businessfortnight

The COVID-19 pandemic has exposed the fallibility of the health infrastructure in the country and has served as a reminder that currently, India’s healthcare spending is at 1.29 per cent of the gross domestic product (GDP). This is much lower as compared to peer nations in the OECD and BRICS countries. According to the industry body, Confederation of Indian Industry (CII), the government must increase its investment in health, to at least 2.5-3 per cent of GDP by the year 2025 to ensure affordable healthcare.  Healthcare needs to be accompanied by digital infrastructural support such as data storage, management, processing, and security systems. In order to build a robust technology framework for healthcare, the government must consider creating the ‘Medical Innovation Fund’ for supporting companies with the capital to promote digital healthcare infrastructure. Similarly, firms should be incentivized to undertake r...

Insurance regulator, the Insurance Regulatory and Development Authority of India (Irdai), on Monday pitched standard guidelines for travel insurance with the objective of ensuring uniformity and definition about coverage, exclusions and terms of coverage for domestic as well as international travel. The new guidelines hope to make travel insurance popular with travellers. The guidance will make available a standard travel insurance product with common coverage and policy wordings across the industry, Irdai said while issuing an exposure draft on “Guidelines on Standard Travel Insurance Policy.” The exposure draft, on which the Irdai has solicited comments from the stakeholders by January 6, 2021, includes standard terms and conditions, customer information sheet and use and file format. The draft spells out the coverage and exclusions under domestic and overseas travel insurance. The insurance company will pay as compensation to the legal heirs/nominee the amount stated as sum insured ...

With apprehensions being raised in social and print media about the requirement of a mandatory cash payment of at least one per cent of the Goods and Services Tax (GST) liability, the Finance Ministry on Saturday clarified that it will affect less than half of the total assesses. On the recommendations of the GST Law Committee, the Finance Ministry has mandated this rule to curb the menace of fake invoicing and fake firms/devious fly-by-night operators who avail and pass on input tax credit (ITC) wrongfully, said a government source. Some apprehensions have been raised in social and print media that the measure of the requirement of the mandatory cash payment will adversely affect small businesses and will increase their working capital requirement, said sources in the Revenue Department. “However, the misconceptions about the measure taken are unfounded and will not affect genuine taxpayers.” Using data analytics, officials mentioned that out of the total GST base of 1.2 cr...

The government is planning to form a working group to explore the possibilities of linking Indian hospitals, wellness centres and Ayurveda clinics with foreign insurance firms to boost medical tourism in the country, Tourism Minister Prahlad Patel has said. He said the aim is to ensure that foreign nationals seeking medical treatment in India can arrive in the country with their own insurance, which would be recognised by all health centres here. “We will form a working group to explore the possibilities to enrol foreign insurance firms with Indian health centres so that people can use these for treatment here. So, when they arrive, they have their insurance in place. This will be especially helpful for those arriving from Iraq or Southeast Asian countries,” the minister told PTI in an interview. Officials also said the ministry has recommended that foreign tourists visiting India may be offered attractively priced COVID-19 insurance covers as part of the ministry’s pl...

Indian firms invested a sum of $12.25 billion under both the automatic and the approval routes in the first eight months of this year, which has been in accordance with the steady outflows witnessed in the last couple of years. In the financial year 2020-21, around $13 billion was invested by the Indian companies, which was the second successive year of double-digit overseas investment since the financial year 2013-14, according to a recent research report released by CARE Ratings. In the current financial year, Singapore, USA, British Virgin Islands, Netherlands, and Mauritius were the most preferred investment destinations of the Indian companies. These five countries accounted for almost 70 per cent of the total investment. According to the report, JSW Steel, ONGC Videsh, HCL Technologies, Haldia Petrochemicals, and Mahindra & Mahindra were the top five investors with an individual investment of more than $500 million. Furthermore, Adani Properties, Piramal Enterprises, Lupin, C...

Every individual has a different perspective on investments. An investment strategy is different for people and is based on their financial objectives. However, it is essential to know the difference between investments and expenses. Investments are nothing but an additional expenditure that allows you to secure your financial future; whereas, expenses do not provide any future gains. Understanding this difference will help you buy the correct term insurance plan. What Is Term Insurance? The term insurance plan is nothing but an insurance plan that provides coverage to the beneficiaries of the policy for a specific term. In case your (the policyholder’s) sudden dismissal during the policy term, a death benefit is paid to the beneficiaries of the policy. Term insurance plans are one of the most basic and affordable insurance options available in the market. They tend to be more flexible in nature and are cost-effective. You can also claim income tax deductions for the premiums paid un...

RBL Bank and ICICI Prudential Life Insurance entered into a bancassurance partnership on Wednesday, December 9, to offer a slew of life insurance products to customers. This alliance will enable more than 8.7 million customers of RBL Bank to access and easily purchase the customer-centric protection and long-term savings products of the firm, in order to gain financial security for themselves and their families. RBL Bank will distribute ICICI Prudential Life Insurance’s protection and savings products through its 398 bank branches spread across 28 states, besides its internet and mobile banking touch-points. Through the partnership, the entire bouquet of ICICI Prudential Life’s insurance plans on the protection and savings platform will be available for purchase to customers of the bank. ICICI Prudential Life Insurance’s protection products provide a strong foundation for a financial plan and the diversified range of long-te...

Life Insurance Corporation (LIC) of India, which offers various insurance plans like endowment plans, money back plans, term insurance plans, also offers pension plans. LIC Pradhan Mantri Vaya Vandana Yojana is one such pension plan being offered by the country’s largest life insurance company. The government has modified rate of pension for Pradhan Mantri Vaya Vandana Yojana and extended the period of sale of this plan for a further period of three years from financial year 2020-21 till March 31, 2023. As per the terms and conditions under this plan, guaranteed rates of pension for policies sold during a year will be reviewed and decided at the beginning of each year by the Ministry of Finance. For the first financial year upto March 31, 2021, the scheme will provide an assured pension of 7.40 per cent per annum payable monthly, LIC said on its website. LIC’s Pradhan Mantri Vaya Vandana Yojana provides immediate pension for senior citizens of 60 years and above. It can be p...

Atal Pension Yojana (APY) is a government-run pension scheme focused on unorganised sector workers which enables subscribers to earn a fixed monthly pension to the tune of ₹ 1,000-5,000 upon attaining retirement. The Atal Pension scheme is available at India Post branches supporting core-banking solutions. The scheme is available to those between 18 and 40 years of age at the time of subscription. A pre-defined amount is deducted from the bank account of a subscriber as contribution to the retirement corpus under the Atal Pension scheme. The amount of contribution varies depending upon factors such as the subscriber’s age and the choice of monthly pension. Eligibility: Workers in the age group of 18-40 years can enroll in the Atal Pension scheme. The applicant needs to have a savings account, in a bank or a post office. Each subscriber can only have one Atal Pension account.   Pension Amount: Currently, the Atal Pension Scheme provides five fixed monthly pension opt...

The Insurance Regulatory and Development Authority of India (IRDAI) has come out with a clarification that insurers were permitted to change the base premium up to +/- 5 per cent of originally approved premium rates, in order to comply with the guidelines on standardization of exclusions as a one time measure for seamless transition of existing products to ensure viability and sustainability, According to IRDAI, as on September 30, 2020, out of 388 products, premiums were increased by general and health insurers up to 5 per cent of the then prevailing rates only in case of 55 products. Further, the insurance regulatory authority has cleared revision in premium beyond 5 per cent in respect of only five health insurance products of general / health insurers during the year up to November 30, 2020 as part of the periodical modification of their respective products, based on the incurred claims experience.

Public Provident Fund — also known as PPF — is a popular investment scheme which offers an investment avenue with decent returns coupled with income tax benefits. PPF account holders can invest a maximum of ₹ 1.5 lakh each financial year. Also, they need to deposit a minimum of ₹ 500 in a financial year to keep the account active. A PPF account comes with a maturity period for 15 years, which means your investment is locked in for this period. Deposits can be made in lump sum or in 12 instalments. PPF deposits qualify for deduction from taxable income under Section 80C of the Income Tax Act. In terms of income tax implications, PPF qualifies for the EEE (exempt, exempt, exempt) tax category, which means an investor is not liable to pay tax at all three levels – investment, earning and withdrawal. 1. The rate of interest for PPF is determined by the central government on quarterly basis. At present it is 7.10 per cent per annum. 2. Partial withdrawal from PPF account is allowed eve...

National Pension System (NPS) is a government promoted pension/annuity scheme under which any Indian citizen between the age of 18 and 65 years can open ‘Tier I’ or ‘Tier I and Tier II both’ types of pension accounts. NPS account can also be opened by a non-resident Indian or a person with an overseas citizenship of India (OCI). However, NRI and OCI persons can only ‘Tier I’ NPS accounts. NPS accounts are managed by NPS Trust which invests in different asset classes, such as government bonds, equity market instruments and corporate debt according to preference of an investor. NSDL (National Securities Depository Limited) is the Central Recordkeeping Agency (CRA) for National Pension System (NPS). Each employee is identified by a unique number and has a separate Permanent Retirement Account Number (PRAN). An NPS account can be opened by a citizen of 18-65 years of age in two modes: online and offline. The subscriber can either apply for an NPS account ...

Securities and Exchange Board of India (SEBI) has proposed a reduction in the equity dilution requirement for initial public offers (IPOs) exceeding ₹ 10,000 crore. Companies with a post-issue capital above ₹ 10,000 crore will be required to initially sell only 5 per cent to the public, as against 10 per cent mandated earlier, the market regulator said in a consultation paper issued on Friday. The consultation paper will be open for public feedback till December 7. “It has been represented that such large issuers already have investments by PE / other strategic investors who are classified as public shareholders postlisting and therefore, mandating minimum 10 per cent of post issue MCap at the time of IPO leads to unnecessary dilution of holding of the promoter/ existing shareholder and is therefore a constraining factor for listing”, Sebi said in its consultation paper. SEBI has also proposed to increase the timeline for maintaining minimum public shareholding at 95 per cen...

The government is likely to report a current account surplus at the end of the current financial year ending in March 2021, mainly led by a fall in imports, the chief economic adviser at the ministry of finance said on Monday. India’s current account surplus rose to a record $19.8 billion in April-June as its trade deficit narrowed sharply, the Reserve Bank of India said earlier. Demand for imports has fallen amid the COVID-19 pandemic, coupled with recent economic reforms initiated by the government to boost manufacturing, Krishnamurthy Subramanian told a virtual conference organised by Confederation of Indian Industry (CII).

The beneficiaries of the Atal Beemit Vyakti Kalyan Yojana can heave a sigh of relief as the Employee State Insurance Corporation (ESIC) has announced that submitting the claim on an Affidavit form is no longer required under the scheme. The Ministry of Labour and Employment said in a statement that the ESIC has extended the scheme of Atal Beemit Vyakti Kalyan Yojana from July 1, 2020 to June 30, 2021. Apart from this, it was also decided that the rate of relief under the scheme will be enhanced from present 25 per cent of the average daily earning to 50 per cent of average daily earning. In order to provide some relief to the workers who have lost their jobs due to COVID-19, the eligibility conditions are also relaxed for the period March 24, 2020, to December 31, 2020. The decision was taken after reports of several beneficiaries facing problems in submitting the claim on the Affidavit form had recently emerged. The beneficiaries who have submitted their claims online under the Atal B...

Indian banks are loosening their purse strings and lending more as pent-up demand surfaces in the Indian festive season, though growth is still nearly half that seen last year. Several lenders including State Bank of India, the country’s largest lender and HDFC Bank, India’s most valuable bank by market capitalisation saw demand for housing and vehicle loans return to near pre-pandemic levels in the quarter ended September. “Now that the loan moratorium is over and we have a clearer view about repayments, we’re feeling more comfortable about lending both on unsecured as well as secured retail loans,” said the head of retail banking at a public sector bank, who asked not to be identified as the lender has yet to report its results. Hamstrung by the pandemic, banks had been more risk averse in lending, with credit growth slumping to around 5 per cent in the first quarter of the financial year. The uptick spells good news for the Indian economy that had contra...

Banks, financial and non-banking financial institutions have been asked to take “necessary actions” to credit into the accounts of eligible borrowers by November 5 the difference between compound and simple interest collected on loans of up to ₹ 2 crore during the moratorium scheme, RBI has told the Supreme Court. The Reserve Bank of India (RBI), in an affidavit filed through Assistant General Manager Prasanta Kumar Das, referred to the October 23 additional response of the Ministry of Finance and said the central bank has also acted in pursuance of that by issuing a notification to banks and FIs recently on refund of extra money to the borrowers. The central government had earlier told the top court that lenders have been asked to credit into the accounts of eligible borrowers the difference between compound and simple interest collected on loans of up to ₹ 2 crore during the RBI’s loan moratorium scheme by November 5. “All Primary (Urban) Cooperative Banks/Stat...

The rupee ended marginally higher at 75.53 against the US dollar on Thursday, following four days of losses. It moved in a range of 25 paise, between 73.53 and 73.78 against the greenback, having begun the day weaker at 73.77 compared to its previous close of 73.58. Selling of dollars by exporters supported the rupee, however a gain in the greenback overseas limited the upside, according to analysts.  The dollar index – which measures the US currency against six peers other than the rupee – appreciated as much as 0.34 per cent on Thursday, as market hopes for a US coronavirus aid package ahead of the presidential elections waned. Domestic share markets ended lower amid selling pressure in financial and IT stocks, tracking broader market sentiment on concerns over a setback to US stimulus talks and a spike in global COVID-19 cases. The S&P BSE Sensex index ended 0.37 per cent lower at 40,558.49 and the broader NSE Nifty 50 benchmark closed down 0....

The government has said that it will implement a loan relief scheme by November 5, aimed at helping borrowers during the coronavirus pandemic, and reimburse the interest on interest applicable to eligible loan repayments due between March and August. In guidelines on the loan relief released on Wednesday, the Department of Financial Services said the relief will be available to the borrowers regardless of whether they opted to defer their EMIs, either fully or partially. The government said lending institutions will first credit the amount – the difference between compound interest and simple interest for the six-month period – on eligible loans up to ₹ 2 crore, which will be reimbursed by the government as part of the scheme. According to operational guidelines issued by Department of Financial Services, the scheme can be availed by borrowers in specified loan accounts for a period from March 1 to August 31, 2020. The relief on compound interest will be applicable to standa...

Bajaj Finance on Wednesday reported a net profit of ₹ 964.88 crore in the July-September period, marking a fall of 35.94 per cent compared to the corresponding period a year ago. In a regulatory filing, the non-banking financial company said its total income came in at Rs 6,523.29 crore in the second quarter of current financial year, up 3.17 per cent from the year-ago period. Shares in Bajaj Finance ended 0.88 per cent lower at Rs 3,233.25 apiece on the BSE, having declined as much as 4.92 per cent after the announcement during the session.    Pune-based Bajaj Finance said the coronavirus pandemic, which has affected several countries including India, and the consequent lockdown has considerably impacted its group business operations in the April-September period. The pandemic has also resulted in a significantly lower business acquisition and put constraints on recovery of overdues from customers, the company said. Net interest income – a ...