Rural-Urban Gap Narrows In India

(MENAFN- Khaleej Times) Question: While the Indian Economy is growing at a reasonably good pace compared to other countries, will this create a greater divide between rural and urban areas?

ANSWER: According to a recent report for the April-June quarter of this year, rural demand for goods and services has picked up substantially, reducing the disparities amongst the rural and urban population. In fact, it is expected that with the monsoon setting in, the rural demand may outstrip demand in the urban areas.

Therefore, the fast moving consumer goods (FMCG) industry is concentrating its sales efforts and devising marketing strategies to cash in on the rural sector. It is expected that in the second quarter of this financial year, rural demand will surpass urban demand with the forecast of a normal monsoon. It has also to be noted that the use of the internet in rural areas has shown an upswing as more and more businesses are receiving orders online and using UPI for placing orders, highlighting the rapid adoption of digital technology in the informal sector.

Another encouraging trend is that 54 per cent of the proprietary establishments in the manufacturing sector in rural areas are run by women entrepreneurs. The total number of establishments in the unincorporated sector of the rural economy has touched 65 million by March 31, 2023. More than 40 per cent of the establishments are engaged in retail trade, followed by manufacturing of apparel. Capital investment has also shown a promising trend in the unincorporated sector. Therefore, the gap between the rural and urban economies of India is fast shrinking and income disparities are being reduced.

Question: I believe that a new criminal procedure law has been introduced in India with effect from this month. Will the new enactment take cognisance of digital records which are now commonly used?

ANSWER: The outdated Indian Penal Code and the Code of Criminal Procedure have been replaced with new legislation with effect from July 1 this year. Hereafter, Courts will take cognisance and accept electronic or digital records as primary evidence provided they are preserved in the prescribed manner. Electronic or digital records will now have the same legal validity and enforceability as traditional documents subject to specific conditions which are laid down in the law.

Further, the new legislation enables the appearance of witnesses, accused persons, experts and victims to depose by electronic means. This will mitigate logistical challenges for the aforesaid persons in terms of costs, resources and time. Any print or copy of an electronic record is a document which would be admissible in any legal proceeding without production of the original content, provided the device was being used regularly by the person who had lawful control of its use.

This means that any unlawfully tapped or recorded conversation or videos would not be admissible. Digitally recorded conversations will have to be in conformity with conditions laid down by the Indian Telegraph Act which prohibits illegal phone tapping. The new legislation will apply only to cases which are filed after 1st July, 2024.

Question: My son is practicing in India as a Chartered Accountant. He is required to attend courses organised by the Institute of Chartered Accountants as part of the continuous learning exercise. He now informs me that there is another training course which he may have to undertake. What is the purpose of this?

ANSWER: A new regulatory authority has been set up in India known as National Financial Report Authority (NFRA) which has been put in charge of the regulatory and disciplining system for publicly listed companies. NFRA together with the Indian Institute of Corporate Affairs (IICA) has jointly launched training modules for accountants and auditors of 'public interest companies' which cover listed companies as well as large companies. The object is to ensure that auditors are adequately prepared to deal with financial issues pertaining to large companies, which have thousands of shareholders. It is proposed that NFRA and IICA will conduct nine-month courses for auditors and accountants requiring attendance of classes for two or three days every week. These two agencies will be assisted by senior chartered accountants, industry representatives, as well as experts from foreign countries to frame and devise the training modules.

H. P. Ranina is a practising lawyer, specialising in corporate and tax laws of India.

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