Ministry of Finance
Rs 1,04,963 crore of gross GST Revenue collected in the month of November 2020
The gross GST revenue collected in the month of November, 2020 is ₹ 1,04,963 crore of which CGST is ₹ 19,189 crore, SGST is ₹ 25,540 crore, IGST is ₹ 51,992 crore (including
₹ 22,078 crore collected on import of goods) and Cess is ₹ 8,242crore (including ₹ 809 crore collected on import of goods). The total number of GSTR-3B Returns filed for the month of November up to 30th November 2020 is 82 lakhs.
The government has settled ₹ 22,293 crore to CGST and ₹ 16,286 crore to SGST from IGST as regular settlement. The total revenue earned by Central Government and the State Governments after regular settlement in the month of November 2020 is ₹ 41,482 crore for CGST and ₹ 41,826 crore for the SGST.
In line with the recent trend of recovery in the GST revenues, the revenues for the month of November 2020 are 1.4% higher than the GST revenues in the same month last year. During the month, revenues from import of goods was 4.9% higher and the revenues from domestic transaction (including import of services) are 0.5% higher that the revenues from these sources during the same month last year.
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Issuance of Class 2 DSC will get Discontinued from 01/01/2021
After 01/01/2021 Class 2 DSC cannot be purchased or renewed. Class 3 DSC will be valid for all (Government departments GST, Income tax, PF, ROC, tenders etc)
*BUT* Existing Class 2 DSC will be valid for usage.Even if your Class DSC 2 is getting expired after 01/01/2021 It is recommended to buy new Class 2 DSC before 01/01/2021.
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⚫GST collection stood at Rs 1.049 trillion in November. This is also the third straight month when GST collection rose YoY, indicating the reinstatement of normalcy in economic activity after months of disruption caused by the Covid-19 lockdown.
⚫The growing domestic handset manufacturing market and supportive policies by Govt have ensured that India steadily builds on its device manufacturing capabilities, and the addressable market for original equipment manufacturers is expected to be about Rs 10-11 lakh crore by 2025.
⚫The RBI monetary policy committee is expected to leave interest rates unchanged when it meets on Friday, after data showing the economy contracting less than expected and persistently high inflation.
⚫Unified Payments Interface, the flagship payments platform of the National Payments Corporation of India, recorded over two billion transactions for the second time in a row in November, indicating that the general population has taken to digital payments as more of a way of life.
⚫Airlines have witnessed a drop of up to 20% in bookings on Goa Mumbai, Delhi Mumbai and other routes days after Maharashtra Govt introduced mandatory RT-PCR tests for passengers from four states.
⚫Talks between farmers groups and the Centre to break the deadlock over the agricultural Acts remained inconclusive, with both sides deciding to meet again on Dec 3.
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NPAs: Prevention Is Better Than Cure
The large and increasing levels of non-performing assets (NPAs) of the Indian banking industry, especially of the public sector banks (PSBs) has been dominating headlines for quite some time now and there seems to be no end to this saga.
Gross NPA to total assets ratio (GNPA Ratio), one of the key tools of measuring NPA levels of the Indian banking industry (i.e. their efficiency) stood at about 8.5% at the end of March 2020 (11.3% for PSBs and 4.2% for private banks), and is expected to increase to a level of around 14% by March 2021.
To put these NPA levels in perspective, we need to appreciate that any bank with a GNPA ratio of say over 3-4% is essentially making operating losses. Incidences of bad loans are essential to the trial and error process required for development and are normal in dynamic financial markets, i.e. some amount of occurrence of NPAs is natural and expected in the banking business. However, the margin of error that banks can tolerate is very low.
As JD Von Pischke has very succinctly put, "Experience has shown that bad loans amounting to 3% of loan portfolios can give commercial banks and their government regulators major cause for indigestion."
The situation with which we are blissfully living is that some of our public sector unit (PSU) banks have NPA levels of over 20%. With abysmal recovery rates most of these NPAs would have to be written off against capital. Therefore, banks with such high NPA levels would effectively have negative networth if the promoter, the government of India, had not infused fresh capital at regular intervals (Rs4 lakh crore over the last 10 years).
This is being funded by the poor Indian tax-payer, who in return gets indifferent service, negative real interest rates on deposits, higher levels of interest rates on loans, and lower levels of economic growth compared to the potential.
To manage and contain the NPA problem, academicians, policy makers, the Reserve Bank of India (RBI) and the government have come up with a virtual alphabet soup of schemes over the last 40 years. This includes, sick industrial companies act (SICA), the board for industrial and financial reconstruction (BIFR), the securitisation and reconstruction of financial assets and enforcement of security interest (SARFAESI), debts recovery tribunals (DRTs), corporate debt restructuring (CDR), special drawing rights (SDR), 5/25 mechanism, joint lenders' forum (JLF), scheme for sustainable structuring of stressed assets (S4A) -- to name some, the Insolvency & Bankruptcy Code (IBC) being the latest “magic wand” to address this gargantuan problem.
The moot point is that all of them aim at resolving NPAs and not one of them is designed to ensure that the incidences of NPAs are controlled.
One of the key functions of banks is to continuously produce good quality loans and advances or loans, which have a low probability of default. From this perspective, the incidence of high and growing levels of NPAs in the Indian banking system is akin to a manufacturing organisation making a larger than acceptable level of defective products.
A manufacturing organisation sets up quality control systems to ensure production of goods of consistently high quality. This analogy suggests that there is something wrong in the systems and processes for appraisal, structuring, sanction, and monitoring of loans by our banking system.
The production process used by banks to ensure that consistently good quality loans are made consists of making a series of judgments or decisions for which banks need to have a governance mechanism, which engenders independent and professional decision making and an appropriate conceptual framework for lending.
Both these aspects have been severely hit by the pervasive micro-management practised by the department of financial services (DOFS) and the RBI. Having nearly 70% of our banking system in the public sector also does not help. The vitality of our financial markets has got sapped due to the virtual absence of creativity and innovation on account of lack of competition.
The closed, one-size-fits-all framework for recruitment, promotions, pay-scales, to the identical core banking system has left little room for experimentation and innovation, or growth. After all, only open systems can hope to achieve negative entropy!
Governance of our banks has been going from bad to worse over the last few decades.
For the political class, irrespective of persuasion or ideology, PSBs are meant to be milked – for giving cheap loans (before waiving them off) to favoured constituents, which keeps the controllers of the mass vote market in good humour, for enabling generous funding of the friendly corporate sector which in turn lubricates the political machinery through donations (now made easier and opaque through use of electoral bonds), and for pump priming the economy in the absence of sufficient fiscal space.
Public sector does not automatically mean lack of professionalism and accountability, provided governance systems enable and nurture it. The pervasive interference of DOFS and MOF with its natural consequence of politicisation of decision making and development of highly patronising relationship between bank management and government bureaucrats needs to be addressed forthwith.
In the process, professionalism in our PSBs is as good as dead with PSB boards not considered competent enough to select their top managers, leave alone other professional and competent members on the board.
The conceptual framework under which most lending is done in India evolved when banks primarily lent for trade. This “need based lending” limits assessment extensively evolved as a credit rationing device, and not as a credit risk assessment mechanism. Consequently, both debt and equity risk are embedded in the loan portfolios of our banks, while the pricing is wholly linked to debt risk. This naturally leads to a sub-optimally priced loan portfolio, in other words, steady occurrence of NPAs.
There are other contributing factors too. For example, the amount of time and effort spent on ensuring end-use of borrowed funds. One of the prime reasons that money (or credit) is useful is because of its property of fungibility. This makes ensuring “end-use” very tricky.
The strongly held belief that since bank liabilities are short term, they should make only short term loans is also misguided and illogical. First, this hides the fact that managing and profiting from maturity mismatches between deposits and advances is a prime function of financial intermediaries.
Second, most borrowers need both the long-term and short-term borrowings to continue as going concerns. If a bank tries to collect all its short term-term lending, the borrower is unlikely to remain a going concern and the primary security available to the bank goes for a toss.
Succour lies in addressing the broken governance systems. The focus on managing NPAs after the loans have started souring is akin to closing the stable doors after the horse has bolted
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👉🏻GST Revenue collected in November crosses 1 Lakh Cr
(The gross GST revenue collected in the month of November, 2020 is Rs. 1,04,963 Cr, total number of GSTR-3B Returns filed for the month of Nov. is 82 lakhs)
👇🏻 👇🏻 👇🏻
https://bit.ly/3luK2fd
👉🏻UDIN - CBDT to validate UDIN at the time of upload of Tax Audit Reports
(CBDT to validate UDIN generated from ICAI portal at the time of upload of Tax Audit Reports)
👇🏻 👇🏻 👇🏻
https://bit.ly/3qj1kiW
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