According to a media report, the government is developing voluntary rules of ethics and conduct for businesses to adhere to while using generative AI or artificial intelligence (AI).
According to an official, the ethics and conduct guidelines created by the Ministry of Electronics and Information Technology will resemble “informal directive principles” for businesses, particularly those developing large language models (LLMs) or utilising data to train artificial intelligence (AI) and machine learning models. AI legislation is still a ways off. “We are currently trying to get the industry on board with a common set of principles and guidelines and are talking to all stakeholders to see what can be included,” the official stated.
Sharing he thoughts on the move, Sakshi Shah, Founder of GoodLives stated, “The effort by the Indian government to create voluntary rules of conduct for AI companies is a praiseworthy step in striking a balance between responsibility and innovation. As the founder of GoodLives, a platform for holistic wellness powered by AI, I am aware of how revolutionary AI may be, particularly in fields like mental health and general wellbeing. But enormous power also carries a great deal of responsibility.”
“Although artificial intelligence (AI) has the potential to completely transform businesses, if ethical standards are not followed, it may have unforeseen effects such as data privacy issues, biased algorithms, or the exploitation of private data. In addition to encouraging self-regulation by firms, voluntary codes of conduct also help to build user trust. These norms, which prioritize openness, equity, and inclusivity, can serve as a model for the responsible application of AI. GoodLives uses artificial intelligence (AI) to provide data-driven, customized wellness solutions while keeping user privacy and ethical issues top of mind,” she added.
Echoing similar sentiments, Kiran Rudrappa, the CEO & Co-Founder of Posspole, opined, “A significant step towards fostering ethical and responsible innovation has been taken by the Indian government by developing voluntary codes of conduct for AI businesses. In order to build trust in the market and to differentiate themselves from the competition, startups must adhere to these guidelines that emphasize transparency, accountability, and fairness.”
“In addition to enhancing their reputation, Indian startups can also access government support and partnerships by aligning themselves with these principles. There are some challenges to this initiative, such as resource constraints and ambiguous guidelines, but it encourages collaboration between startups, corporations, and regulators, which is crucial to achieving sustainable growth. India’s commitment to ethical AI development is underlined by adopting these codes, positioning Indian startups to lead globally in responsible AI practices,” he commented further.
Arpit Mittal, Founder and CEO of SpeakX , said, “India’s AI market is growing rapidly, with a projected CAGR of 25-35%, expected to reach around $17 billion by 2027, according to a recent report by BCG and Nasscom. As AI transforms industries, the Indian government’s move to introduce voluntary codes of conduct for AI businesses comes at a crucial time. It offers a much-needed framework to ensure that as companies innovate, they also prioritize transparency, fairness, and accountability. These guidelines are not just about setting standards—they help build trust with users, which is essential for AI’s long-term success.”
Scheduled to be Released by Next Year
Another official stated that the optional code of conduct might be made public early in the next year. The IT ministry may publish broader guidelines as part of the voluntary code that include actions that businesses can take to prevent potential misuse of the company’s LLM and AI platforms, as well as steps that businesses can take during training, deployment, and commercial sale.
An 11-point code of conduct for businesses operating in the AI and gen-AI area has been prepared by the G7 members. According to a media report that quoted a ministry official, “The idea will be the same, but what we are trying to develop will be completely different.”
“This move by the Indian government is a significant step toward fostering ethical innovation in the industry. This initiative reflects a growing recognition that AI has immense potential to transform economies and societies, but it must be developed and deployed responsibly. From our perspective, a voluntary code provides the flexibility needed for companies to innovate while ensuring adherence to best practices in areas like data privacy, transparency, and fairness. It’s also an opportunity to build trust with consumers and regulators, ensuring that AI is used in a manner that aligns with societal values. However, while the voluntary nature of these codes is encouraging, I hope the government provides clear guidelines and engages with industry stakeholders to ensure these standards are practical and effective,” said Eric Fonseca- VP Marketing at IndoAI Tecnologies Pvt Ltd.
Bruce Keith, CEO and Cofounder, Investor AI, said,”AI is all around us, and with the rise of ChatGPT, every business will be using AI to some extent in the next five years. The velocity of change and global nature of AI is making it extremely difficult for any national government to legislate. The rewards for countries that become leaders are akin to winning the next industrial revolution. Any code of conduct needs to recognise this and be framed in a way that protects the consumer while allowing enterprise to innovate. The recent successes of GenAI and neural networks over symbolic AI (logic and reasoning) mean it is harder to make AI models explainable. As a result, I believe that the code of conduct needs to focus on the traceability of source data (and availability of citations) and transparent metrics.”
Advisory Released by the IT Ministry
The IT ministry released an advisory earlier this year in March, requesting that all platforms make sure that their computer resources do not allow for bias or discrimination or jeopardise the integrity of the voting process through the use of artificial intelligence (AI), generative AI, LLMs, or any other algorithm of that like.
The IT ministry also stated in its advisory that before any AI models, large language models (LLMs), software that uses generative AI, or algorithms that are being tested in the beta stage of development or are unreliable in any way are made available to users on the Indian internet, they must obtain “explicit permission of the government of India.” Later, the advisory was dismissed, and businesses were no longer required to register their AI or LLM prior to implementation.
Why This Step is Needed?
Even while artificial intelligence (AI) has transformed many industries, it also presents a number of threats to society, including prejudice, avoidable mistakes, poor decision-making, misinformation, and manipulation. Deepfakes and internet bots have the potential to damage democracies and erode social confidence. Criminals, rogue governments, ideological radicals, or just special interest groups may also abuse this technology to influence individuals for political or financial benefit. The possible harm to society and democratic processes has been brought to the attention of the European Parliament.
According to a recent global report, the number of deepfakes discovered worldwide across all industries increased by a factor of ten between 2022 and 2023. Prime Minister Narendra Modi recently expressed worry about the use of deepfakes to disseminate false information. At the national and international levels, numerous attempts are being made to address the threats posed by AI by addressing issues of ethics, morality, and legal values in the development and application of AI.
In honour of the incredible achievements of the Chandrayaan-3 Mission—including the gentle and safe landing of the Vikram Lander and the deployment of the Pragyaan rover on the lunar surface close to the South Pole—the Indian government has designated August 23rd as “National Space Day.”
India has become the first country to land near the Moon’s south pole and the fourth country overall to accomplish this historic feat, joining an exclusive club of spacefaring nations.
It was stated by Prime Minister Narendra Modi that “National Space Day” will be commemorated annually on August 23–following the landing of Vikram rover. The momentous landing of Isro’s Chandrayaan-3 on the moon’s south pole on August 23, 2023, was an accomplishment for India.
Despite the setback of the Chandrayaan-2 crash landing four years prior, India became the first country to perform a landing in this region with this accomplishment.
Application of Space Technologies in the Fisheries Sector
The leadership of Dr. Abhilaskh Likhi on the “Application of Space Technologies in Fisheries Sector” to honour the Chandrayaan-3 Mission’s outstanding success.
The Communication & Navigation System for the maritime domain, space-based observation and its impact on enhancing the fisheries sector, and Space Technology in Fisheries—An overview are some of the subjects that will be covered during these 18 lectures and demos.
Various stakeholders, such as the Indian Space Research Organisation (INSCOIS), New Space India Ltd., state and union fisheries departments, ICAR fisheries research institutes, fishermen, Sagar Mitras, FFPOs, cooperatives, and college and university students will take part in the hybrid mode.
How Space and Marine Life Are Closely Connected
The management and growth of marine fisheries in India can be greatly improved with the use of space technologies. Revolutionary shifts occurred in the field as a result of developments in technologies like as GIS, Earth Observations, Satellite Communication, Data Analytics, Artificial Intelligence, and Satellite-Based Navigation Systems.
Using satellites such as Ocean-sat and INSAT, scientists can track ocean colour, chlorophyll content, and sea surface temperature to find good fishing spots.
They can also use this data to detect blooms of phytoplankton, sediment, and contaminants, which help us understand how healthy the ocean is. The mission of Earth Observations is to optimise fishing operations while guaranteeing safety by monitoring ocean currents, waves, and extreme weather threats using satellites such as INSAT, Ocean-sat, SAR, etc.
With the help of GIS mapping, we can identify marine habitats, fishing grounds, and protected areas, and with the help of Navigation with the Indian Constellation (NavIC), we can follow fishing vessels using satellite-based navigation systems.
With the help of satellites, it may be feasible to communicate when at sea. In order to enhance maritime domain awareness, safety, and the livelihood of fishermen, data can be exchanged in real-time between vessels, shore-based stations, and research institutes through satellite-based communication networks.
Utilising data from several sources, data analytics and AI have the ability to forecast fish distributions, identify outliers, and enhance fisheries management. By using satellite monitoring to identify illicit operations, provide support for aqua mapping, and issue disaster warnings, these cutting-edge solutions improve maritime efficiency and safety. Furthermore, aqua zoning and image sensing provide accurate instruments for efficient fisheries management.
Since its launch on July 1, 2020, the Udyam Registration Portal (URP) of the Ministry of MSME has recorded that MSMEs owned by women make up 20.5% of all MSMEs registered on the Portal. The employment created by the total Udyam registered units is 18.73%, with 11.15% of the investment going to these women-owned MSMEs. Out of all the registered MSMEs in Udyam, the percentage of women-owned businesses accounts for 10.22% of total turnover. Results show that women-owned IMEs account for 70.49 percent of all IMEs (as of 11.01.2023) and 70.84 percent of all jobs, according to data from the Udyam Assist Platform (UAP), which records IMEs.
Appreciating and on the same line suggesting some changes to the current government, Shreya Sharma, Lawyer and Founder, Rest The Case stated, “Women’s participation in the MSME workforce has grown over the last couple of years and an increase in the Mudra loan upper limit to 20 lakhs, is surely an encouraging prospect for them. However, there are a few challenges that still hinder the further growth of the sector. There is a high level of compliance required to set up the business, and this is surely impacting the participation of women. Women entrepreneurs often face obstacles in securing credit due to the strict collateral requirements imposed by financial institutions. Additionally, the societal role of women as primary caregivers can restrict their time and mobility, limiting their ability to fully engage in and develop their businesses.”
“The difficulties are further compounded by a shortage of effective mentorship and networking opportunities, which means many women lack the crucial guidance and support to successfully manage the business environment. Nevertheless, the future holds considerable promise,” she added further.
Echoing similar sentiments, Bhavik Vasa, Founder, GetVantage opined, “The Indian government and Hon’b Prime Minister Narendra Modi’s initiatives, led by the Ministry of MSME, to empower women entrepreneurs are truly transformative. Programnes like Udyam Sakhi, Mahila Coir Yojana, and MUDRA are paving the way for women-led MSMEs to thrive. At GetVantage, we fully support these efforts, which is why we launched the INR 100 crore Rise-Up fund—India’s first non-dilutive fund dedicated to women entrepreneurs.”
Steps Taken by the Ministry of MSME to Help MSMEs Owned by Women
Initiatives to register micro, small, and medium-sized enterprises (MSMEs) owned by women through the Udyam Registration Portal.
In 2018, the Public Procurement Policy was revised to ensure that Central Ministries, Departments, and Undertakings purchase a minimum of 3% of their yearly procurement from micro and small businesses owned by women. This change was made to support female entrepreneurs.
Two measures have been added to the Credit Guarantee Scheme for Micro & Small Enterprises to assist female entrepreneurs starting their businesses as of December 1, 2022. These include a 10% reduction in the annual guarantee payments and an extra 10% coverage of up to 85% for the guarantee, compared to 75% for other entrepreneurs.
As part of its Coir Vikas Yojana initiative, the Ministry of MSME runs the “Skill Upgradation & Mahila Coir Yojana,” a training program specifically for women craftspeople working in the coir industry, with the goal of encouraging more women to start their businesses.
Initiatives by the Government to Increase the Participation of Women in MSMEs in the Country
To assist traditional artisans and young people without jobs in both rural and urban areas, the Ministry of Micro, Small, and Medium Enterprises (MSME) has launched the Prime Minister’s Employment Generation Programme (PMEGP), a large credit-linked subsidy program that encourages the creation of micro-enterprises in non-agricultural sectors. Compared to the non-special category, women beneficiaries receive a greater margin money subsidy from PMEGP (35% vs. 25%). The percentage of women receiving benefits from the PMEGP is 39%. In addition, the Ministry’s Procurement and Marketing Scheme (PMS) offers a 100% subsidy to female entrepreneurs, compared to an 80% subsidy for male entrepreneurs, so that they can participate in domestic trade fairs.
Providing Financial Support to Female Entrepreneurs
To promote gender equality in the business world, it is essential to support companies that are owned by women. The MSME Insights Report 2024, compiled by Kinara Capital, examined 44,821 MSMEs in six different industrial states of India. It found that compared to MSMEs owned by men, those owned by women hired 11% more women. Cost optimization, income growth, and repayment of business loans were all areas in which the survey found that MSMEs owned by women fared better than those owned by men. The societal benefits of economic progress can only be fully realized if women business owners are granted equal opportunity to compete and flourish, according to this data-driven argument.
“I believe that financial support schemes for women entrepreneurs, such as increased money subsidies, are essential to address the workforce divide that has persisted for centuries. However, financial aid alone will not achieve the ultimate goal of empowering women and recognising their contributions to the MSME sector. This must be complemented by robust skilling, training, and guidance to ensure their success and sustainability in the business world,” commented Pallavi Jha, Chairperson and Managing Director of Dale Carnegie Training India and Walchand PeopleFirst Ltd.
The pharmaceutical industry is one target of the Startup India Initiative, announced on January 16, 2016, to encourage investment and foster innovation across various sectors. The three main programs that make up the initiative are the Credit Guarantee Scheme for Startups (CGSS), the Startup India Seed Fund Scheme (SISFS), and the Fund of Funds for Startups (FFS).
The Startup India Initiative was initiated on January 16, 2016, to promote innovation and encourage investments across various businesses, including the pharmaceutical sector. The Fund of Funds for Startups (FFS), the Startup India Seed Fund Scheme (SISFS), and the Credit Guarantee Scheme for Startups (CGSS) are the three main programs that are included in this project.
The Biotechnology Industry Research Assistance Council (BIRAC), which falls under the Department of Biotechnologies, provides financial assistance through various programs and initiatives. Some of these programs include the Biotechnology Ignition Grant (BIG), Sustainable Entrepreneurship and Enterprise Development (SEED), and Launching Entrepreneurial Driven Affordable Products (LEAP) schemes. Each entrepreneur receives cash ranging from INR 30 lakhs to INR 100,00,000 which enables them to develop their concepts further, create proofs-of-concept, conduct pilot projects, and eventually commercialize their products and technology. Through the i4 program and the PACE program, BIRAC also encourages research and innovation in the field of biotechnology.
It is also important to point out that the Department of Pharmaceuticals has initiated a program known as the Scheme for Promotion of Research and Innovation in the Pharma-MedTech sector (PRIP). Under Component BIII of the PRIP program, twenty-five out of a total of one hundred and fifty research projects in the six priority areas that have been identified are for new businesses in the pharmaceutical industry.
There are a total of 1,40,803 companies that have been recognized as startups by the Department for Promotion of Industry and Internal Trade (DPIIT) as of the 30th of June 2024. Of them, 2,127 are from the pharmaceutical industry. There were 1397 start-ups in the pharmaceutical industry that were recognized by the DPIIT throughout the course of the past three years.
Future Plans
The government is currently in the process of implementing three flagship schemes as part of the Startup India strategy. These schemes are the Fund of Funds for Startups (FFS), the Startup India Seed Fund Scheme (SISFS), and the Credit Guarantee Scheme for Startups (CGSS). By these Schemes, assistance is provided to new businesses in all fields and industries, at different phases of their business cycle; this includes startups. Incubators are the distribution channel via which SISFS offers financial assistance to seed-stage entrepreneurs.
Updated Status of Schemes and Initiatives
In the fiscal year 2021-22, the initiative was initiated for four years, with a total capital of INR 945 crores. 205 incubators have been approved for a total of INR 862.84 crore under the SISFS programme as of the 30th of June, 2024. It is the Small Industries Development Bank of India (SIDBI) that is responsible for the operationalization of the Foreign Funds Service (FFS), which was intended to stimulate investments in venture capital. Alternative Investment Funds (AIFs) that are registered with the Securities and Exchange Board of India (SEBI) receive funding from SIDBI. These AIFs then invest in new businesses. As of the 30th of June 2024, 138 AIFs have been committed to receiving a total of INR 10,804.7 crore under the FFS. The CGSS is being introduced to make it possible for DPIIT-recognized companies to obtain loans without the need for collateral through approved financial institutions, also known as Member Institutes (MIs). The National Credit Guarantee Trustee Company (NCGTC) Limited is the entity responsible for the implementation of the system, which has been operationalized on a pilot basis since the first of April in 2023. As of the 30th of June in the year 2024, 182 loans with a total value of INR 426.09 crore have been guaranteed to startups that serve as beneficiaries. Through these initiatives, the government of India has demonstrated its dedication to establishing a vibrant environment for startup companies in the country.
During the past three years, the state of Uttar Pradesh has seen the establishment of 214 new industries that fall within the Pharma Sector. Of these, 176 units are operating in the medical device sector, while 38 units are operating in the drug and formulations sector.
The Indian government has taken a bold step towards boosting the country’s gold reserves. The Reserve Bank of India (RBI) has been granted the authority to import gold without the burden of customs duty and the Agriculture Infrastructure and Development Cess (AIDC).
Traditionally revered in Indian culture as a symbol of wealth and prosperity, gold has received special attention from policymakers.
This government’s decision, notified on March 12, marks a pivotal moment in the country’s economic landscape, with implications that extend far beyond the glittering precious metal.
Let’s delve into the intricacies of this exemption, its impact on the Indian economy, and the rationale behind this significant policy shift.
As the world’s second-largest consumer of gold, after China, India’s relationship with the metal is multifaceted, shaping not only personal adornment but also economic policies and trade dynamics.
Gold imports in India have been subject to customs duty and the Agriculture Infrastructure and Development Cess (AIDC), acting as barriers to the seamless importation of this valuable resource.
At present, the import duty on gold, silver findings, and coins of precious metals is at 15%, comprising a Basic Custom Duty (BCD) of 10%, along with 5% for the Agriculture Infrastructure Development Cess (AIDC).
Even the Reserve Bank of India (RBI), tasked with managing the nation’s foreign exchange reserves, was not exempt from these levies until the recent policy change.
According to the latest reserve management report from the Reserve Bank of India, as of September 2023, the central bank possessed a total of 800.79 tonnes of gold, inclusive of gold deposits amounting to 39.89 tonnes. Out of this total, 388.06 tonnes were held in overseas locations, while 372.84 tonnes were held domestically.
The decision to waive these charges for the RBI signifies a notable departure from past practices and signals a fundamental shift in India’s approach to gold imports.
The exemption granted to the RBI not only strengthens the central bank’s position in managing foreign exchange reserves but also underscores the government’s commitment to enhancing financial stability.
RBI Governor Shaktikanta Das informed reporters during the customary post-policy review press conference on April 5 that the accumulation of gold reserves is a component of our reserve deployment strategy.
“We are building up a gold reserve that is a part of our reserve deployment,” a media report quoted Das.
With gold prices often rising during economic uncertainty, bolstering gold reserves can serve as a vital buffer against external shocks and contribute to the country’s sovereign wealth.
By allowing the RBI to import gold without additional levies, the government is not only recognizing the central bank’s pivotal role in financial management but also sending a positive signal to the gold market in India.
This move aligns with global trends of central banks diversifying their reserves, positioning gold as a safe-haven asset in times of economic volatility. The policy shift reflects a broader strategy to promote reserve diversification, support the domestic gold market, and fortify India’s overall economic resilience in a rapidly changing world.
“Equity markets have gained while bond yields and US dollar have remained volatile. The overall outlook is challenged by continuing geopolitical conflicts, disruptions in trade routes and high public debt burden,” RBI chief said in his statement after the monetary review.
Implications of the Exemption
The exemption granted holds significant implications for various aspects of the Indian economy.
Here are some key points to consider:
Boost to Gold Reserves
This decision allows the RBI to increase its gold reserves, strengthening the country’s overall foreign exchange holdings. According to the World Gold Council, India’s official gold reserves stood at 695.31 metric tons as of December 2023, representing 6.7% of total foreign reserves.
Cost Advantage for the RBI
Importing gold without levies provides a cost advantage to the RBI, enabling more strategic management of foreign exchange reserves. With gold prices fluctuating, this exemption allows the RBI to capitalize on favorable market conditions without the burden of additional costs.
“In the Reserve Bank, we have embarked on strengthening and building up higher (forex) reserves. Our reserves are around USD 620 billion at the moment. Individual emerging market economies have to insulate and protect their economies from the spillovers of global currency movements and fluctuations,“ RBI head Shaktikanta Das has said. The RBI’s forex reserves rose to an all-time high of USD 645.6 billion as of March 29, 2024.
Breaking: RBI Governor Shaktikanta Das announces India’s Foreign Exchange reserves have surged to a record-breaking $645.6 billion as of March 29, 2024! 💰💥 This milestone showcases India’s economic strength and resilience. #CongressManifesto pic.twitter.com/gh6wVfzIJ5
The exemption can potentially stabilize the gold market in India, impacting market sentiment and prices due to the RBI’s significant gold purchases.
According to data from the India Bullion and Jewellers Association (IBJA), gold price in India is around Rs 71,210 per 10 gm as of April 8. As per market analysts, the gold rate may range around Rs 75,000 per 10 gm in the coming weeks.
“Gold prices have surged on safe-haven demand,” said the Monetary Policy Statement, 2024-25 Resolution of the Monetary Policy Committee (MPC) April 3 to 5, 2024.
Gold prices are currently reaching near record-high levels in both domestic and international markets, largely due to increasing speculation that the US central bank could implement its first rate cut as soon as June.
The impact of this exemption goes beyond the surface of gold importation. By reducing dependence on imports and promoting financial stability, the RBI’s increased flexibility in gold imports sets a new precedent for economic management. This move aligns with the government’s goal of enhancing sovereign wealth and fostering a more robust gold market in India.
As per the World Gold Council: “Gold is an important component of central bank reserves because of its safety, liquidity and return characteristics – the three key investment objectives for central banks. As such, they are significant holders of gold, accounting for around a fifth of all the gold that has been mined throughout history.”
The exemption granted to the RBI from paying customs duty and cess on gold imports has profound implications for the Indian economy.
Reduced Dependence on Imports
India heavily relies on gold imports, with cumulative imports surging by 38.76% reaching USD 44 billion from April to February in 2023-24, as per data from the Ministry of Commerce and Industry. Gold imports jumped substantially by 90.0 percent during October to February 2023-24 period, reflecting strong retail demand.
“Gold prices rallied in Q4 of 2023-24 as financial markets priced in deeper policy rate cuts for 2024 as reflected in lower bond yields and a weaker US dollar. The hardening of gold prices continued in Q1:2024 to record high in March on growing expectations of interest rate cuts by the US Fed, coupled with demand by central banks and Chinese investors,” as per RBI’s monetary policy report released on Friday, April 5th.
The exemption to RBI helps reduce the country’s dependence on external sources for gold supply, enhancing India’s self-sufficiency in the gold market.
On March 28, the Reserve Bank of India authorized Indian Overseas Bank, Punjab National Bank, and Union Bank of India to exclusively import gold for the fiscal year 2024-25, effective from April 1st.
RBI has also listed 11 other banks to import gold and silver both from April 1.
Banks act as intermediaries in the importation process, assisting gems and jewelry makers in acquiring the necessary gold for their operations.
Foreign Exchange Management
The RBI plays a crucial role in managing India’s foreign exchange reserves. By importing gold without additional levies, the RBI can diversify its reserves and manage foreign exchange fluctuations more effectively. This strengthens the RBI’s ability to maintain a stable exchange rate and manage any external shocks.
“The Indian rupee (INR) has remained largely range-bound as compared to both its emerging market peers and a few advanced economies during 2023-24. The INR was the most stable among major currencies during this period. As compared to the previous three years, the INR exhibited the lowest volatility in 2023-24. The relative stability of the INR reflects India’s sound macroeconomic fundamentals, financial stability and improvements in the external position,” RBI Governor Das said in a statement after the monetary policy review.
On the external financing side, India’s foreign portfolio investment (FPI) flows saw a significant turnaround in 2023-24. Net FPI inflows stood at USD 41.6 billion during 2023-24, as against net outflows in the preceding two years (USD 14.1 billion in 2021-22 and USD 4.8 billion in 2022-23). “This is the second highest level of FPI inflow after 2014-15,” Das said in his statement.
Enhancing Sovereign Wealth
Accumulating gold reserves enhances the country’s sovereign wealth. As gold prices tend to rise in times of economic uncertainty, having substantial gold reserves can act as a buffer against external shocks and support the Indian economy in challenging times.
“In January, the Reserve Bank of India made a significant addition to its gold reserves, acquiring 8.7 tonnes. This marks the most substantial purchase since July 2022, elevating the RBI’s total gold holdings to 812.3 tonnes—up from 803.58 tonnes in December 2023. Data from the World Gold Council confirms this increase. The strategy behind the central bank’s gold accumulation is to diversify its foreign exchange reserves and provide a buffer against foreign currency fluctuations, as noted by financial experts,” a senior manager at Kotak Mahindra Bank said.
Gold Reserves of Largest Gold Holding Countries Worldwide as of 2nd Quarter 2023
Rationale Behind the Exemption
By acknowledging the RBI’s crucial responsibility in maintaining financial stability and diversifying foreign exchange reserves, the government aims to empower the RBI to effectively manage the economy’s monetary aspects.
Granting this exemption to the RBI also serves as a positive signal to gold importers in India, showcasing the government’s commitment to facilitating gold imports and supporting the domestic gold market. This move is poised to attract more investors and stimulate economic activity within the gold sector, fostering growth opportunities and bolstering the overall economic landscape.
Furthermore, the decision aligns with the global trend of central banks diversifying their reserves, with gold being recognized as a safe-haven asset. Allowing the RBI to import gold without levies not only promotes reserve diversification but also enhances the stability and strength of India’s foreign exchange holdings. This strategic move positions the country favorably in the international financial arena.
Central banks around the world, including those of Russia, China, Turkey, Kazakhstan, and Poland, have been actively buying gold as part of their reserve management strategies. They view gold as a valuable asset for diversifying their holdings and enhancing financial stability.
Unwavering demand from central banks has been supportive of gold demand again this year and helped offset weakness in other areas of the market, keeping 2023 demand well above the ten-year moving average.
“In addition to monetary policy, geopolitical uncertainty is often a key driver of gold demand, and in 2024 we expect this to have a pronounced impact on the market. Ongoing conflicts, trade tensions, and over 60 elections taking place around the world are likely to encourage investors to turn to gold for its proven track record as a haven asset. We know that central banks often cite gold’s performance in times of crisis as a reason to buy, which suggests demand from this sector will stay high this year and may help to offset a slowdown in consumer demand due to elevated gold prices and slowing economic growth,” Louise Street, Senior Markets Analyst at the World Gold Council, commented.
In essence, the rationale behind this exemption underscores a multi-faceted approach aimed at promoting financial stability, fostering economic growth, and empowering the RBI in its pivotal role. By exempting the RBI from import levies on gold, the government paves the way for a more robust and resilient economy, reinforcing India’s position as a key player in the global financial landscape.
India ranked as the second-largest gold importer globally following China, possesses approximately 14% of the world’s gold reserves, amounting to around 27,000 tonnes.
Conclusion
Embracing a Golden Future
By leveraging gold as a strategic asset, India is poised to navigate economic uncertainties with greater resilience and fortitude.
Fortifying Financial Resilience
The exemption granted to the RBI signifies a pivotal step towards fortifying India’s financial resilience and sovereignty. As the RBI accumulates gold reserves free from additional levies, the country enhances its sovereign wealth and insulates itself against external shocks. With gold prices serving as a reliable hedge during turbulent times, India’s decision to exempt the RBI from import levies underscores a proactive approach to safeguarding the nation’s economic well-being.
Paving the Path to Prosperity
This exemption not only streamlines the gold import process but also signals a positive outlook for investors and industry stakeholders. As India embraces its rich cultural affinity for gold while embracing modern economic strategies, the future shines bright with possibilities for growth and prosperity.
Shaping a Resilient Economic Landscape
By empowering the central bank to diversify its reserves and strengthen its financial position, India is laying the groundwork for a more stable and robust economy. This strategic move aligns with global trends in reserve management and positions India as a forward-thinking player in the international arena.
“All central banks are moving towards de-dollarization strategies.As rightly pointed out, this could be a big & bold move by the Govt.of Bharat towards stabilizing the Indian Rupee!,” said Building MyGold-‘Bharat ka pehla Gold Bank’ Founder & CEO Amol Bansal. MyGold is a distinct platform or an app that addresses various shortcomings commonly found in existing digital gold platforms.
The MyGold app offers users the flexibility to monetize physical gold lying in homes and bank lockers. With features like ‘Upload Gold’ for digitizing existing idle gold at home or in the bank, and ‘Sell Gold’ for converting gold into money, users can easily manage their gold assets with a simple appointment booking.
Future Implications
As the Reserve Bank begins to import gold without the burden of customs duty and cess, the future implications of this decision loom large on the horizon. The exemption granted to the RBI opens doors to a myriad of possibilities that could shape the Indian gold market in the years to come.
Here are some key future implications to consider:
Diversification of Investment Portfolios
With the RBI’s increased ability to import gold at a lower cost, there is a potential for a shift towards diversification in investment portfolios. According to the World Gold Council, central banks across the globe have been increasing their gold reserves, with purchases reaching 273.9 tonnes in the third quarter of 2023. One tonne of gold is equal to 1000 kg of gold.
Technological Advancements
The exemption granted to the RBI could pave the way for technological advancements in the gold market. Innovations in digital platforms, blockchain technology, and secure transactions may revolutionize the way gold is traded and stored, offering greater convenience and transparency to consumers.
Global Market Influence
The RBI’s enhanced capacity to import gold without levies could position India as a significant player in the global gold market. Increased gold reserves and strategic imports may impact international prices, fostering stronger ties with gold-producing nations and shaping India’s role in the global economic landscape.
The government’s decision to allow the RBI to import gold without levies may spark broader policy reforms in the gold sector. Discussions on regulatory frameworks, trade agreements, and market interventions could take center stage, paving the way for a more dynamic and resilient gold market in India.
The future implications of the RBI’s exemption from customs duty and cess on gold imports hold the promise of transforming the Indian gold market into a hub of innovation, investment diversification, and global influence. As stakeholders navigate these uncharted waters, the evolving landscape presents both opportunities and challenges that will shape the trajectory of the gold market in India and beyond.
Navigating the realm of gold imports without paying customs duty and cess poses a set of potential challenges that must be carefully considered.
One key concern is the impact on the domestic gold market dynamics. With the RBI’s increased ability to import gold at a reduced cost, there may be fluctuations in supply and demand, potentially leading to price volatility and market uncertainties. Balancing the need for a stable market with the benefits of reduced import levies will require a delicate equilibrium.
Furthermore, the exemption granted to the RBI could also raise questions about fair competition within the gold industry. As the central bank gains a cost advantage in importing gold, there may be implications for other market participants, including gold traders, jewelers, and investors. Ensuring a level playing field and addressing any disparities that may arise from this exemption will be crucial to maintaining a healthy and transparent gold market ecosystem in India.
Another challenge that may arise from allowing the RBI to import gold without levies is the potential impact on revenue generation for the government. Customs duty and cess on gold imports serve as significant sources of revenue, contributing to the country’s fiscal resources. The exemption could lead to a shortfall in revenue, prompting the government to explore alternative sources or adjust fiscal policies accordingly to mitigate any adverse effects.
However, the revenue department is pretty happy with the revenue generated by gold imports this fiscal.
“Gold imports have given us good revenue….In nine months this fiscal, gold imports are at 617 tonnes. So gold imports should exceed 800 tonnes at this rate,” Revenue Secretary Sanjay Malhotra had said in an interview to Moneycontrol in February.
Moreover, managing the increased gold reserves accumulated by the RBI as a result of this exemption could present logistical challenges. Safeguarding and effectively utilizing these reserves to support financial stability and economic growth will require strategic planning and prudent decision-making.
Overall, while the decision to allow the RBI to import gold without paying import levies brings significant advantages, it also brings a set of challenges that need to be carefully addressed. By proactively addressing these challenges and implementing effective mechanisms to mitigate any potential drawbacks, India can harness the benefits of this policy change while safeguarding the integrity and stability of its gold market and economy.
While the implications of this exemption are still unfolding, it is evident that this move will have a profound impact on various stakeholders, from consumers and investors to policymakers and experts.
As India navigates through the complexities of this policy change, it is essential to closely monitor its effects on the economy and assess the long-term implications for the country’s financial well-being.
FAQs
What is the recent announcement regarding gold import by RBI?
The Indian government has allowed the Reserve Bank of India (RBI) to import gold without having to pay customs duty and the Agriculture Infrastructure and Development Cess (AIDC).
What are the implications of this exemption?
This exemption has significant implications for the Indian economy, gold market, and financial stability. It opens up new opportunities for RBI to manage its gold reserves more efficiently.
How will this exemption impact the Indian economy?
The exemption is expected to have a positive impact on the Indian economy by potentially boosting the gold market, increasing financial stability, and enhancing RBI’s ability to manage its gold reserves effectively.
What is the rationale behind this significant policy shift?
The rationale behind this exemption is to streamline the process of gold import by RBI, enhance its operational efficiency, and align with the government’s efforts to promote economic growth and stability.
The central government’s goal of boosting India’s employability through comprehensive training, skilling, and reskilling was reaffirmed in the Union Budget 24-25, which was delivered by Finance Minister Nirmala Sitharaman. The employment situation for frontline workers in India is expected to improve as a result of the plan to increase domestic tourism, which is expected to generate numerous job possibilities for local workers.
The Budget also highlighted the importance of working together to elevate women, youth, farmers, and underprivileged workers. This aligns with our shared goal of enhancing the dignity and well-being of these diverse groups, who are steadfastly propelling India’s economic growth. To further guarantee that women workers have access to medical and healthcare facilities, the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) should be extended to all ASHA and Anganwadi workers.
It was fascinating to learn about how India’s tech stack has grown into a strong example for the rest of the globe to follow and how tech-first firms like ours are solving problems for markets throughout the world through innovation.
While we await more specific policies to expand gig workers‘ social security and formalise the workforce, business owners and executives in the sector must now engage in transparent communication with lawmakers to craft policies that benefit both employers and independent contractors.
Elaborating further on the recently concluded Budget 2024, Sumit Singh, CEO and Co-Founder of DashLoc, stated, “The budget has clearly exhibited that the government is extending full-fledged support towards adoption of technology across sectors. The special mention of deep-tech in the defence section gained in the speech truly indicates that the government is going to support emerging technologies in crucial sectors, too. Alongside, it is a matter of pride that STEM courses have seen aggressive enrolment from women. We can expect a quality and skilled workforce in India that will keep the wheel running towards striking progress.”
Echoing similar sentiments, Devan Gupta, Co-Founder and Partner, Cretum Advisory commented, “In this budget, the tax slab remains unchanged for the common man, ensuring no taxes are applicable on income up to Rs 7 Lakhs under the default “New Tax Regime.” The government’s focus is on simplifying business processes, and they have withdrawn outstanding direct tax demands, including INR 25,000 for FY 2009-10 and Rs 10,000 for FY 2010-11 to 2014-15. Additionally, there is a relaxation in TCS on foreign remittances under the LRS scheme, with the TCS rate reduced from 20% to 5% and no TCS imposed on expenses up to Rs 7 Lakhs. The issue surrounding the optional nature of Input Service Distributor (ISD) and cross-charging, previously resolved by a government circular allowing companies to choose whether to adopt ISD, has been reignited due to a new government proposal mandating the use of ISD. This change means companies will now face an increased compliance burden, as they will be required to register for ISD and additionally determine situations where cross-charge invoices need to be issued between branches that share the same PAN but have different GSTN numbers.”
“We commend the government’s focus on tech-driven progress in the 2024 budget. The unveiling of a new scheme dedicated to bolstering deep-tech technologies for defence purposes is a testament to the commitment towards fostering self-reliance (‘Atmanirbharta’). This forward-looking initiative aligns seamlessly with the government’s visionary ‘Viksit Kaal’ objective. With the emphasis on ‘Aatmanirbhar Bharat‘, this scheme will be pivotal for the growth and resilience of our nation’s defence sector in areas such as AI, Quantum, Analytics, and more. We are committed to supporting India’s self-reliance vision and are actively engaged with the local industry and academia to build trusted high-tech capabilities in-country. We are optimistic that together we are poised to propel India’s journey towards becoming a formidable force in defence manufacturing and exports on the global stage,” stated Ashish Saraf, VP and Country Director, Thales
As predicted, Union Finance Minister Nirmala Sitharaman has suggested keeping the current tax rates for import tariffs, direct taxes, and indirect taxes in the year of the 2024 General Elections. She stated in her address on Budget 2024, “In keeping with convention, I do not propose to make any changes relating to taxation and propose to retain the same tax rates for direct and indirect taxes, including import duties.”
“However, certain tax benefits to startups and investments made by sovereign wealth or pension funds, as also tax exemption on certain income of some IFSC units, are expiring on March 31, 2024; to provide continuity, I propose to extend the date to March 31, 2025,” according to her.
Reacting to the announcement, Mahesh Krishnamoorthy, Managing Director of Core Integra, stated, “The presented budget is indeed an interim one, prompting anticipation for the formal budget scheduled to be unveiled by the new Government in July 2024. It is heartening to observe the strides India has taken over the past decade. The Government’s continued commitment, as outlined in the budget, towards fostering ease of doing business, skill development, employment generation, and strengthening the entrepreneurship and startup ecosystem is commendable. In a positive development, the budget overview remains rational and aligned with the ongoing initiatives, even in the backdrop of it being an election year. The forthcoming annual budget later this year will unveil whether the new Government opts to maintain the current interim budget structure or introduces new measures, particularly concerning the implementation of the New Wage Code.”
“The 2024 interim budget has brought positive developments by extending tax benefits to startups, sovereign funds, pension funds and some IFSC units till March 2025. We expect the July budget to build on these initiatives and continue to foster growth prospects for BFSI and startups in the country. Aligning the GST input credit for NBFCs to 100% at par with other entities can boost the growth of NBFCs. Policies that improve credit access for lower-income groups and first-time borrowers would be warmly received. Following the RBI’s call for diversification of funding channels beyond traditional banks, policies encouraging NBFCs to explore obtaining credit from international agencies or the government would expand their financing options. The ongoing support for startups through tailored fiscal policies, tax benefits, and easier credit access will further stimulate entrepreneurship, innovation, and employment generation,” Sashank Rishyasringa, Co-founder of Axio, opined.
Budget 2024 on the Healthcare Sector
Interim Budget 2024
Along with the 157 newly established medical colleges, the Union Budget 2023 included the announcement of new nursing institutions. In addition, Sitharaman has pledged to examine seven crore individuals in an effort to eradicate sickle cell anaemia by the year 2047. In addition to presenting the budget, she also stated that certain ICMR labs will be available for research to academics from public and private medical colleges as well as the business sector.
Encouraging these moves, Dr Neerja Agarwal, Psychologist and Co-founder of Emoneeds (Mental & Health Wellness), said, “While the interim budget lacked specific policies or initiatives for the mental health sector, we remain optimistic that post-election, the full budget will address this critical area. With approximately 150 million Indians requiring mental health care services and a stark shortage of professionals – only 0.3 psychiatrists, 0.07 psychologists, and 0.07 social workers per 100,000 people – the need is urgent. On a positive note, we commend the government’s commitment to other health initiatives, including the extension of Ayushman Bharat, consolidation of maternal and child healthcare schemes, and the remarkable 1-lakh crore corpus for private sector R&D. These efforts reflect a commendable focus on the nation’s well-being, growth and innovation.”
With a focus on health sector research and workforce development for budget 2023–24, the push for R&D opened the door to more advanced medical practices; now, public and private organisations can work together to educate and train healthcare workers, which will help alleviate shortages in the workforce and boost healthcare quality generally.
“The increased allocation of resources and funds is up by 13-28% from the last budget, opening the door for more innovation, especially when it is concerned with minimally-invasive, highly result-oriented fat removal procedures, i.e., 4D liposuction or when things are centrally focussed on skin rejuvenation, LHR (laser hair removal), or postpartum surgeries, including breast surgeries, abdominoplasty, and cosmetic gynaecology. We hope that in the future, we explore the option to access cosmetic surgeries, availing the facilities with insurance easily and associated financial assistance to the masses prohibited from costlier medical or cosmetic procedures,” said Dr. Karishma Kagodu, Founder of Karishma Aesthetics.
The Indian government’s plan of setting up graphic processing unit (GPU) clusters for startups in the artificial intelligence industry may be a step in the right direction but will reap benefits only when complemented with adequate development of skills and technical know-how across the country, according to a few industry experts that StartupTalky spoke with.
On September 22, Union Minister Rajeev Chandrasekar said the government plans to set up a major GPU cluster under the India AI (Artificial Intelligence) program. There have also been media reports citing that the officials in the Ministry of Electronics and IT have been discussing a proposal to set up a cluster of 25,000 GPUs under a public-private partnership (PPP model) for AI start-ups.
Unlike CPUs (Central Processing Unit) of a computer which performs simple computations; GPUs perform more complex and heavy computations. For instance: processing images, special effects, highly intensive applications such as video games, and artificial intelligence.
At a time when the AI sector in India is expected to boom, this move by the government has sent a wave of initial optimism among startups and industry leaders.
“…this forward-thinking initiative could be a game-changer for India’s AI startups, including companies such as Josh in the content creation space,” said Sunder Venketraman, Head of Content, Creator and Monetization Ecosystem, Josh App, VerSe Innovation. “At Josh, we’ve been leveraging AI to empower creators across Bharat and this development gives the motivation and confidence in the future of content creation in the country,” Venkataraman said.
The International Market Analysis Research and Consulting Group expects the AI market in India to witness a sharp growth of around 33% during 2023-2028 to touch $3.9 billion by 2028.
As of now, the key manufacturers in the GPU market are NVIDIA and AMD, both headquartered in California. According to global trade data provider Volza, India is the top importer of GPUs in the world as of May 2023. As of May 31, India’s GPU imports stood at 31,022 shipments.
There has been a sudden surge in demand for GPUs as AI companies look to integrate them into applications and programs. During his recent visit to India, Nvidia Corp. Chief Executive Officer Jensen Huang touted India to be “One of the largest AI markets in the world”.
“India will have to walk on both legs, balancing manufacturing as well as the service sector, with the private sector driving the tailwinds of the Indian economy,” said CRISIL chief economist D.K. Joshi.
Setting up GPU clusters will eventually translate into speedier processing and a shorter turnaround time for processing vast data.
Skills – Need of the Hour
However, as automation and the AI industry mushroom in the country, there is a dire need to develop skills to complement this change.
Partner at Optimyze Finance LLP Manu Gupta told StartupTalky, “This is an important move as the world is coming to consume content in the video. The world is less about text today and moving about images and video. Tax incentives are a very powerful tool that the government has, to attract investment. But at the end of the day, this is a very knowledge-based industry. It is the skills of the people which will make somebody set up shop.”
Recently, JLL in its report said it expects India’s data centre industry to add 693 MW of capacity by the end of 2026. This sharp rise is expected on the back of increasing digital growth, digital public infrastructure, 5G rollout, and new AI applications like machine learning coupled with data protection laws and state incentives.
“To use the automation, I need to have the skill set. This learning process needs to be imparted to people. I need manpower for AI, which needs to be implemented right at school and college levels to develop the skill set. Secondly, general people need to be educated through ads or public awareness, training programs on how to simultaneously upgrade or update AI process and skill sets,” said the India operations Chief Financial Officer of a large France-based digital solutions company who requested anonymity.
Skill Development Initiative
Recognising this need, Prime Minister Narendra Modi during the recently concluded Group of 20 countries meeting in September called for a huge thrust on upskilling during his interaction with the labour ministry officials.
“We all need to skill our workforce in the use of advanced technologies and processes. Skilling, re-skilling and upskilling are the mantras for the future workforce. In India, our Skill India Mission is a campaign to connect with this reality,” Modi said.
The government has also recently launched the Skill India Digital program which is an online platform to encourage skill development, education, employment, and entrepreneurship within the country.
Earlier this year, the government also launched “AI for India 2.0”, an online free training program on AI in vernacular languages. This is a joint initiative by GUVI (Grab Your Vernacular Imprint–an IIT Madras and IIM Ahmedabad incubated education technology company) and Skill India.
Looks like the beginning of a long road to upskilling and learning for a digital India.
The government of India’s various initiatives and policies facilitate the growth of startups in India. Experts believe that government policies have made accessing capital easier.
India is now a booming economy for startups to prosper. Much of the credit goes to the Government of India for taking suitable initiatives to make the country a safe home for Indian startups to thrive. The recently concluded G20 summit has promised to facilitate global collaboration and raise a whopping $1 trillion by 2030, hence, Indian startups can see the Sun shining bright for long enough to give them the space and time to “frost themselves”’.
It doesn’t matter which sector your business is catering to, whether it’s fintech, SaaS, or prop-tech; government initiatives serve businesses as a whole. This provides them with the opportunity to grow and meet the needs of not only people in the metros but also those in Tier 2, Tier 3 cities, and smaller towns.
Kanika Bali, Partner, Optimyze Finance LLP, stated that India’s startup ecosystem has been on an unprecedented growth trajectory, establishing itself as the third-largest startup hub globally. With over 99,000 DPIIT-recognized startups spread across 670 districts as of May 2023, India’s prowess in innovation and entrepreneurship is undeniable. This remarkable achievement is not confined to a single sector, with startups emerging in 56 diverse industrial sectors, showcasing the nation’s versatility and dynamism.
Ms. Bali also added that one of the standout achievements of government policies is the exponential growth in funding, reflecting investor confidence in India’s startups. Over the period from 2015 to 2022, there has been a staggering 15-fold increase in total startup funding. This infusion of capital has catalyzed innovation, enabling startups to scale and address critical challenges across various sectors.
Jitender Ahlawat, Founder and Managing Partner, of HJA & Associates, said, “The legal environment for businesses has been greatly simplified thanks in part to the ‘Startup India’ program, which was introduced in 2016. It provides tax breaks for three consecutive financial years out of its first ten years since inception in order to lessen the financial strain on new startups and increase their appeal to investors. The program also makes it simpler for businesses to get cash by facilitating access to funds through programs like the Fund of Funds for Businesses (FoF) and credit guarantee schemes.”
StartupTalky interacted with entrepreneurs and experts from a range of industries and the government has been praised for its various startup-friendly initiatives and policies.
Mr. Saurabh Vohara, Founder and CEO, of ALYF, praised the government initiatives like Startup India and Digital India as these initiatives have given investors the trust and confidence to invest in startups.
He said, “The government’s supportive policies have been instrumental in ALYF’s journey to democratize holiday home ownership in India. Initiatives like Startup India and Digital India have given investors trust and confidence to back startups like us who are trying to solve real estate challenges through technology and AI. We believe that further enhancements to government policies including tax incentives, streamlined approvals for new project launches, and joint research initiatives will definitely continue to foster innovation and drive economic growth in the real estate startup sector.”
Dr. Nikhil Sikri, CEO and Co-founder, Zolostays, said, “The government’s decision to implement 12% GST on PG and student housing for rates less than Rs 1,000 per night and 18% for others is a progressive move that promises to bring greater clarity and efficiency. We strongly believe that this step has enhanced compliance, reduced the prevalence of unscrupulous practices, and ultimately resulted in a more sustainable co-living and student housing ecosystem.”
Moreover, he also mentioned that the government initiatives in research and startup incubation serve as the cornerstone of informed decision-making in the real estate sector. Through rigorous analysis and data-driven insights, the government has steered the course of housing policies, urban planning, and market regulations, ensuring affordability, sustainability, and economic stability. These initiatives have fostered equitable housing solutions.“We are committed to offer our patrons with high-quality, affordable co-living accommodations, and we are positive about the government regulations that will aid to further enhance an organized ecosystem,” Dr. Sikri added.
Hardware-tech
Pramod Kathuria, Founder and CEO, of Easiloan, mentioned that there needs to be a balance between support and oversight. He said, “To boost startup growth in India, government policies should focus on enhancing funding accessibility through grants and tax incentives, simplifying regulations, and promoting education and research. Favorable international trade agreements and entrepreneur-friendly visas should also be prioritized for global expansion. Striking a balance between support and oversight is key.”
Fashion
Ms.Varija Bajaj, Founder of Office & You, Lela, and Varija Design Studios, shares that the support provided by organizations like Startup India and Invest India has been truly remarkable. They have gone above and beyond in their efforts. The incentives for startups, the invaluable mentorship, and guidance on investments have been nothing short of brilliant.
“I believe these initiatives have led to the establishment of numerous incubation centers and have transformed the mindset of individuals who previously might not have considered investing in startups,” she added.
Lending-tech
Mr. Bhavik Vasa, Founder and CEO, of GetVantage, while talking about the credit deficit in the Indian SME sector mentioned that the recent government allocation announced in the Budget 2023 would foster the growth of small businesses.
He said, “In recent budget sessions, the government has allocated substantial capital for priority sector lending and introduced corporate guarantee schemes to fuel the growth of small businesses. There is a strong awareness of the need to support these sectors to achieve the goal of becoming a $5 trillion economy. This involves identifying the importance of these sectors at the government and Finance Ministry levels, along with the active participation of industry players. The government’s efforts are aligning well with the growing importance of small businesses and startups in India, and there is a significant amount of capital earmarked for these sectors.”
Mr. Rajarshi Bhattacharyya, Chairman and Managing Director of ProcessIT Global, said. “If your startup is performing well for three years, you become eligible for tax exemptions. It can hardly get better than this. The ecosystem is designed to support your growth. The government, in collaboration with organizations like NASSCOM, organizes various mentorship programs under the Startup India initiative, providing people with invaluable guidance and support.”
He also mentioned that among the top 15 cities globally for startups, three of them are in India – Bangalore, Mumbai, and Delhi NCR. This is a testament to the encouragement the government provides for individuals to become entrepreneurs, break free from mundane jobs, and pursue innovative ideas. Access to funding is available, and Indians are known for their brilliant minds. Mr Bhattacharyya also added that the policies have been established to enable startup companies to participate in large government tenders without needing to provide Earnest Money Deposits (EMDs). Membership in the Startup India scheme takes care of your credentials, eliminating the need for Pre-Qualification (PQ) criteria.
Fintech
However, in order to further boost startup growth in India, Ajit Thomas, Co-founder and CMO, of Cavli Wireless, said that the government should streamline regulatory processes, making it easier for startups to register and operate.
“Reducing bureaucratic red tape can expedite business launches. Additionally, tax incentives for early-stage startups can alleviate financial pressures. Enhancing digital infrastructure, especially in Tier-2 and Tier-3 cities, will democratize entrepreneurial opportunities. Lastly, fostering stronger academia-industry linkages can spur innovation, while dedicated startup hubs can facilitate mentorship and networking. These changes can create a more conducive environment for startups to thrive and innovate,” he added.
Ms. Bali said, “One of the standout achievements is the exponential growth in funding, reflecting investor confidence in India’s startups. Over the period from 2015 to 2022, there has been a staggering 15-fold increase in total startup funding. This infusion of capital has catalyzed innovation, enabling startups to scale and address critical challenges across various sectors.”
“The startup landscape in India has become synonymous with innovation, disruption, and boundless potential. The Indian government has paved the way for startups to thrive. These schemes provide financial support, access to resources, and opportunities for growth,” she added.
Recommendations to the Government
However, Mr. Ahlawat highlighted some specific changes to the government policies to boost the growth of startups. These include simplifying business registration processes, expanding tax incentives, improving access to finance, enhancing intellectual property protection, expanding research and development grants, investing in education and training, expanding startup incubators and accelerators, facilitating government procurement, extending support programs for SMEs, forming international collaboration partnerships, ensuring regulatory clarity, developing comprehensive data privacy regulations, introducing incentives for startups focusing on sustainability and green technologies, facilitating exit strategies, and expanding e-governance initiatives.
Garima Mitra, Co-Founder, of Treelife, also reminded that it is essential that India continues to streamline regulatory processes, improve access to capital, and enhance its education system to fully harness its innovation potential and sustain long-term economic growth.
As we look ahead, it is imperative for the government to continue its proactive approach, streamlining regulations, enhancing infrastructure, and strengthening academia-industry collaborations to ensure that the Indian startup landscape continues to shine brightly on the global stage. The future indeed holds boundless possibilities for innovation, growth, and economic prosperity in India’s startup ecosystem.
With the Economy of India badly affected due to the COVID-19 pandemic add the loss of jobs for lakhs of migrant workers during the lockdown, a scheme by the name of ‘Garib Kalyan Rozgar Abhiyan‘ or ‘Rural Job Scheme’ was launched by the Honourable Prime Minister of India, Narendra Modi in the district of Bihar on 2oth June 2020 to cope up with this problem. The scheme will support migrant workers and other rural workers by giving them jobs and livelihood support. The scheme was launched by the PM via video conferencing. The Chief Minister of Bihar, Nitish Kumar was also present at the video conference when the scheme was launched.
After the scheme was launched, Nitish Kumar informed the PM that he interacted with the migrant workers who came back to their homes in Bihar during the lockdown. He said that the workers now want to work in Bihar only and do not want to leave as migrant workers to other states. He also said that the scheme will be greatly beneficial for these workers and that it is a gift from the Central Government to them. He also promised to include these workers in other schemes of the Bihar State Government.
Prime Minister, Narendra Modi interacted with some of these migrant workers and tried to understand the problems that they are currently facing. According to Prime Minister Modi, he got the idea from migrant workers that were quarantined in a school building in Unnao, Uttar Pradesh. Instead of wasting their time, they utilized their skills and painted the whole school as an act of gratitude. The PM addressed all the migrant workers of Bihar and informed them that they will be getting jobs in their own state under the scheme, and urged them to use their talents and skills for taking their villages forward and for the overall development of Bihar.
PM Modi Launches Garib Kalyan Yojana
What Will the Garib Kalyan Rozgar Abhiyan Provide?
The scheme will provide 125 days of employment under 25 sub-schemes to the migrant workers of 116 districts. These 116 districts are spread across 6 states including Bihar. The other states are Uttar Pradesh, Rajasthan, Madhya Pradesh, Jharkhand, and Odisha. The scheme aims to provide guaranteed employment to about 6.7 million migrant workers.
The scheme will mainly focus on the development in rural areas. It will contain projects such as the building of roads, the building shelters for animals, drinking water supply, house constructions, the building of community toilets, and more in which the workers will be employed. The scheme has been launched with a budget of ₹50,000 Crores which is roughly half the budget for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), previously known as the National Rural Employment Guarantee Act (NREGA) which aims to provide 100-day employment to almost 140 million workers of rural areas. Some of the state governments have requested to increase the employment period to 150 days to provide jobs to many workers who have returned to their native places all over the country amid the lockdown. In 2021-2022 the budget of th scheme increased and become ₹98,000. In 2022, total 3.62 billion person days of work were provided. The MGNREGA has seen a sharp rise in the number of people applying for jobs since May, the reason that many people have lost their jobs due to the lockdown. The new ‘Rural Jobs Scheme’ or the ‘Garib Kalyan Rozgar Abhiyan’ will help overcome the unemployment in rural areas to a large extent. This scheme will also give a boost to the Indian economy which is currently at a standstill. It will help many workers by giving them employment in their own states.
Benefits of Garib Kalyan Rozgar Abhiyan
Some of the benefits of Garib Kalyan Roazgar Abhiyan schme are:
It will create employment opportunities for migrants.
It will create good infrastructure and the rural area will experience developement.
There are number of different works that are given to the workers according to their skill and they will have employment for 125 days.
The rural livelihood will experience a development with the help of the scheme.
FAQs
When was Garib Kalyan Rojgar Abhiyaan launched?
Garib Kalyan Rijgar Abhiyaan was launched in 20 June 2020.
Who launched Garib Kalyan Rojgar Yojana?
Prime Minister Narendra Modi launched the Garib Kalyan Rojgar Yojana.
What is Garib Kalyan Rojgar Yojana?
Garib Kalyan Rojgar Yojana is a scheme that will provide migrants and rural workers with job or livelihood for 125 days.
Human beings not only think about their present but also about their future, so it is significant to do something that will at least give them financial security and help them in growing their wealth. None of us is aware of our future, so instead of sitting quietly and doing nothing, it is better to invest in something that can at least play the role of an umbrella for us during a rainy day.
Life Insurance Corporation of India also known as LIC is the biggest life insurance company in the country. If you live in India, there is no way, you haven’t heard about LIC. This life insurance company has captured 70% of the market share and is under the Government of India. In this, we are going to talk about LIC IPO, what it exactly is and what are the things we need to know before investing in them. So, let’s get right into it.
“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” —Robert Kiyosaki
LIC IPO is LIC’s Initial Public Offering where they are offering shares of LIC as the Government has decided to sell some of its stakes. Recently LIC made headlines after submitting Draft Red Herring Prospectus (DRHP).
The Government of India has decided to sell 5% of its stake, therefore 95% stake of the company will remain under the Government. Among the public offering, 35% will be booked for the retail investors, the other 5% for the employees of LIC and 10% will be reserved for the policyholders.
Things You Need to Know Before Investing In LIC IPO
Investing in something is a very important decision that one has to take; you have been very clear and careful before doing anything related to this as it is about the financial security of your future.
As per the information, LIC policyholders who got their policy on or before the 13th of February, 2022 are eligible to invest in the 10% of public offerings that is reserved for the policyholders.
If anyone wants to be eligible in the quota for the policyholders, their PAN has to be linked with their policyholders. Those who have already linked their policyholders with their PAN on or before the 28thof February 2022 are eligible for the 10% quota.
Policyholders who have their Demat account are eligible for the 10% quota.
As 35% are reserved for retail investors, it means anyone who is not a LIC employee or a policyholder can apply to this quota. Policyholders, as well as employees of LIC, can also apply to this quota.
A retail investor is allowed to invest max to max INR 2 Lakhs, not more than that in their quota of LIC IPO.
LIC policyholders are allowed to invest INR 2 Lakhs under their quota of IPO.
LIC Employees are also eligible to invest a maximum of INR 2 Lakhs under their quota of IPO.
A policyholder who is not a LIC employee can invest a total of INR 4 Lakhs that is INR 2 Lakhs in the quota of retail category and INR 2 Lakhs in the policyholder category.
A LIC employee can invest up to INR 6 Lakhs if they are also a LIC Policyholder. It means INR 2 Lakhs under the quota of retail category, INR 2 Lakhs under the quota of policyholder category and another INR 2 Lakhs under the quota of LIC employee category.
If policyholder wants to avoid getting their application rejected under the policyholder quota, then they must ensure that they are primary Demat account holder.
If there are joint policyholders then they can apply under the policyholder’s quota, if only they have separate Demat accounts.
LIC IPO will be open to the public in the month of April 2022. The total offering is 31.6 Crore shares. It is also said that LIC employees and policyholders are eligible to get discounts on the floor price as well.
Conclusion
LIC is one of the biggest insurance companies in India founded in 1956 and is completely owned by the government. It is one of the most awaited IPOs since the launch of Zomato, Nykaa and Paytm IPO. It is expected to be one of the biggest IPO launches. People are eagerly waiting for LIC IPO so that they can invest in it.
FAQs
Who are the shareholders of LIC?
The government of India is the major shareholder and will remain the majority shareholder of LIC, only 10% is being sold to policyholders.
When will LIC IPO launch?
The LIC IPO will be open to the public on March 11, 2022.
How can I buy LIC shares?
If you’re a retail investor you can buy LIC shares using your UPI id.
Avinash kumar mahato
