would continue to monitor the land assets across India using drone surveys to protect their land from any kind of encroachments in the future. On July 8, Piyush Goyal took charge of the Ministry of Textiles and started reviewing the functioning and performance of the textile sector. During the review meetings of National Textile Corporation Ltd., the largest CPSU under the Ministry of Textiles, the minister suggested that NTC should adopt the latest methods and technology to ensure the safety of its land against encroachments. Goyal suggested using drones to survey NTC mills to protect and monitor the land of the CPSU periodically. Such surveillance would enable NTC to take swift action against the encroachments at the initial stages, making it easier to remove them from the properties owned by the government-owned company. There is always a risk involved in traditional ways of conducting surveys on the properties via CCTVs and manual intervention. CCTVs are prone to theft and breakage, while manual intervention can attract unwanted confrontation with the encroachers without sufficient protection from the police. On the other hand, drone surveying is an easier, economical and more efficient way of surveying and mapping a piece of land. In such surveillance, there is no need for manual intervention as drones can be operated from a distance. Additionally, the feed can be directed to software for quick analysis of the land. Surveying land from different heights and various camera angles give a better perspective of the situation based on the layout of the land. Compared to other methods to survey the land from the sky, including satellites and helicopters, drones have the capacity to fly at lower altitudes and capture high-resolution images at an economical price. Also, the time consumed in the conventional method of land surveying is much more compared to drone-based surveying. In conventional methods carrying equipment from one location to another require manpower, but in drone surveying, only one or two operation in-charge can handle a complete budget-friendly survey of the location with high accuracy.
Pilot drone survey
Based on the directions provided by Minister Piyush Goyal, NTC conducted a pilot drone survey and extracted land mapping of five mills at various locations, including Somasundaram Mills and Kaleeswara Mills situated in the Southern Region and JAM Mills, Finlay Mills and Digvijay Mills in the Western Region. The previous maps and images available in NTC records were used to compare the new maps to assess any encroachments or undesired changes. The officials at NTC found that drone survey mapping its land assets very efficient and effective, and they would continue to monitor the land assets across India using drone surveys to protect their land from any kind of encroachments in the future.
Source: Opindia
Emergency Credit Line Guarantee Scheme (ECLGS) is under the operational domain of Ministry of Finance, Department of Financial Services (DFS). As informed by DFS, as on 2.07.2021, guarantees have been issued for loan granted to around 1.09 crore Micro, Small and Medium Enterprises (MSMEs). ECLGS being a demand driven scheme, sanctions/disbursements are made by lending institutions based on assessment of borrower’s requirement and their eligibility. The eligibility criteria for availing credit under ECLGS are:
As on 2.07.2021 an amount of Rs.2.73 lakh crore have been sanctioned under the scheme of which an amount of Rs.2.14 lakh crore has been disbursed. The scheme was designed to support existing borrowers meet the liquidity crisis due to Covid-19 pandemic. Ministry of MSME has launched Credit Guarantee Scheme for Subordinate Debt (CGSSD) to extend financial assistance to stressed MSMEs including NPA accounts. The credit needs of the first time bowers belonging to the Micro and Small Enterprises are catered to by the Credit Guarantee Scheme for Micro and Small Enterprises. This information was given by Minister for Micro. Small and Medium Enterprises Shri Narayan Rane in a written reply in the Rajya Sabha today.
Source: PIB
The new Bill seeks to allow all non-banking financial companies (NBFCs), instead of a select few, to engage in factoring business – a move that could help improve the cash flow to Covid-hit micro, small and medium businesses (MSMEs). The proposed amendments to the factoring law, which seek to widen the participation of financiers in factoring business, relax restrictive provisions and empower the central bank to bolster norms for better oversight of the $6-billion market, could be taken up for approval in the Lok Sabha on Tuesday. Finance minister Nirmala Sitharaman was earlier scheduled to move the Factoring Regulation (Amendment) Bill, 2020, for clearance by the Lok Sabha on Monday. But the lower House was adjourned early on Monday, as its proceedings were frequently disrupted by Opposition parties. The new Bill seeks to allow all non-banking financial companies (NBFCs), instead of a select few, to engage in factoring business – a move that could help improve the cash flow to Covid-hit micro, small and medium businesses (MSMEs). Factoring is essentially a transaction where an entity (like MSME) sells its receivables (dues from a customer) to a third party (a ‘factor’ like a bank or NBFC) for immediate funds. It often helps a firm satiate its immediate working capital requirement. Under the extant law, to engage in regular factoring business, an NBFC’s financial assets in the factoring business and income from it should both be more than 50% of its gross www.citiindia.com 5 CITI-NEWS LETTER assets and net income or greater than a threshold, as notified by the Reserve Bank of India (RBI). The new Bill removes this threshold, making it easier for NBFCs to engage in factoring business. Many MSMEs, whose payments against supplies are stuck, participate in the factoring business with receivables. Despite growth in recent years, the factoring market accounts for only 0.2% of India’s GDP, way behind comparable developing economies such as Brazil (4.1%) and China (3.2%), according to a report of the parliamentary standing committee on finance, which reviewed the Bill and endorsed the amendments. Mature factoring markets, more specifically Europe, continue to dominate the factoring market, accounting for 68% of global factoring. The factoring market worldwide is projected to reach $9.2 trillion by 2025. In India, the factoring credit makes up for only 2.6% of total formal MSME loans in India, way below 11.2% in China. Moreover, only 10% of the total receivable market is currently covered under formal bill discounting mechanism, while the rest under conventional cash, credit/overdraft arrangements with banks. As one of the principal instruments of working capital and trade finance, bill discounting and factoring remains underutilised. The factoring Bill will empower the RBI to make regulations in respect of matters relating to the manner of granting certificate of registration, filing of particulars of transactions with the Central Registry on behalf of factors; and any other matter that is required to be specified by regulations. It also seeks to amend the definitions of “assignment”, “factoring business” and “receivables”, to bring them in sync with international definitions and also to insert a new definition of “Trade Receivables Discounting System”. The Factoring Regulation (Amendment) Bill, 2020, was introduced in the Lok Sabha by finance minister Nirmala Sitharaman on September 14 last year. Later that month, the Lok Sabha speaker referred the Bill to the Parliamentary standing committee for examination. The panel, in its report submitted in February, stressed the need for the RBI to build sufficient regulatory resources to ensure effective supervision of factoring activities now that a large number of players may take part in such businesses with the implementation of the new norms. Factoring activities in India include invoice discounting, recourse and non-recourse factoring, collections and reverse factoring. However, international factoring includes a much wider spectrum of activities like export factoring, import factoring, export invoice discounting and reverse factoring.
Source: Financial Express
Pradhan Mantri Kaushal Vikas Yojana (PMKVY) is the flagship skill training scheme of the Ministry of Skill Development and Entrepreneurship (MSDE). Under PMKVY 2.0 (2016-2020), a target to train one crore individuals was set. The number of candidates trained is 1.09 crore. Under PMKVY 3.0 (2020-2022), which was launched on 15.01.2021, a target to train 8 lakh individuals has been set. The number of candidates trained so far is 1.2 lakh. MSDE, vide notification dated 5th December 2018, has set up National Council for Vocational Education and Training (NCVET) as an overarching regulatory body for the skill eco-system. It is mandated to regulate the functioning of entities engaged in vocational education and training, both long and short-term, and establish minimum standards for the functioning of such entities. Under PMKVY scheme, various initiatives are taken to ensure better placement outcomes for the trained/ certified candidates. Rojgar Melas are conducted for placement of youth by industry. MSDE has launched Aatmanirbhar Skilled Employees Employer Mapping (ASEEM) portal, which acts as a directory of skilled workforce. The objective is to provide a platform that matches supply of skilled workforce with the market demand, thereby facilitating better livelihood opportunities for youth and availability of ready skilled manpower to employers. This information was given by Union Minister for Skill Development & Entrepreneurship, Shri Dharmendra Pradhan in a written reply in Lok Sabha today.
Source: PIB
India Inc has reported a doubling of profit after tax in FY21 despite a 5% dip in the top line on the back of a lower tax rate and a sharp drop in interest costs. A report by SBI’s economic research department said that around 4,000 listed entities reported a 5% decline in the top line, but their ebitda (earnings before interest, depreciation, taxes and amortisation) rose 24% while their profit after tax jumped by 105%. “Most importantly, 15 sectors have now reduced loan funds by around Rs 2.1 lakh crore during pandemic year FY21. Sectors such as refineries, steel, fertilisers, textiles, mining, etc, have reduced their loan funds in the range of 6% to 64% in FY21,” the report said. According to the report, the reduction in the effective tax rate (ETR) in FY20, coupled with a prolonged period of a low-interest rate regime fuelled by the coronavirus seems to have been a blessing in disguise for India Inc during the pandemic year. Last year, the government reduced the ETR for companies to 26% from 35% in FY20. However, the actual tax paid increased by more than Rs 50,000 crore. Many sectors including engineering, realty, automobiles and trading had reported an ETR reduction in the range of 1-24% in FY21 as compared to FY20. Despite this, tax collections in FY22 were at record highs. Sectors like cement, tyres and consumer durables showed significant contribution of even over 50%, the report said. An extended period of low interest rate has also helped companies in massive deleveraging and contributed on an average 5% to the overall top line. Sectors like consumer durables, healthcare and cement have benefited the most. In terms of expenditure reduction, the overall contribution on top line has been as much as 31%. Sectors like apparel and refineries have cut costs by as much as 107% on average. While financing costs came down, the increase in commodity prices pushed up expenditure in sectors like metals and agrochemicals. Employee costs on average have been cut by 3% in FY21. The maximum cut in employee costs has been in sectors facing the consumers. According to SBI, the improved tax collections will widen the gap between gross domestic product and gross value added as GDP growth would be buoyed by the improved tax collection. The report said that an extended period of accommodative policy, as hinted by the RBI, augurs well for better corporate results.
Source: Times Of India
More than 17,200 new companies were set up in the country during April to June this year while a total of 13.7 lakh companies were active at the end of June, according to official data. Minister of State for Corporate Affairs Rao Inderjit Singh told the Lok Sabha on Monday that incorporation of new companies and closure thereof is a routine affair depending upon the objectives of incorporating the company on a case-to-case basis. "The number of new companies incorporated in the country under the provisions of the Companies Act, 2013 from April 2021 to June, 2021 is 36,191 as compared to 18,968 number of new companies in the corresponding period of last year," Singh, who took charge as the MoS at the ministry earlier this month, said in a written reply. There was an increase of 17,223 new companies compared to the year ago. The minister's reply was to a query on whether the second wave of coronavirus pandemic has adversely impacted the economic conditions of the companies in the country. meetings through video conferencing or other audio-visual means. As per data with the ministry, there were a total of 21,87,026 registered companies till June 30 this year. Out of them, 13,76,366 companies were active and remaining 8,10,660 were not active due to various reasons like liquidated/ dissolved, amalgamated/ merged with other companies, struck-off and converted to Limited Liability Partnership (LLP). In 2020-21, as many as 14,674 companies were closed down, while the number stood at 70,972 in 2019-20. A total of 1,43,223 companies were shuttered in 2018-19. There is no verifiable information which says that the closure of company is due to lack of business acumen," the minister said in another written reply. He was responding to a query on whether want of business acumen is also a reason for closure of companies. According to a separate written reply, 80,270 independent directors were appointed by companies in the last three financial years. "Appointment of independent directors is a continuous process. Whenever, the posts of the independent directors fall vacant the respective companies are required to comply with the provisions of Companies Act, 2013," Singh said. In another written reply, the minister said the separation of post of chairperson from MD/CEO "is considered to enhance corporate governance, therefore, apprehension that it would weaken the position of promoters is misplaced". He was responding to a question about the measures likely to be taken by the government to address the apprehension in some quarters of corporate world that this arrangement would weaken the position of promoters. Under Regulation 17(1B) of Sebi (Listing Obligations and Disclosure Requirements), Regulations, 2015, the top 500 listed entities by market capitalisation are required to comply with the requirement of separation of the roles of chairperson of the board and MD/ CEO with effect from April 1, 2022.
Source: Economic Times
If MSMEs combine business acumen with efficient technology, they can optimise the use of their time, money and resources, and ensure rapid growth India is a country of small businesses. Almost every lane and bylane in our country boasts of at least one micro-enterprise. India’s MSMEs are present in every sector; some are custodians of traditional crafts like handloom textiles and others are manufacturers of cutting-edge machine components, which ensure that India’s large businesses in sectors like automobile and aerospace run smoothly. They are responsible for 31 per cent of India’s GDP and employ about 120 million Indians. However, it is disheartening to see that India’s MSMEs are losing out, as most are yet to adopt technology and run their businesses in a meaningful manner. According to a survey, only 5-6 per cent of MSMEs have fully adopted technology to run their business. If MSMEs enable their business acumen with efficient technology, they can optimise the use of their time, money and resources, and ensure rapid growth. Here are the top myths about technology among MSMEs:
Myth 1 — Only large companies need tech: Every company, however small, can benefit from technology. The size of the business, number of employees, type of product or service, product and service verticals, and other such parameters will dictate the extent of tech requirement. For instance, a microenterprise might only need bookkeeping software, beyond communication tools, while a small or mid-size company could need CRM and ERP tools as well. Technology can help streamline operations, bring in automation, even if at a basic level, and make the business more efficient, no matter what the size of the company is.
Myth 2 — Tech is an expense, not an investment: Companies mistake technology as an expense. This just isn’t true. If the right choice is made, tech is an investment with visible and trackable RoI (return on investment). The reason many small businesses consider tech as an expense or cost is because they have ended up using piecemeal tools from multiple vendors for various needs and the different software do not communicate with one another and they also do not scale with the company. Software offered by tech-based B2B companies allows businesses to get access to end-toend business process solutions that unlock new features when a business scales to the next stage of growth. Such software is a long-term investment. This shift in view — from expense to investment—will change the way small business owners make their tech decisions.
Myth 3 — Tech will replace humans: While some small business owners believe that they do not need tech, there is a set of other owners who believe tech will solve all their problems instantly and are disappointed when this is not the case. While the right tech tools can solve many challenges a business faces, human intervention, especially in decision making, will be required. To give a simple example, a tech platform can help automate processes like bank reconciliation. The objective for the automation is to tally the statements maintained by the company and the bank, but human intervention is still required to fix the differences. The truth lies in the fact that tech can do a lot, but it still requires human inputs and supervision.
Myth 4 — Tech needs skilled staff: It is understandable that a layman gets intimidated by technology, as many equate tech with advanced tech tools. The point of Software-as-aService (SaaS) solutions is to keep the complex algorithms behind the ‘curtains’ and the user gets an easy-to-use, intuitive platform that does not require any specific technical training. Think of how you learn to use popular apps like WhatsApp. We discovered features on the go with simple prompts from the app. SaaS tools offered by third-party platforms go a step further. For instance, a person with limited accounting knowledge can capture the financial data without understanding the accounting concepts like credit and debit and still generate the P&L statement. Good technology solutions that have been built keeping the end-user in mind does not require heavy technology training.
Myth 5 — Tech is a one-time affair: While SaaS has made tech implementation easy, it does not mean business owners can invest in one tech tool and then forget about it; since businesses are constantly growing and evolving, so are the needs of the enterprise. While, as a micro enterprise you might only need bookkeeping software, as you grow you will need to add on sales management, marketing and ERP tools. However, it does make sense to invest in a solution that unlocks additional features as required. With the right platform, a micro enterprise can opt for a handful of features initially and as it scales more features can be added based on requirements. Technology has made our lives easier, small businesses should also allow technology to make doing business easier.
Source: The Hindu Businessline
India's Grasim Industries recently incorporated a joint venture (JV) company, Birla Advanced Knits, for manufacturing man-made cellulose fibre knitted fabrics in partnership with Century Textiles and Industries (CTIL). Both will hold 50 per cent each of the new company and will have the right to nominate three directors each on the board of JV. Both the companies informed the Bombay Stock Exchange about this development. Grasim Industries produces viscose staple fibre, Chlor-alkali, linen and insulators. Through its subsidiaries, UltraTech Cement and Aditya Birla Capital, it is also India's largest cement producer and a leading diversified financial services player. CTIL has interests in diverse industries, including cotton textile, pulp and paper and real estate.
Source: Fibre2Fashion
However, the third wave of Covid-19 remained a key risk to economic recovery with a slowing vaccination pace and increased mobility in July, the firm said in a note on Monday. However, the third wave of Covid-19 remained a key risk to economic recovery with a slowing vaccination pace and increased mobility in July, the firm said in a note on Monday. Business activity in India witnessed a gradual V-shaped recovery in June from the low seen in May, based on data released so far, according to brokerage firm Nomura. However, the third wave of Covid-19 remained a key risk to economic recovery with a slowing vaccination pace and increased mobility in July, the firm said in a note on Monday. The Nomura India Business Resumption Index (NIBRI), which tracked high frequency indicators such as mobility indices and power consumption, accelerated to 96.4 for the week ended July 18, from 94.9 the previous week. “The first flush of conventional monthly data for June suggest a gradual V-shaped recovery from the nadir in May,” said Nomura economists Sonal Varma and Aurodeep Nandi, in the note. Mobility indicators such as Google’s workplace and retail and recreation mobility indices continued to rise 2.4 percentage points (pp) and 5.1pp week-on-week, respectively. Meanwhile, India’s Vaccination pace slowed marginally to 3.6 million doses per day in July from 3.8 million in June, it said. “With mobility continuing to pick up through July and broader vaccination coverage still a quarter away, the key risk to India’s growth recovery is the threat of a third wave during this period,” Nomura said.
Source: Economic Times
The exports of textile commodities witnessed an increase of 22.94 percent during the fiscal year 2020-21 as compared to the corresponding period of last year and surged by 73.08 percent on year-on-year basis. Textile exports were recorded at $15400.142 million in July-June (2020-21) against the exports of $12526.537 million in July-June (2019-20), showing growth of 22.94 percent, according to latest data of Pakistan Bureau of Statistics (PBS) released here Monday. The textile commodities that contributed in trade growth included knitwear, exports of which increased from $2794.363 million last year to $3816.156 million during the fiscal year under review, showing growth of 36.57 percent. Likewise, the exports of yarn other than cotton yarn increased by 29.62 percent, from $25.743 million to $33.369 million whereas, exports of bed wear increased by 28.87 percent from $2150.833 million to $2771.789 million. The exports of towels increased by 31.81 percent, from $711.265 million to $937.536 million; exports of tents, canvas and tarpaulin grew by 12.10 percent, from $98.472 million to $110.387 million; readymade garments by 18.83 percent, from $2552.246 million to $3032.800 million; made-up articles, excluding towels and bead-wear by 28.08 percent, from $590.507 million to $756.35 million while the exports of art, silk and synthetic textile increased from $314.772 to $370.421 million, showing growth of 17.68 percent, cotton (carded or combed) by 3.17 percent, from $0.063 million to $0.065. The exports of cotton cloth also increased by 4.98 percent, from $1829.901 million to $1921.001 million. Meanwhile, the commodities that witnessed negative growth in trade included raw cotton, exports of which decreased by 95.27 percent, from $17.002 million to $0.804 million. The exports of all other textile materials also increased by 38.56 percent, from $456.469 million to $632.495 million, the PBS data revealed. Meanwhile, on year-on-year basis, the textile exports increased by 73.08 percent during the month of June 2021 as compared to the same month of last year. The exports during June 2021 were recorded at $1660.040 million against the exports of $959.137 million during June 2020. On month-on-month basis, the exports from the country also rose by 57.81 percent during June 2021 when compared to the exports of $1051.933 million in May 2021.
Source: Daily Times
Ermenegildo Zegna Group, a world-renowned Italian luxury house, and Investindustrial Acquisition Corp (IIAC), a special purpose acquisition corporation sponsored by investment subsidiaries of Investindustrial VII L.P., have announced a business agreement that is expected to make Zegna a public company listed on the New York Stock Exchange later this year. Upon closing of the transaction, which is expected to occur in the fourth quarter of this year subject to customary approvals and conditions and to IIAC’s shareholders’ vote, the Zegna family will continue to control the Company with a stake of approximately 62 per cent. Based on the transaction value, the merged entity will have an anticipated initial enterprise value of $3.2 billion with an expected market capitalisation of $2.5 billion. “Over 111 years ago, my grandfather and namesake founded Zegna with the belief that caring for both the natural environment and for people was the bedrock for creating the finest textiles and a successful brand. Since then, we have proudly followed in his footsteps to become one of Italy’s true luxury houses. Today’s announcement underscores the success of our strategy of continuously focusing on the Group’s brand equity while also continuing to build upon our heritage, our ethos of sustainability, and the unique craftsmanship that has made our name synonymous with quality and luxury around the world. The Zegna family will remain at the company’s helm following the transaction’s completion, and we will continue to invest in creativity, innovation, talent, and technology in order to sustain Zegna’s leadership position in the global luxury market,” said Zegna Group CEO Ermenegildo “Gildo” Zegna. Since its founding in 1910 by the Company’s namesake, Ermenegildo Zegna, the Group has evolved from a producer of textiles and menswear into a leading purveyor of luxury goods to clients around the globe. While the Zegna brand remains the Group’s flagship label and an emblem of Italian excellence, in 2018 Zegna acquired the majority stake in American luxury fashion brand Thom Browne. Zegna’s management has capitalised on the unique strengths of Thom Browne, namely its consistency and name recognition, its younger customer base, its high digital penetration, and its iconic collections, doubling Thom Browne’s revenues since 2018 as a result. Over the past years, Zegna has strengthened its one-of-a-kind Made in Italy luxury textile laboratory platform through the acquisition of Italian textile manufacturers. The platform is a key competitive advantage alongside the Group’s ready-to-wear and Made-toMeasure offerings. It is the provider of choice for some of the world’s most highly regarded luxury names while also supplying the finest materials to the Group’s own brands, the company said on its website. As of December 31, 2020, the Group has a presence in 80 countries through 296 directly operated stores, and this year, the Group expects annual sales to approach those of 2019. In 1991, Zegna was the first luxury menswear brand to open in China, and Greater China accounted for 35 per cent of the company’s apparel, accessories and textile revenues in 2019. Also importantly, Zegna has expanded its leadership in the luxury leisurewear segment, growing this category from 38 per cent of sales in 2016 to over 50 per cent in 2021 yearto-date, all while maintaining its leadership position in the heritage formalwear segment.
Source: Fibre2Fashion
The European Union has launched a legal challenge at the World Trade Organization against Russian measures it says restrict or prevent EU companies from selling goods to Russian state-owned enterprises. “These practices seem to be contrary to WTO rules, which require that Russia may not discriminate against foreign companies in this area,” the European Commission, the EU’s executive body, said in a statement on Monday. The first step in a WTO dispute is a period of consultations, typically of 60 days, before an adjudicating panel can be chosen. The Commission, which oversees trade for the 27-member EU, said Russia had gradually expanded its policy of restrictions to replace foreign goods and services in procurement contracts since 2015. The Commission said the challenge centred on three specific Russian measures it says are incompatible with WTO law requiring members to treat foreign and domestic producers in a non-discriminatory way. It said certain state-related entities deduct 15% from the price offered by Russian companies when assessing bids, although do not actually benefit from any such deduction. In addiiton, Russian firms wanting to procure certain engineering products abroad need authorisation, the Commission said. It also complained about national quota requirements of up to 90% in the procurement of about 250 products, including vehicles and textiles.
Source: Reuters
