Digital payment adoption in India

Opting for digital payment methods has helped MSMEs in India grow rapidly

Indians love digital payments.

A few years ago, you could hear someone in your circle crib about a shopkeeper not letting you buy something because you did not carry the exact change amount.

In 2017, the digital payment revolution boomed in India. BHIM (Bharat Interface for Money), TEZ (now known as Google Pay), PayTM UPI, and Amazon Pay allowed customers to buy items from shops by scanning the QR code.

Not just customers, large businesses, retail stores, and MSMEs could now accept every customer and not worry about getting the exact change amount. 5 years later, digital payments have helped every business to survive, compete, and grow swiftly.

And today, the retail sector is increasingly embracing digital transformation for improved customer services, offering an elevated experience.

One such initiative, Amazon Pay Smart  Stores has helped offline stores manage the challenges of affordability, credit options, payment problems, and merchant services with ease.

Recently, the Federation of India Micro and Small & Medium Enterprises (FISME) in partnership with Tamil Nadu Small and Tiny Industries Association (TANSTIA) hosted a virtual panel discussion comprising bureaucrats, ministers and industrial experts. The panel was moderated by Mr. Mayank Gaur, Joint Secretary, FISME, to deliberate on how MSMEs in Southern India are revamping and expanding their businesses by adopting smart digital payment channels.

Dr. Ramaseshan R., CA, Director – BHI Capital and Executive Member of The Tamil Chamber of Commerce highlighted how digital platforms have enabled ease of doing business for small players. He said, “Digital platforms like Amazon have enabled businesses to blossom, providing an alternative route and helping adopt ambivalent models of payment. This has enabled merchants to provide a convenient, instant, and rewarding offline shopping experience to their customers.”

Mr. Girish Krishnan, Director, Amazon Pay Rewards, stated, “Customers trust their offline retailers because of touch and feel. But offline retailers face the challenges of affordability, credit options, payment problems, and merchant services. With our Smart Store program, we aim to offer a contactless way for customers to discover products at local shops, make easy payments, get EMIs, and earn rewards using Amazon Pay. We have created a digital storefront for shops, enabling customers to discover products, read reviews, and evaluate offers using the Amazon app.”

This, Mr. Krishnan further commented, “is helping thousands of merchants drive additional footfalls to the store and strengthen their customer loyalty relationship through value-adding propositions, a wide range of payment options, and exclusive brand/bank offers.”

Digital payment adoption in India:

As per the National Payments Corporation of India (NPCI), October 2020 witnessed the highest monthly UPI transactions in India totaling 2 billion transactions worth 3.86 lakh crore. In May 2022, this figure touched 6 billion monthly transactions worth 10 lakh crore. Fascinating, isn’t it?

MSME in India:

MSME is pretty important to our country. Roughly, this sector contributes to 1/3rd of our success. Hence, when they succeed, we as a country succeed.

Owing to their success, on 30th March 2022, the government allocated 6062.45 crores ($808 million) for the RAMP scheme – Raising and Accelerating MSME Performance. This program aims to help MSMEs get a smooth passage in the market so they can grow their business swiftly.

MSME and digital payment adoption:

After demonetization and the pandemic, digital payment adoption has risen. Customers today prefer paying using digital means as it is convenient. Whether you buy an item worth INR 5 or 50,000, digital payments allow you to complete the transaction in a few seconds.  

Did you know?

72% of MSMEs accept digital payments, and 28% prefer cash payments. This number is gradually increasing as more and more MSMEs adopt digital payments.

With the rise of the internet economy,

How does digital payment adoption allow MSMEs to grow?

1. Easy tracking of daily sales & other expenses:

Digital payment adoption allows the business owner to track daily sales. There is an accurate figure, and that helps the owner to understand how the business is faring.

2. Growing client base and visibility:

Businesses that allow customers to pay using digital means get better visibility than those asking for cash payments. As the business gains visibility, new customers start walking in.

3. Using data and reports to improve business:

A business owner can analyze data about daily sales, inventory levels, and digital payments to understand their business. Using this data, they can improve their offerings and pass benefits to customers that make digital payments.

4. Ease of doing business:

It does not matter how small your business is. Allowing digital payments allows you to conduct business with ease and boost profits in the long run.

MSMEs adopting digital payments have a long growth curve than ones that use cash payments. I say this because businesses accepting digital payments also allow customers to pay in cash but cash businesses do not allow digital payments.

Overall, digital payments are the future, and MSMEs that switch to this will survive, compete, and grow better than the rest who stick to the cash payment method.


MSME data – IBEF

price ethereum 2022

Sharding – The price Ethereum must pay to survive and grow

Vitalik has been an inspirational teacher. He supervises 1 batch of 20 students from Class 7 every year since July 2015. In the 7 years, he has been teaching, students have not just passed with flying colors but have become successful in what they do.

For 2 years (2020), this record has witnessed a few problems. Vitalik was told to teach not one but 3 classes. He loved the idea. The management thought he could accept the workload and brighten the future of all the children.

Even though everyone has passed in these 2 years, the result has not been exceptional like in the last 5 years. The parents began complaining, and the management got worried as well. They raise this concern with Vitalik.

The management understands how burdened Vitalik is with so many responsibilities. They suggest Vitalik split his duties with 2 teachers to give equal time to all students. Vitalik gives it a thought and goes ahead with this suggestion.

In 2022, this crucial change might bring back the same results parents have dreamed of.

In the cryptocurrency world, this is what Sharding can do to Ethereum. Before discussing Sharding, let us understand Ethereum.

What is an Ethereum?

Ethereum is a decentralized blockchain platform. Yes, it is not just a cryptocurrency coin, like everyone said. It is more than that. No matter which blog or website you read, if there is a suggested cryptocurrency to invest in, Ethereum will be on that list. The price for Ethereum today stands at 195000 INR or 2534 USD.

You can also read – How to create wealth in India in 15 years

Ethereum problems and scheduled updates:

Ethereum near-term price prediction is confusing. Why so? This is because of multiple problems the cryptocurrency market has witnessed. While a few months ago, the price prediction for an Ethereum spanned between 460000 INR (6000 USD) to 770000 (10000 USD), it now stands at 140000 INR (1800 USD) to 300000 INR (4000 USD).

Reasons for this price correction in Ethereum are:

1. The downfall in the stock market

2. War tensions between Russia-Ukraine

3. Inflation worries, and

4. Huge gas fees for the Ethereum network.

More than a million transactions take place on the network. But the gas fees are pretty high for these transactions. Here is a comparison of transactions to other popular networks:

CryptocurrencyTransaction speed
PolygonUp to 65000

The gas fees on these platforms are way lower than the Ethereum network. Then why should anyone use this network?

Imagine the price Ethereum will pay when customers flock to other networks. To counter these problems, Ethereum has scheduled updates to lower gas fees.

They finally have kept an update that can boost Ethereum transactions on the network with low gas fees. That update is “Sharding.”

What is Sharding?

For Bitcoin and Ethereum, you can track transaction history right from the first transaction in 2009 and 2015, respectively. Each transaction is connected to 1 node. Now imagine millions of stored transactions in this one node. It’s become too heavy and hence is slowing down.

Sharding breaks down this single node into multiple nodes. Hence, each node will be an independent node. When someone ran a transaction earlier, it had to bear the entire network’s transactional load. After sharding, transactions can run faster without carrying the transactional capacity of the whole network. This will eventually reduce gas fees.

Ethereum sharding explained:

So how does Ethereum sharding work? After sharding is complete, all the nodes will be independent and remain connected to the primary network. You can share the information stored in 1 node with other nodes.

Ethereum sharding progress:

Currently, the Ethereum sharding will take place in the 2nd quarter of 2022. The updates will continue rolling out until 2023.

I believe this is the price Ethereum must pay today to survive and have a better tomorrow in the market.

GST registration

What is GST? Is it different for Online & Offline Sellers? Let’s find out!

GST kyon aur iske rules offline and online selling ke liye alag hain kya?

The Government of India levies GST on the supply of goods and services. This means at the point of sale, GST will apply. Before GST, multiple indirect taxes like VAT, excise duty, service tax, other local and state taxes would make life difficult for everyone.

Getting taxed at each stage affects every business person. That is when GST was born.

Before discussing the offline-online seller parity, whether the rules are different for sellers in offline and online space, and the importance of GST, let’s get a brief history of the Goods and Service Tax.

Yeh GST aakhir hai kya?

Prime Minister Atal Bihari Vajpayee set up a committee in 2000 that began drafting the law for GST. After 17 years, on 29th March 2017, The Goods and Service Tax act was introduced and passed in the Lok Sabha and Rajya Sabha. After a few months, on 1st July 2017, GST came into effect.

It took a change in 2 ruling parties, multiple prime Ministers, and 17 long years for this tax to see the light of the day.

Under the current GST regime, a tax will apply at each stage. This starts from buying raw materials, manufacturing, sale to wholesaler, sale to retailer, and finally ends with the sale to the consumer. GST is levied on each value addition made to sell the product.

There are 3 sub-categories of GST:

a. CGST – Central Goods and Services Tax:

This will apply to intrastate sales of goods and services. The central government will collect CGST.

b. SGST – State Goods and Services Tax:

This will apply to intrastate sales of goods and services. The state government will collect SGST.

c. IGST – Integrated Goods and Services Tax:

IGST is applicable when a supply of products and services happens between 2 states. The state & central government both collects and share IGST.

Existing Principal Place of Business (PPOB) registration requirement for GST:

The current GST Rules require sellers to register in each state where inventory is held. The registration process involves the submission of 12 different documents and is also time-consuming.

GST Composition Scheme:

The Composition Scheme is a simple and easy scheme under GST for taxpayers. Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of turnover. This scheme can be opted by any taxpayer whose turnover is less than Rs. 1.5 crore.

GST collections for the financial year April 2021- March 2022:

April – 1,39,708 lakh crores

May – 97,821 crores

June – 92,800 crores

July – 1,16,393 lakh crores

August – 1,12,020 lakh crores

September – 1,17,010 lakh crores

October – 1,30,127 lakh crores

November – 1,31,526 crores

December – 1,29,780 crores

As you can see, for the past 6 months, GST collections have been above 1 lakh crore. Here are the average monthly gross GST collections for the three financial quarters in 2021-2022.

Q1 2021-2022 – 1.10 lakh crores

Q2 2021-2022 – 1.15 lakh crores

Q3 2021-2022 – 1.30 lakh crores

Here, we can also see a gradual increase in GST collections, showing positive growth in the Indian economy.

Are you wondering how the government and the business persons benefit from these collections? Let us find out.

Importance of GST for the government:

The GST collections each month help the government. One way it helps is by reducing the fiscal deficit. Currently, our total expenses are higher than the total revenue. Hence, the fiscal deficit is high. But with increased GST collections, a portion of those funds is used to reduce the fiscal deficit.

Other priorities of the government include the economic development of the nation. Through various measures, these funds are used to boost growth in the Indian economy.

Objectives and Advantages of GST

Business owners and the common man were in a state of confusion during the launch of GST. It took a while, but we know now what the objectives of GST are.

1. One country = One Tax:

As mentioned earlier, multiple indirect taxes were applied.       These taxes affected the business owners because it was akin to a rise in production costs. This was passed to the consumer who would bear the final brunt.

Now, with GST, there is one tax for everyone. This unification of taxes helps businesses sell products in any local and state area. Taxation at the financial year-end also becomes easier as you don’t need to use multiple income tax return forms.

2. Boost in competitive pricing benefits the customer:

The Government wishes to do what is best for the people. Earlier, with multiple indirect taxes, the product prices were costlier. Sometimes, these prices are higher than those found in global markets. Hence, with GST, things fell into place.

With uniform GST rates, one can expect businesses to price their products competitively. This means, as a customer, you will get the best rates available and not the costliest rates. This boost in competitive pricing will benefit customers as raw materials under higher tax slabs push up prices that were getting passed on to the consumers.

You can also read – Here is how going digital can save struggling MSME in India

3. The main goal – To simplify online procedures for ease of business:

Businesses before the digital era managed their business and filed returns offline. These taxpayers had a range of difficulties in filing returns. With the addition of GST, this problem got solved quickly.

GST procedures take place online. Whether it’s registering for GST, generating a bill on sale, or filing for returns, you can do them all online. This promotes ease of doing business.

The harsh reality for small sellers in India:

GST states that it wants to simplify ease of doing business. But for small sellers, this is not true. Small sellers like MSMEs, self-employed individuals, self-help groups, artisans, and homemakers face market entry barriers. This is because of the GST rules. The ones who register have to pay GST returns every month. Failure to file every month leads to a penalty.

But isn’t GST supposed to help these offline sellers?

Why are small sellers facing problems with GST?

To understand the answers to these questions, let us read the current GST rules in India. These will help you learn the troubles faced by small sellers.

Current GST Rules or roadblocks for small businesses to sell online?

1. Sellers with an annual turnover of less than INR 40 lakhs and engage in intra-state sales must get a GST Registration if they wish to sell online.

2. Sellers with an annual turnover of less than INR 1.5 crores and engage in intra-state sales cannot continue with a simplified GST compliance under the composite GST scheme when they wish to sell online.

These rules affect small businesses to grow and sell products online.

But why do these businesses not register for GST?

GST registration for small businesses attracts compliance costs. Although, no charges are levied to complete the GST registration process in case businesses do not complete the registration process, 10% of the amount that is due or Rs. 10,000 will be levied. In the case of tax evasion, 100% of the amount that is due will be levied as a penalty. Every business cannot afford to pay this compliance cost. Hence, most of them end up not registering at all. Such businesses lose out on an opportunity to grow their customer base and recurring revenue. In the end, their growth potential is limited.

A solution is what these sellers need to grow.

Why the government must enable parity between online and offline sellers:

Allowing offline sellers to sell online (with intra-state restrictions)without GST registration helps them save on compliance costs, increase customer base, and grow their business revenue. In this pandemic era, a move will boost many small businesses on the verge of shutting down.

  • The Government can grow its taxpayer base, increase GST & Tax collections.
  • The customers get more options to buy online from.
  • Increase trust and transparency with small sellers

In the end, everyone wins. Hence amending these rules is absolutely necessary.

Recommendations for simplifying GST registration:

There are a few recommendations for simplifying GST registration that can streamline this entire ordeal for everyone.

1. Current exemption from GST registration is for offline sellers (goods) whose annual turnover is lower than INR 40 lakh. This exemption should extend to their online sales as well. This means if an offline seller conducts online sales + offline sales and their annual turnover is less than INR 40 lakh, they do not need to register for GST.

2. Current exemption from GST registration is for offline sellers (services) whose annual turnover is lower than INR 20 lakh. This exemption should extend to their online sales as well. This means if an offline seller conducts online sales + offline sales and their annual turnover is less than INR 20 lakh, they do not need to register for GST.

3. The current GST Rules ask businesses to register in each state where they hold their inventory. With 12 unique documents required for each state, this process becomes lengthy for sellers operating in multiple states. Hence, there is a need to simplify the Principal Place of Business (PPOB) registration requirement for GST for better results.

a. The best way to sort this PPOB requirement in the short term is to reduce this lengthy documentation process. So, instead of 12 documents, cut it down to 1 document and allow 100% online registrations for PPOB.

b. For the long term, allow sellers to get multiple state-level GST identification numbers with a single national PPOB. Doing this can eliminate the need for a principal place of business.

Enabling parity between online and offline sellers for GST registration will benefit everyone. The small businesses, the consumers, and the government will together benefit.


best single premium ULIP policy in India

A Comprehensive Guide to Single Premium Policy

Financial planning is a crucial part of everyone’s life to prepare for a comfortable future. There are a few ways you can do this. One of the main ways is investing in a single premium policy to build up a sizable corpus for your future. This is one of the best ways you can safely save enough money to provide you and your loved ones with a financially secure future. 

A single premium policy is a type of insurance policy that requires one to pay the decided sum at once in a single premium.

The returns through this policy are much better than other policies through market investments, ranging from 1.1 times the amount to 10 times. A single premium policy also provides life cover for you and your family. This, however, is the least of the benefits of this one premium policy. Here’s everything you need to know about the same:

1. Single Premium:

One benefit is the single premium itself. Many people find that beneficial. This is because, for insurance policies, you are paying premiums month after month. This can get quite tedious. With this one premium policy, you pay your amount in one premium, and you never have to worry about regular premium payments again.

2. Financial Security:

As a single premium policy provides life cover, the policy will take utmost care of your family in your absence. They just have to file a simple claim for the lump sum to be paid out to them.

3. Tax Benefits:

Single premium policies come with a lot of tax benefits. The policy premium is eligible for deduction of up to Rs. 1.5 lakh under Section 80C. Also, the death benefits paid by the same are tax-exempt under Section 10 (10D), making sure your family will not have to stress over taxes in your absence.

You can also read – How to invest for long-term and create wealth in 10-15 years

4. Multiple Fund Options and Switches:

You have complete control over where you invest your money in this one premium policy. One can choose from many fund options, such as equity, debt, and balance for your savings. You can also switch funds multiple times to always stay in the area that benefits you most.

5. 100% Investment:

You get the total benefits of this policy as 100% of your money is safely invested in any funds of your choice. 10x times, this premium money will be tremendously beneficial to provide your family with financial security in case of the death of the sole bread earner.

Keeping these points in mind, it is all you need to know about a single premium policy to understand its worth. Investing in one is a clever decision to build up a hefty amount for a comfortable and stress-free future for your family. 

Look at ICICI’s Pru1 Wealth single premium insurance policy and all the benefits provided by the same. ICICI is one of the most trusted companies in India, with a high claim settlement ratio. This means when you choose ICICI, your money will be in safe hands.

Why voting is important for Franklin Templeton Investors

Franklin Templeton evoting on 26th December 2020 – Why voting is important for Investors

Imagine having money but not being able to withdraw it for emergencies or daily essentials.

That’s exactly what investors of Franklin Templeton have gone through in 2020. Not just them, the management too has been in distress and are looking for a solution to solve this crisis.

Here’s what transpired in April 2020:

Franklin Templeton Mutual Fund publicly announced that they wish to wind up 6 credit-focused debt schemes. This was not taken lightly and the issue reached court doors.

Due to the matter reaching court along with lockdown, the winding-up got delayed. But now investors get a chance to vote and decide the fate of those schemes.

Initial Voting Date – 26th-28th December (1st round)

Alloted Voting Time – 9 am (26th Dec) to 6 pm (28th Dec)

First Voting results – Undecided

Voting enrollment – Visit and cast your vote

First round Voting counting – In January 2021

Why voting is important?

Remote e voting is of the essence as the management of Franklin Templeton mutual fund can understand what the investors want. Here are the 6 schemes in question:

1. Franklin India Ultra Short Bond Fund

2. Franklin India Short Term Income Plan

3. Franklin India Credit Risk Fund

4. Franklin India Low Duration Fund

5. Franklin India Dynamic Accrual Fund

6. Franklin India Income Opportunities Fund

From April 2020 to November 2020 these 6 schemes under winding up have received over 11,576 crores from coupons, maturities, and pre-payments. The schemes have been faring well and hence investors are looking to redeem them immediately.

There are 2 scenarios post voting:

YES – If the investors vote for “YES” then as per Regulation 41, they allow the management of Franklin Templeton to decide on the redemption of funds. The trustees can do it themselves or authorize an independent consultant to plan and sell. There will be no need to make a distress sale immediately.

NO – If the investors vote for “NO” then as per rules, the funds will be reopened for investors to redeem or to make new purchases. As many investors want to withdraw their funds, there will be distress selling and the scheme will incur high losses.

Meeting on 29th – Investors can ask Trustees about this decision for the first time since April 2020. Voting will also be allowed in this meeting. Also, the trustees will ask the investors if they want to authorize the trustees to go ahead with the winding-up themselves or want to allow an independent consultant Deloitte to do the deed.

When will investors get their money back?

Please understand that you won’t get your money back in one shot. The redemption of your money will be made in timely installments. Only cash positive schemes (in profit) will be allowed to redeem.

The next round of hearings at the Supreme Court will resume in the 3rd week of January 2021. The results of evoting will be sent in a sealed cover to the court. A decision will be made accordingly.

You can also read – How to create wealth in India within 15 years

After this, the second round of voting will take place to give the investor’s approval for the authorized person to make the selling/redemption.

I believe, voting “YES” will allow you as investors to get the best out of your schemes. If they are sold via a distress sale, then it’s possible you might have to settle with lower or no profits. So vote accordingly.