Security of lending in India drastically improved after Covid-19 lockdowns
Indian farmers, traders and vendors negotiate prices of vegetables at a wholesale vegetable market in Hyderabad - AFP
Question: Small businessmen and micro units are finding it difficult to receive loans though the government has been announcing schemes for providing credit. Is there any progress on this front?
Answer: An account aggregator platform has been set up to facilitate banking for micro, small and medium enterprises. This would enable customers of one bank to avail financial services from another bank or a non banking finance company. Under this system, the transaction history of each borrower would be made available which would enable credit facilities to flow seamlessly to small businesses. This pilot model is being replicated in different regions around the country with a view to promote digital banking. As a result, it is expected that cost effective services will become available to small enterprises. The Finance Minister has directed banks and non-banking finance companies to lend and provide credit facilities in view of the fact that during the first half of the current financial year a record profit of Rs790 billion has been made by this sector. Hence, the security of lending has improved drastically after the Covid lockdown period.
Question: My son has just completed his Masters in Computer Engineering. Are there any prospects for him to apply for employment with well known Indian companies?
Answer: There has been a record increase in employment for freshly graduated engineers. Top Information Technology companies are having a substantially higher target for employing freshers during the current financial year ending March 31, 2022. This is on account of two factors: a rising attrition rate at the mid-level at IT companies, and a growth in digitisation projects. Further, these companies are paying handsomely to those freshers who have specialised skills. Already, a quarter of a million fresh graduates have been hired during the nine months of the current financial year. Most research firms have come to the conclusion that the information technology industry is likely to achieve the best ever revenue growth in the next financial year ending March 31, 2023, and the workforce will increase substantially. Many young engineers are having the option to choose from more than one offer of employment. Therefore, a talented fresher would have no difficulty in finding a job in India in the IT industry. However, to retain the job and improve promotion prospects, it will be necessary to constantly endeavour to reskill and upskill so as to keep abreast of the evolving technology landscape.
Question: Audit firms are under the scanner as some companies have balance sheets which have raised doubts and do not adhere to international reporting standards. This has shaken the confidence of investors. Are any steps being taken to tighten the regulatory framework?
Answer: At present, a single firm of chartered accountants can be appointed by a large company to undertake the annual statutory audit. The Ministry of Corporate Affairs is proposing to introduce legislation which would make it mandatory for a joint audit to be conducted by two firms of chartered accountants. This would be so in the case of all companies listed on stock exchanges in India. It may also apply to unlisted companies having a paid-up capital of over Rs5 billion or turnover of over Rs10 billion. All insurance companies, banks, power generation and distribution companies and other notified entities will be monitored by the National and Financial Reporting Agency. Currently, this agency supervises the functioning of 6,820 companies and their audit firms. It is also proposed that audit firms will not be permitted to undertake any non-audit work. This would ensure their complete independence as they would not have any pecuniary interest in the company.
— H. P. Ranina is a practicing lawyer, specialising in tax and exchange management laws of India.