Here is short summary of what happened this week in business in India
1. GST compensation is delayed in some states.
GST compensation is a provision in the GST law that guarantees states a 14% growth in their GST revenue for the first five years of GST implementation, until 202212. It is paid out of a cess levied on sin and luxury goods13. However, due to the economic slowdown and the pandemic, GST and cess collections have fallen short of the required amount34, resulting in delayed payments to some states
2. India will need 2,210 new planes over 2 decades
Boeing said that India will require around 2,210 new planes in the next two decades, mainly driven by the rising domestic air traffic. Out of them, 1,983 units will be single-aisle jets while 227 units will be wide-body airplanes12. Boeing also projected a nearly 7 percent annual domestic air traffic growth through 2041.
One of the reasons why India needs so many new planes is because of its economic growth, evolving business models, and the dynamics in the marketplace. Another reason is because of the rapid growth of its domestic traffic, which accounts for 90 percent of new airplane deliveries to India.
3. Adani Group firms fall for 2nd day running
Shares of Adani Group firms fell for the second day on Tuesday amid negative events surrounding the companies. Adani Enterprises dropped 4.89% to Rs 1,633.55 on the BSE.
Some of the group firms also touched their lower circuit levels, such as Adani Power, Adani Transmission, Adani Green Energy, and Adani Total Gas.
The reasons for the fall include a probe by SEBI into alleged foreign portfolio investors (FPIs) holding stakes in Adani Group firms, a report by The Guardian that claimed that Adani Group has links to Myanmar’s military junta, and a legal challenge by environmental groups against Adani’s coal mine project in Australia.
4. Union Budget 2023 changes to benefit startups
Union Budget 2023 proposed a change to Section 79 of the Income Tax Act, 1961, that will benefit startups. The change extends the period for eligible startups to carry forward and set off losses incurred in the first 10 years of their incorporation, instead of 7 years as before.
The change also extends the period of incorporation of startups eligible to avail of tax incentives by one more year, up to March 31, 2023. The tax incentives include a deduction of 100% of profits for three consecutive assessment years out of ten years.
5. Funding news-roundup
Indian startups raised $1.2 billion in January 2023, with PhonePe and KreditBee leading the funding rounds, here is a quick summary:
PhonePe, a digital payments platform, raised $350 million from existing investors at a valuation of $5.5 billion23.
KreditBee, a fintech startup that offers personal loans to young professionals, raised $120 million from investors including Premji Invest and Mirae Asset Naver Asia Growth Fund23.
These two funding rounds accounted for nearly 40% of the overall financing in January 13.
E-commerce (including D2C startups) segment saw more deals and fintech continued to dominate with $587 million in total funding
Thank You, See you next week!