Business News at 09:30 am on 2nd March 2023

Let’s begin. The Securities and Exchange Board of India has started asking for details of senior managing officials of foreign portfolio investors on a look-through basis for fresh registrations, a move that could hit such registrations in the country. The regulator is keen on knowing the SMOs of the parent entity of the investor and not just the FPI. Till now, the look-through principle was applied for the identification of beneficial ownership on the basis of ownership and control and not the SMO. An SMO is an individual/s designated by the FPI who holds a senior management position and makes key decisions related to the FPI. Given the probable reluctance of investors worldwide to give the SMO information on a look-through basis, this move could have a dampening impact on FPI registrations that have been gaining traction in the past couple of years. The registration process usually takes around two-three months. Meanwhile, The goods and services tax collection stood at Rs 1.49 trillion in February, about 5% lower than the Rs 1.56 trillion collected in the preceding month. However, the collections are in line with the average monthly collection of Rs 1.5 trillion, indicating stabilisation in the indirect tax levy as well as normalisation of economic activities, and were aided partly by higher inflation. According to data released by the finance ministry on Wednesday, of the gross GST revenue collected in February, while the central GST was Rs 27,662 crore, state GST was Rs 34,915 crore, integrated GST Rs 75,069 crore, and cess Rs 11,931 crore. February’s mop-up also indicates that the Centre is on track to meet its targeted revenue from the levy this fiscal. With a recovery in economic activities and higher than expected nominal growth, the government has hiked the GST target for the current fiscal to `8.54 trillion in the revised estimate from `7.8 trillion, which was initially budgeted. Moving on. Bill Gates while delivering the Fifth Ramnath Goenka Memorial Lecture in New Delhi on Wednesday said that with its record of vaccine development and digital public infrastructure platform, India has the potential to develop into a hub of “innovation and ingenuity”, to herald a “new era of global partnership” which can overcome the world’s greatest challenges. gates also underlined the power of innovation to bridge divides and the role of India in the “big, global innovation boom”. When it comes to overcoming the world’s greatest challenges like climate change or healthcare, India has a significant role to play, Gates said, flagging the country’s low-cost innovations like the rotavirus vaccine that saved lives globally, and affordable solutions like making biofuels and fertilisers from waste to address climate change. On to economy. The manufacturing sector grew at the slowest pace in four months in February but remained relatively strong due to buoyant domestic demand. This was despite higher inflationary pressures and weaker international sales. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index eased just a tad to 55.3 in February from 55.4 in the previous month, signalling a strong improvement in the health of the sector. The headline figure was also above its long-run average of 53.7. An index reading of 50 or above suggests expansion and below it points to contraction. With this, the index has remained in the expansionary zone for the 20th straight month. In some more economy news, Joblessness as measured by the CMIE All India unemployment rate remained elevated in February 2023 and rose to 7.45% from 7.14% in the previous month. Urban unemployment rate decreased for the second straight month and was at 7.93% in February as against 8.55% in January. It had touched a record high of 10.09% in December 2022. But more worrying the rural unemployment rate spiked to 7.23% last month from 6.48% in January. Mahesh Vyas, Managing Director and CEO, Centre for Monitoring Indian Economy however, said that it is important to note that the labour participation has increased at the same time from 39.8% to 39.92%. Lastly, over to industry. The Indian technology sector is set to reach $245 billion in FY23, despite the global headwinds. While there is a “cautious optimism” for Financial Year 24, the industry is on track to hit $500 billion by 2030, according to estimates by industry apex body Nasscom. The growth in Financial Year 23 reflects an incremental net revenue addition estimated at $19 billion. The current financial year has been one of steady growth, even though it reported a 2% cross-currency impact. The growth has been across segments of IT services, business process management, software products, engineering research & development and domestic market, Nasscom said in its Strategic Review 2023.