Budget 2022-23 presented by Hon’ble Finance Minister, Smt. Nirmala Sitaraman brought in micro level integral changes to promote macro level economic growth and welfare.
To quote Hon’ble FM, “We are involving minimum government for maximum governance” and thus, highlights the strong commitment of country towards their trust-based governance for ease of doing business 2.0 in their advent of 25-year Independent India plan of ‘Amrit Kaal’. This is prima facie evident by the repeal of 1,486 union laws and striking off over 25,000 compliances.
Apart from these, the major highlights in legal arena which can be used by businesses or even individuals are:
Single window portal ‘PARIVESH’ to be expanded
Pro-Active Responsive facilitation by Interactive and Virtuous Environmental Single Window Hub (Parivesh) is an integrated window developed and launched in 2018 for online submission and monitoring of the proposals submitted by the proponents for seeking Environment, Forest, Wildlife and CRZ Clearances from Central, State and district level authorities. It not only automates the entire mechanism of online submission of proposals, edits and update of details, it also allows tracking of same and display status of each stage of work flow. This has increased transparency, flexibility and efficiency and minimized delays.
Environment Impact Assessment has become a mandate for all big businesses falling in the categories so specified by the Environment Protection Act, 1986. Parivesh is the integrated platform which drastically has improved the entire process of appraisal
and environmental clearance in the Ministry.
The expansion of this portal will enable application for all four green approvals through a single form, and tracking of the process through Centralized Processing Centre-Green (CPC-Green) and thus, the businesses are likely to have an integrated one-step platform without the hassles.
Unique land parcel identification number (ULPIN)
ULPIN shall be a 14-digit identification number issued to every plot/land in country. Being called as ‘Aadhar for land’, the scheme aims to uniquely identifies every surveyed parcel of land and prevent land fraud, especially in rural India, where land records are outdated and disputed. The government has paid heavy reliance upon infrastructure and real estate in India lately and has been aiming to lay off the heavy burden upon judiciary which is clogged with land disputes.
Back in 2021, the NITI Aayog drafted model bill to guarantee the accuracy of land titles and provide compensation in case of disputes which required linking of details of landowners to those digital records and establish tribunals to resolve all outstanding cases within 3 years. The National Generic Document Registration System (NGDRS) is a ‘One-Nation One-Registration Software’ administered by Department of land resources and it is promoted as an option for uniform process for registration digitally anywhere for registration of deeds and documents.
Government procurement to be eased
Measures of using band-guarantees as a mode for government procurement not only hindered the transparency, enhanced the delay of payments but also put forth additional burden of indirect costs for suppliers and contractors. With the advent of digital era, the government too has stepped into a completely paperless, end-to-end online e-Bill System that can be used for all Central ministries for their procurements. These bills will be digitally signed by contractors (as these signatures has already found its validity under the Information Technology Act, 2000) and the same could be tracked digitally and thus, such surety bonds and online payments would substitute for bank guarantee.
The aspect of transparency for cost of evaluation in complex tenders, delay due to procedural hinderances and indirect costs would be done away by these new rules as provisions are being made for payment of 75% of running bills, mandatorily within 10 days and for encouraging settlement of disputes through conciliation.
Corporate Voluntary Winding up in 6 months
Chapter XX Part II of Companies Act, 2013 deals with voluntary winding up of companies where the company passes a special resolution. The voluntary exits were considered to be faster processes but as of June 2021, there were over 28,000 pending cases with some pending for over 1000 days. The average timeline has been around 2 years and this has been aimed to be reduced to fall within 6 months by accelerating corporate exits. Like certain systems for accelerated registration of new companies, a focus has been moved to re-engineered- Centre for Processing Accelerated Corporate Exit (C-PACE). If incorporation and exit is expedited then it makes India a favorable jurisdiction for investment
Alongside, Hon’ble FM also stressed upon global cooperation to facilitate cross-border insolvency which enables the creditors to claim assets of defaulters lying overseas and vice-a-versa and stated there were certain amendments expected in the Code.
Recognizing Cryptocurrency?
According to crypto research and intelligence business CREBACO, 105 million Indians or 7.90% of the population is invested in some kind of digital token. The trading in crypto has been a rollercoaster ride. Way back in 2017, the trend was seeing an upscale, only when in April 2018, the RBI issued a circular banning all financial entities from dealing with any entity dealing in cryptocurrencies, effectively banning the asset class in India. In March 2020 though, the Hon’ble Supreme Court overturned the RBI’s ban and allowed block-chain networking and following this, the interest of all rose with Bitcoin topping nearly USD 64,000 in 2021. There had been various rumors of government recognizing these currencies.
Finally in this budget, though India did not legally recognize crypto but took a step closer to adopt the same after years of wavering on its stance. They clearly acknowledged a large number of crypto assets are being bought and sold and thus to keep a money trail, they are taxing profits at rate of 30%.
Alongside stating that government will come forth with crypto regulations and laws in future, she also added the advantages of digital currency and hence RBI would also issue digital currency (CBDC). In the words of former FM, Shri P. Chidambaram, the current Hon’ble FM has impliedly announced that cryptocurrency is legal now and this was seen with a 2% rise of Bitcoin from day’s loss following the taxation announcement.
Foreign Trade and investment
To enable the ease of doing business in SEZ units, the government has planned to undertake reforms in customs administration of SEZs and make it fully IT driven and function on the Customs National Portal being implemented by 30th September 2022 with a focus on higher facilitation and with only risk-based checks. In line of this, the government has planned to repeal the existing Special Economic Zones Act, 2005 and replace it with a new legislation in line with WTO to cover all large existing and new industrial enclaves.
Further ADR has been emerging as an efficient and effective way of dispute resolution and parties often opt to arbitration to enjoy autonomy and to streamline their adjudication. To enhance the same, an International Arbitration Centre will be set up in the GIFT City for timely settlement of disputes under international jurisprudence. This will be giant leap for adjudication of disputes thereby attracting international investments and promoting FDI in India.
Individual Taxation
Though the tax slabs remain unchanged in 2022-23, taxpayers can now file an updated return within two years from the relevant assessment year. In a further relief to co-operative societies, their minimum alternative tax has been reduced from 18.5% to 15% and surcharge from 12% to 7%.
With the proposed schemes, an increase in public investment can be expected, which shall not only create immense opportunities for businesses but also lawyers to adhere to regulatory regime to take a step towards a modern and self-reliant India.
