Indian entrepreneurship bounces back, 16,600 businesses registered in June
With the second wave hitting India in April and states going into lockdown, there was a sharp decline in the registration of companies and LLPs
As the havoc wreaked by the second wave of the Covid-19 pandemic recedes, here is a development that will inspire confidence amidst these gloomy times. Data released by the Ministry of Corporate Affairs shows that over 16,600 businesses got registered in the month of June, up by 26% YoY and 16.7% sequentially, indicative of the fact that entrepreneurs are not bowing down to the pressures of the pandemic and moving ahead.
Over 16,600 business which got incorporated in the month of June consists of 12,722 new companies and 3,940 Limited Liability Partnerships (LLPs), a business form popular in the service sector owing to its flexibility. Compared to June, 14,269 businesses got registered in the month of May.
Second wave impact
With the second wave hitting India in April and states going into lockdown, there was a sharp decline in the registration of companies and LLPs. Even though the figures for May exhibited a small drop, the overall trend of the Q1FY22 remained strong as compared to Q1FY21, suggestive of the fact that the second wave couldn’t dent entrepreneurship much.
A new business getting incorporated is indicative of different factors like investment intent and growth in economic activity, though there are other factors that impact the overall investments that are finally injected into the companies.
Drop in GST Collection
The safety curbs and mini lockdowns which were imposed in different states in April-May also led to a slump in GST collections for the month in June, owing to businesses slowing down. Official data shows that GST collection in June was under Rs 1 trillion for the first time in eight months.
The government has also announced a slew of measures including loan guarantees and credit support to help businesses in tiding through the devastating impact of the second wave of Covid-19. Similar measures have been taken to ramp up healthcare facilities as well, at a time when India stares at the possibility of a third wave. The government is also rolling out incentives to new businesses, looking at rejigging its customs duty structure and trying to enhance the infrastructural investments to make sure the economy recovers in a short span.