Page 47 - Banking Finance November 2024

ARTICLE

referred under the Securitisation and Reconstruction of completely redeemed SRs, indicating recovery through
Financial Assets and Enforcement of Security Interest this avenue, further escalated during the financial year.
(SARFAESI) Act saw a contraction in both referred cases Concluding Remarks: The banking sector stands as a
and monetary involvement, following a notable uptick in cornerstone of economic growth, playing a vital role in
the preceding year. Meanwhile, the Insolvency and Bank- channeling savings into productive investments and stimu-
ruptcy Code (IBC) maintained its position as the primary lating economic activity.
avenue for recovery, contributing 43% to the total amount
recovered in 2022-23, with an accompanying improve- However, the persistent challenge of Non-Performing
ment in the recovery rate. Assets (NPAs) emphasizes the need for effective man-
agement and mitigation strategies. While the increasing
In addition to utilizing various resolution mechanisms for trend in NPAs until 2018 posed significant challenges,
recovery, banks also opt to cleanse their balance sheets subsequent declines suggest efforts towards better man-
by offloading non-performing assets (NPAs) to asset re- agement and resolution. The implementation of mecha-
construction companies (ARCs). The volume of NPAs sold nisms like the Insolvency and Bankruptcy Code (IBC) has
to ARCs escalated notably in 2022-23, partly attributed been instrumental in streamlining recovery processes.
to assets offloaded to the newly established National As- Moving forward, continued vigilance, proactive measures,
sets Reconstruction Company Ltd (NARCL). During this and collaborative efforts are essential to ensure the sta-
period, 9.7% of the previous year's stock of Scheduled bility and sustainability of the banking sector, thus bol-
Commercial Banks' (SCBs) Gross NPAs (GNPAs) were stering the broader economic landscape.
sold to ARCs, a substantial increase from the 3.2% re-
corded in 2021-22. Besides, the acquisition cost of ARCs, References
relative to the book values of assets, decreased from 33% Reserve Bank of India, Report on Trend and Progress of
at the close of March 2022 to 29.8% by March 2023. Banking in India, 2022-23, Mumbai.
Tiwari, A. (2022). Insolvency & Bankruptcy Code: A
The share of Security Receipts (SRs) subscribed by banks Major Mode Of NPA Recovery.
and Financial Institutions (FIs) witnessed a steady de- Bakshi, A., & Mitra, S. (2020). ROLE OF IBC IN NPA
cline from 65.4% at the end of March 2021 to 60.6% RESOLUTION IN INDIA. Prestige International Journal
by the end of March 2023. Moreover, the amount of of Management and Research, 11(3), 106-112.

Crorepati income tax filers soar 5x to 2.3 lakh in 10 years

The number of individuals disclosing over Rs 1 crore taxable income in their returns soared five times from 44,078 in
assessment year (AY) 2013-14 (financial year 2012-13) to just under 2.3 lakh in AY2023-24 (FY2022-23), which may
be a pointer to higher incomes and improved compliance. During the period, the number of tax returns filed by
individuals rose more than 2.2 times from 3.3 crore to over 7.5 crore, according to the latest tax department data.

The share of salaried individuals declaring over Rs 1 crore income neared 52% in the last assessment year, compared
with 49.2 per cent in AY2022-23, and 51 per cent in AY2013-14.
The share of salaried individuals in the Rs 1-5 crore segment was as much as 53%, but as the income levels rose
there were fewer salaried, pointing to the presence of more businessmen and professionals. For instance, none of
the 23 who declared over Rs 500 crore annual taxable income were salaried individuals, while 19 of the 262 in the
Rs 100-500 crore segment were salaried.
In AY2013-14, only one individual had declared over Rs 500 crore income, while there were two in the Rs 100-500
crore group. Compared to AY2022-23, however, there was a marginal fall in the number of individuals disclosing
income of over Rs 25 crore - from 1,812 in to 1,798 in the last assessment year. Among the salaried too, the trend
was visible in the over Rs 10 crore segment - a 4.7 per cent decline from 1,656 to 1,577.

42 | 2024 | NOVEMBER | BANKING FINANCE