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Partner’s Column -January, 2017

“Wishing you all a very Happy and Prosperous New Year-2017!!” “Effectiveness of policy also depends on implementation; ideas alone don’t lead to desired outcomes.” After Prime Minister Mr. Narendra Modi announcing withdrawal of higher currency as legal tender to curb black money, finance minister Mr. Arun Jaitley added a new gloss to the decision. He announced that this currency swap would “not merely nudge the economy in the direction of cashless economy but [give it] a significant push in that direction.”This move was part of a larger agenda to move India into a digital economy. The new buzz word today is “Cashless Economy”. Reducing the role of cash in the system is a worthy goal, but it cannot be the driving force for this policy as it now appears to have become. Of course, the digital era is something to embrace, and new methods of payments will continue to be introduced. But Indians need to recognize the risks and benefits of different payment instruments. The risks associated with electronic payment instruments are far more diverse and severe. As the government has taken a big political risk, it should avoid moving the goalposts. Changing the narrative of the currency swap could affect the government’s credibility and make it more difficult to take tough decisions. It will be a long-drawn-out battle against black money and concerted actions will be required on various fronts. On the other hand, the New Year’s Eve brought some sort of relief to the citizens as the Prime Minister announced several incentives. Some of the major highlights of the same were to extend a helping hand to the farmers by allotment of Rs. 20,000 crores under NABARD, Home Loan schemes, where home loans up to Rs 2 lakhs, are made available for building a new house or expanding an existing one in villages, to get 3% interest exemption, 33% more homes to be built in rural areas under the Pradhan Mantri Awas Yojana (PMAY), credit guarantee for micro, small and medium enterprises would be doubled to Rs. 2 crores. This will also cover loans from NBFC’S, 8% interest on deposits of up to Rs 7.5 lakhs for senior citizens for 10 years and the government to give pregnant women Rs 6,000/- to be transferred into their bank accounts. An appreciable step has been taken by Ministry of Corporate Affairs by introducing E-Form INC-32 under SPICe scheme vide Companies (Incorporation) Fourth Amendment Rules, 2016. SPICe means Simplified Proforma for Incorporating Company Electronically.  Through this notification, MCA has notified simplified integrated process for incorporating a company in E-form INC-32 along with Memorandum of Association in E-form INC-33 and Article of Association in E-form INC-34. MCA has simplified the procedure for incorporation of a Company with 7 subscribers by introducing filing of predrafted Memorandum and Article of Association electronically, which will make it a lot easier for the professionals. While we are still uncertain about the impact of the major decisions, namely GST & demonitization, it is the Union budget of 2017 that is most eagerly awaited as it would determine and reveal the government’s way of dealing with the current situation of economic chaos and expectations of the common man in the country. Apart from the government strategies to address the issues raised by demonetization in the upcoming budget, there are two major changes which the Union Budget 2017 will be a witness to. First is the merger of the Railway budget with the Union budget, and second being the presentation of the Union Budget on the 1st day of February instead of on the last day of February. I conclude by wishing all the best to all. Thanks Bhavani Partner

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