The Policy Wrap: BharatX announces investments to the tune of $15 million in the Indian startup ecosystem, South Korean antitrust watchdog scrutinizes delinquent online sellers, and more
BharatX announces investments to the tune of $15 million in the Indian startup ecosystem
The Indian startup ecosystem will receive USD 15 million from BharatX, a joint venture between India Accelerator and the think tank Council for International Economic Understanding (CIEU), over the course of the next 18 months. According to sources, during the initial round of the accelerator programme, BharatX will invest between Rs 1 and Rs 5 crore in each firm.
Speaking about BharatX’s initiative, CEO Munish Bhatia said, "With India becoming the third largest startup ecosystem in the world, Bharat-specific startups from Tier 2 and Tier 3 cities require different interventions and ecosystems to help build solutions for the next over 800 million people. BharatX will bridge that gap and enable the next stage of expansion of the startup ecosystem through specialised programmes."
South Korean antitrust watchdog to scrutinize delinquent online sellers
According to South Korea's antitrust commission, effective measures will be adopted to prohibit defaulting online sellers’ use of popular customer-to-customer marketplaces like Karrot and Joonggonara. The Fair-Trade Commission will offer advice to platform operators in order to improve their user protection mechanism on their own and control business-driven vendors who are owners of businesses rather than regular individuals. This is in reaction to an increase in fraudulent damage and dispute cases that have been recorded from the selling of counterfeit items and scams.
The FTC intends to talk with platforms such as the Korea Consumer Agency about how to run fair and open dispute resolution standards and procedures so as to develop practical restrictions on defaulting online vendors.
“We will actively discuss with platform operators to come up with ways to resolve fraudulent damages. We will come back to whether we should revise the Electronic Commerce Act or not after we have a sufficient discussion with the industry,” FTC Chairman Han Ki-jeong told reporters at a press conference held last week.
CCI to handle complaints on GST profiteering from Dec 1
In place of the National Anti Profiteering Authority, the Competition Commission of India (CCI) would handle all complaints relating to GST profiteering from December 1, according to a government notification. The Directorate General of Anti-Profiteering (DGAP) currently investigates all consumer complaints of companies failing to pass on GST rate cut benefits before submitting its findings to the NAA. The NAA then issues a final decision regarding these complaints. Since the NAA's term is coming to an end this month, the CCI will assume its duties on December 1.
The main responsibility of NAA is to make sure that the benefits of the input tax credit and the GST Council's lower GST rates on products and services are distributed proportionately to consumers through commensurate price reductions.
It is being widely regarded that as CCI has legal expertise in matters related to consumer interest and a refined appellate mechanism, there would be higher transparency in the workflow.
Finance ministry tells lenders, banks to prepare roadmap for small merchants' entry into digital fold
The finance ministry has requested banks to develop a plan for integrating small merchants and traders into the digital economy.
Banks are working on developing standard operating procedures and a performance measure matrix as per the ministry’s directive. Even the Indian Banks' Association, or IBA, will also be involved in bringing private banks to the fold. Lenders too, have been approached for their opinions on a variety of topics, including whether or not more financial services products should be introduced and how to handle problems like ensuring the digital security of both vendors and their clients.
"Since DBUs are also expected to play a role in enabling customers to learn digital banking, it is important that small traders are also on board with digital financial literacy campaigns," a bank executive said. He also added that special emphasis will be placed on cyber security.
Financial information providers list now has GSTN under Account Aggregator framework
In order to facilitate cash flow-based lending to MSMEs, the Goods and Services Tax Network (GSTN) has been added to the list of financial information providers within the Account Aggregator framework.
"Department of Revenue shall be the regulator of GSTN for this specific purpose and Goods and Services Tax (GST) Returns, viz. Form GSTR-1 and Form GSTR-3B, shall be the financial information," the Reserve Bank said in a circular.
The list of financial information providers includes banks, non-banking financial companies, asset management companies, depository, depository participants, insurance companies, and pension funds.
Sebi plans major changes to share buyback rules
The Securities and Exchange Board of India (Sebi) has proposed major changes to share buyback rules. The committee has proposed introducing a glide path to shorten the duration of a buyback offer and the maximum ceiling. According to current Sebi regulations, buybacks from the open market must not exceed 15% of the company's paid-up capital and free reserves. Additionally, regulations now stipulate that the buyback offer must be closed within six months of the day it was opened.
"Under the stock exchange route, there is a possibility of one shareholder's entire trade getting matched with the purchase order placed by the company and thus depriving other shareholders to avail the benefit of buyback. This runs contrary to the underlying principle of equitable treatment," Sebi said in a discussion paper.
The panel has suggested lowering the buyback offer's threshold limit and deadline to 10% and 66 days starting on April 1, 2023, and 5% and 22 days starting on April 1, 2024. The open market option may also be eliminated for buyback proposals starting in April 2025.
The panel has also recommended that only businesses whose shares are actively traded should have the opportunity to conduct open market buybacks through stock exchanges.
Sebi plans to bring new investors’ complaints system
By implementing updated internet and mobile application capabilities, Sebi intends to revamp SCORES, the current investors complaint system. SCORES (SEBI Complaints Redressal System) was made operational in June 2011 to make it easier for investors to file securities-related complaints, mostly against listed companies and registered intermediaries.
In this regard, a notice published on Friday by the Securities and Exchange Board of India (Sebi) requested expressions of interest (EoIs) from parties with an interest in replacing the current system with a new one.
News from around the globe
Activision and Google secured a $360 million agreement to halt rival app store
In order to prevent app developers from competing with its position in the Play Store ecosystem, Google has struck at least 24 agreements with them. This includes an agreement to pay Activision Blizzard Inc $360 million over three years, and Tencent Holdings Ltd $30 million over one year, according to a court filing in the United States District Court for the Northern District of California on Thursday.
The financial details were revealed in a recently released, unedited version of a lawsuit Epic Games, first brought against Google in 2020. It accused the tech-giant giant of engaging in anticompetitive behaviour in its Android and Play Store operations. According to the lawsuit, Google was aware that partnering with Activision "essentially assured that Activision would abandon its ambitions to build a competing app store and Google would maintain its dominant position in the app store ecosystem. The lawsuit also claimed that the arrangement reduces service quality while raising pricing.
Deep tech businesses only receive 11% of all tech investments, more seed funding desirable: NASSCOM president
Only 11% of technology-related funds now reach this ecosystem, according to Debjani Ghosh, president of the National Association of Software and Services Companies (NASSCOM), who stated on Friday that India's deep tech firms need more seed and early-stage capital to expand quicker. Startups in the field of emerging technologies such as artificial intelligence (AI), robotics, quantum, blockchain, Internet of Things (IoT), drones, and augmented reality are classified as deep tech startups (AR).
Speaking at a workshop on "Startups and Entrepreneurship: Vision India@2047" organised by the Department for Promotion of Industry and Internal Trade (DPIIT), Ghosh noted that only 3,000 of the country's more than 25,000 tech startups—or just 12%—are related to deep tech. According to her, only 11 per cent of total technology-related funding is going to deep tech. She said that India only had about 485 "truly inventive" deep tech startups and proposed the ambitious idea of increasing this number to 10,000 by the end of this decade.
Google Play launches UPI Autopay payment for subscription-based purchases in India
Google Play is introducing UPI Autopay as a payment option for subscription-based purchases on Google Play in India. Introduced by the NPCI under UPI 2.0, UPI Autopay allows customers to make recurring payments using any UPI application that houses this feature.
Users only need to tap on the payment method in the shopping cart, choose "Pay with UPI," and then authorise the purchase in a supported UPI app after choosing a subscription plan to purchase.
Introduction of UPI Autopay on the platform, is aimed at extending the services of UPI to subscription-based purchases. Notably, Google’s decision to introduce this feature came days after CCI imposed two heavy penalties on the tech giant.
Thanks for reading ADIF! Subscribe for free to receive new posts and support my work.