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Finance minister <keyword id="2464899" type="General" weightage="80" keywordseo="niramala-sitharaman" source="Orion">Niramala Sitharaman</keyword> is scheduled to meet managing directors of public sector banks (PSBs) on March 25 for a performance review against the backdrop of the failure of a few banks in the US and the liquidity crisis faced by Credit Suisse. The meeting is going to take stock of the progress made by banks in achieving targets set for the various government schemes, including <keyword id="6362618" type="General" weightage="80" keywordseo="kisan-credit-card" source="Orion">Kisan Credit Card</keyword> (KCC), Stand-Up India, <keyword id="2746650" type="General" weightage="80" keywordseo="pradhan-mantri-mudra-yojana" source="Orion">Pradhan Mantri Mudra Yojana</keyword> (<keyword id="2938130" type="General" weightage="80" keywordseo="pmmy" source="Orion">PMMY</keyword>), and emergency credit line guarantee scheme (ECLGS) to help businesses affected by Covid-19, according to sources. This is the first full review meeting after the presentation of Budget 2023-24 and banks would be asked to focus on the areas highlighted by the Budget including credit flow to productive sectors. The finance minister would review credit growth, asset quality, and capital raising and business growth plan of banks for the next financial year, the sources said, adding non-performing assets (NPAs) of Rs 100 crore and the recovery status would also be discussed. The meeting comes against the backdrop of global concern over the failure of banks due to aggressive monetary tightening. The <keyword id="117388" type="General" weightage="80" keywordseo="us-fed" source="Orion">US Fed</keyword> on Wednesday hiked interest rates by 25 basis points to tame high inflation despite the banking crisis. To fight the persistent hot inflation, the Fed has so far increased rates from zero to 4.75 to 5 per cent, all in just one year. Meanwhile, policymakers and experts have said that the Indian banking system is in good shape and can handle the situation caused due to monetary tightening. Various reforms undertaken by the government have resulted in significant improvement in the asset quality of public sector banks with the gross NPA ratio declining from the peak of 14.6 per cent in March 2018 to 5.53 per cent in December 2022. All PSBs are in profit with an aggregate profit of Rs 66,543 crore in 2021-22, and that further increased to Rs 70,167 crore in the first nine months of the current financial year. At the same time, resilience has increased with the provision coverage ratio of PSBs rising from 46 per cent to 89.9 per cent in December 2022. The capital adequacy ratio of PSBs improved significantly from 11.5 per cent in March 2015 to 14.5 per cent in December 2022. The total market capitalisation of PSBs (excluding IDBI Bank, which was categorised as a private sector bank in January 2019) increased from Rs 4.52 lakh crore in March 2018 to Rs 10.63 lakh crore in December 2022, he said. The government implemented a comprehensive 4R strategy of Recognising NPAs transparently, Resolution and recovery, Recapitalising PSBs, and Reforms in the financial ecosystem. Major banking reforms undertaken by the government over the last eight years ensured credit discipline, responsible lending and improved governance, besides the adoption of technology, amalgamation of banks, and maintaining general confidence of bankers. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/former-idbi-gm-conspired-with-vijay-mallya-over-short-term-loan-to-kingfisher-airlines-cbi/articleshow/98936880.cms">Former IDBI GM conspired with Vijay Mallya over short term loan to Kingfisher Airlines: CBI</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/nothing-ear-2-price-specifications-and-availability/articleshow/98936986.cms">Nothing Ear (2) earbuds with ANC and personalized sound profiles launched in India</a>

FM Nirmala Sitharaman likely to meet PSU banks heads on Saturday

The government expects the value of the bilateral trade between India and <keyword id="5891" type="ORGANIZATION" weightage="20" keywordseo="ASEAN">ASEAN</keyword> countries to reach $100 billion by 2015. 
	 While speaking at the 2nd India – CLMV Business Conclave, Minister of State for Commerce &amp; Industry <keyword id="129243" type="PERSON" weightage="20" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword> said: “In 2009, the Free Trade Agreement (<keyword id="6381659" type="ORGANIZATION" weightage="20" keywordseo="fta">FTA</keyword>) on goods had been signed (with ASEAN) and because of that and through that trade between ASEAN and India have been reaching about USD 80 billion level. We hope by 2015 it will touch $100 billion and get doubled by 2022. So there is lot of work, there is a lot of scope.” 
	 
	The event was organised in order to discuss ways to boost trade with Cambodia, Laos, Myanmar and Vietnam (CLMV). “India’s Look East Policy has become very sharp focussed and that there is a need for greater and accelerated engagement across the globe with East Asia,” the minister further added. 
	 
	Pointing out the key areas where mutual investments could be made, Sitharaman asserted that sectors such as skill development, agricultural products, manufacturing, project exports and energy had potential for the trade to grow. 
	 “We are very keen to open up the north-east part of India; open up the economy, improve on its connectivity with the rest of the East and therefore look at India’s North-East as threshold to our <keyword id="842484" type="UNKNOWN" weightage="20" keywordseo="Act-East-policy">Act East Policy</keyword>. Commerce, Culture and Connectivity” are the three pillars of India’s engagement with the CLMV countries,” emphasised Sitharaman. 
	 
	Currently, the total trade value between India and ASEAN stands at $80 billion. However, CLMV trade is still low and is focused on a few specific products. The Union minister said that the government is focused on improving its trade with the four countries. 
	 
	“At present, 70-80% of India-CLMV trade is centred on only a few products. I think there is a scope to expand the basket and bring in more commodities and manufactured goods into it. The government has accorded high priority to economic engagements with the four countries, and is working towards establishing seamless physical connectivity with the region,” averred Niramala Sitharaman. 
	 
	The trade between India and CLMV countries is pegged at $13 billion in 2013-14, primarily with Vietnam.

India Expects Trade With ASEAN To Reach $100 Billion

New Delhi, Feb 1 () Finance Minister Niramala Sitharaman on Saturday proposed easing of tax payments for startups with a view to promote growth of budding entrepreneurs.
"In order to give a boost to startup ecosystem, I propose to ease the burden of taxation on the employees by deferring the tax payment by five years or till they leave the company or when they sell, whichever is earliest," she said while presenting the Union Budget for 2020-21.
ESOP (employee stock option plan) is a significant component of compensation for these employees, she said.
 Currently, ESOPs are taxable.
"This leads to cash flow problem for the employees who do not sell their shares immediately and continue to hold the same for long term," the minister said.
She said startups have emerged as an engine of growth for India's economy and over the past year, the government has taken several measures to handhold them and support their growth.
During their formative years, startups generally use ESOPs to attract and retain highly talented employees, she added.
Further, the minister said that an eligible startup having a turnover of up to Rs 25 crore is allowed a deduction of 100 per cent of its profits for three consecutive assessment years out of 7 years, if the total turnover does not exceed Rs 25 crore.
"In order to extend this benefit to larger startups also, I propose to increase the turnover limit from existing Rs 25 crore to 100 crore.
"Moreover considering the fact that in the initial years, a startup may not have adequate profit to avail this deduction, I propose to extend the period of eligibility for claim of deduction from the existing 7 years to 10 years," Sitharaman said. RR
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Govt proposes easing of tax payments for startups

<ul><li>The government taxes capital gains from unlisted firms at 20%, whereas the same is taxed at 10% for listed firms.</li><li>Even though the government of India introduced <keyword id="6406536" type="General" weightage="20" keywordseo="angel-tax" source="Orion">Angel Tax</keyword> exemption nearly three years ago, conditions around it continue to be tough.</li><li>Meanwhile, an angel investor needs a networth of at least ₹2 crore before they can start investing formally.</li></ul>Investors like Tiger Global, Accel and SoftBank turned a startup into a billion dollar enterprise at an average of one every eight days in 2021. Industry insiders argue that the new year could see a lot more money than the $42 billion raised by Indian <keyword id="6362513" type="General" weightage="20" keywordseo="startups" source="Orion">startups</keyword> last year, if the government would fix some of the anomalies in taxation, processes and regulations. A unicorn, in startup parlance, is a company veiled at over a billion dollars. And there were <a href="https://www.businessinsider.in/business/startups/news/2021-indias-year-of-the-unicorn-and-its-many-high-points/slidelist/88528773.cms">44 of them in 2021</a>, taking the total tally to 81. <div type="image" title="Anomalies that need to be fixed in India’s startup regulations" msid="88899824" hostid="261"></div> The regulatory clamp down on similar segments in China helped the valuations of Indian startups last year. However, India still has a long way to go before its startups and venture capital ecosystem can scale up to the level of China. And, this is where change in rules and regulations can help. Prime Minister <keyword id="6354477" type="General" weightage="20" keywordseo="narendra-modi" source="Orion">Narendra Modi</keyword> would be interacting with<a href="https://www.pib.gov.in/PressReleasePage.aspx?PRID=1789909"> 150 startups from multiple domains</a> — agriculture, health, enterprise, space and more — today (January 15) at 10:30 am. Ahead of the upcoming <keyword id="10547300" type="General" weightage="20" keywordseo="budget-2022" source="Orion">budget 2022</keyword> on February 1, Business Insider spoke to a bunch of industry participants to understand what are the fixes they would like to see sooner than later. These are the top takeaways. “Investors cannot be taxed more for taking higher risk” The government taxes capital gains from unlisted firms at 20%, whereas the same is taxed at 10% for listed firms. This is too high, says Devender Agrawal of Dexter Capital. The disparity in the capital gains tax between on investment in listed and unlisted has pushed more angel investors and early-stage investors into the shell. Sadly, Indian startups — or rather investors’ community — has been recalling this out for the last two years but no action has been taken so far. TV Mohandas Pai, along with a few startup entrepreneurs, had raised the issue before finance minister Niramala Sitharaman two years ago. “Equity investments in unlisted firms carry higher risk due to lack of liquidity and lack of proper price discovery. Investors cannot be taxed more for taking a higher risk,” Pai was <a href="https://economictimes.indiatimes.com/news/economy/policy/government-needs-to-clarify-on-angel-tax-exemption-tax-capital-gains-alike-mohandas-pai/articleshow/71220477.cms?from=mdr">quoted</a> as saying by Economic Times in 2019. Despite Sitharaman’s assurance there have been no updates in this regard so far. To get away with Angel Tax one has to give up a lot Angel tax is an income tax imposed on funds raised by a company from wealthy individuals called the ‘Angels’. The tax of 30% is imposed on the premium paid for the shares of the unlisted company over and above the fair market value (FMV). In 2019, the government of India decided to offer Angel Tax exemption to companies provided they met a set criteria. But it’s not an easy set of requirements. They define everything from how the startup is valued to how the funds are used, and both founders and investors hope that some of these would be relaxed. Condition set forward to apply for Angel Tax exemption <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Restrictions/Conditions </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Timeline </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Demand </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Startups cannot invest in land or buildings, shares and securities, capital of other entities, mode of transportation over ₹10 lakh. </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Seven years from latest fiscal year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">No restricted end-use for assets </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">No loans or advances should be extending, unless lending is ordinary course of business (Includes advance salary to employees) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Seven years from latest fiscal year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Lending could be an option. </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Paid up capital should not exceed ₹25 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 10 years from the year of incorporation. </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">The monetary limit could be extended to ₹ 50 crore or ₹75 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Startup valuation is determined by net asset value (NAV) method, which is the next value of an entity. </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">N/A </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Valuation should be determined by future earnings through the Discounted Cash Flow (DCF) method. </td></tr></tbody></table> Over 3,600 startups were considered eligible for the exemption between August 27, 2019, to February 3, 2021. This would be a small fraction of the estimated 60,000 startups in the country. The restriction on deployment on funds is not just intended for funds raised from Angel investors, but the capital subsequently raised from venture capitalist or venture capital fund. Failure to meet these restrictions would lead to a 200% penalty on such an amount. “Even though the intent of the government to prevent misuse and abuse of the provisions is understandable, relaxation of certain conditions and bringing the timeline down would go a long way in ensuring that the genuine start-ups are not affected by the regulations,” Divakar Vijayasarathy of DVS Advisors LLP <a href="https://www.outlookindia.com/outlookmoney/tax/angel-tax-in-india-everything-you-need-to-know-7668">says</a>. Some leniency can produce more ‘angels’ If there is one thing that is common in the issues raised above, it is the involvement of angel investors. Up until a year ago, very limited individuals were willing to risk their personal assets to be part of a startup that may ‘make it or break it’. The number of angel investors in India have<a href="https://timesofindia.indiatimes.com/business/india-business/angel-investors-turn-younger-founders-more-seasoned-in-21/articleshow/88719436.cms"> grown 10X</a> thanks to 2021 and the startup boom. But there are more who would be willing to join the bandwagon and ignoring them would not be a great idea, Gaurav VK Singhvi of We Founder Circles believes. However, SEBI may be getting a tad bit too demanding with its angel investors. An Angel investor must have a net tangible asset of at least ₹2 crore, excluding the value of their principal residence. An early stage investment experience, serial entrepreneurship and 10 years of work experience as a senior executive may come in handy too. The said investor, in case investing through an angel fund, needs to commit ₹25 lakh rupees over a period of three years. “Now if I [angel investor] wants to invest in four startups of four different funds [Angel Funds], I need to commit ₹25 lakh to each of these funds. I have to commit ₹1 crore to four startups whereas I will be only investing ₹3-5 lakh in each startup.That interchangeability is required,” Singhvi added. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Requirement </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Demand </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Why change is needed </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Minimum net worth of ₹ 2 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Reduction of networth </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Young working professional will not be able to fulfill this requirement </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Need to commit ₹25 lakh to an angel fund </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">The commitment should be reduced to ₹10 lakh and one should be able to commit this amount across angel funds, instead of focusing on one </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Investing ₹25 lakh is capital intensive and it becomes an issue if one has to commit at least ₹25 lakh in multiple funds to grab deals they prefer. </td></tr></tbody></table> “India has become the third largest ecosystem for startups and will be a key segment to make India a $3 trillion economy. With an enormous amount of capital flowing in Indian startups, the government needs to focus on higher ease of business, for both investors and startups,” Ankur Bansal of Blacksoil says. The Indian startup ecosystem has finally come of age and it will no longer have a passing mention in India’s union budget, Anil Joshi of early-stage investment firm Unicorn India Ventures tells Business Insider. SEE ALSO <a class="tout-title-link" href="https://www.businessinsider.in/stock-market/news/reliance-industries-hdfc-bank-mindtree-vodafone-idea-and-other-hot-stocks-on-january-14/slidelist/88888740.cms">Reliance Industries, HDFC Bank, Mindtree, Vodafone Idea and other hot stocks on January 14</a> <a href="https://www.businessinsider.in/politics/world/news/russia-warns-it-will-sever-ties-with-the-us-if-it-sanctions-putin-over-ukraine-crisis/articleshow/88884832.cms" data-type="tilCustomLink">Russia warns it will sever ties with the US if it sanctions Putin over Ukraine crisis</a> <a href="https://www.businessinsider.in/science/health/news/yes-cats-can-get-covid-19-but-theyre-unlikely-to-become-seriously-ill/articleshow/88887140.cms" data-type="tilCustomLink">Yes, cats can get COVID-19, but they're unlikely to become seriously ill</a>

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FM Nirmala Sitharaman likely to meet PSU banks heads on Saturday

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India Expects Trade With ASEAN To Reach $100 Billion

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Govt proposes easing of tax payments for startups

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Anomalies that need to be fixed in India’s startup regulations

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