Chennai, Nov 17 (Agency) There has been a substantial improvement in the financial health of business entities in India in Q2 FY 2022 compared with the prior quarter, according to a quarterly risk transition report released by Rubix Data Sciences. Rubix, a technology and analytics-based B2B Risk Management and Monitoring platform, in its report covered changes in risk from Q1 FY 2022 (April-June 2021) to Q2FY 2022 (July-September 2021). The report said the GST Quarterly Monitoring Report is prepared basis 10,973 business entities and provides an apple-to-apple comparison between both quarters.
The business entities being monitored belong to more than 35 sectors of the economy. As per the the Rubix GST Compliance Score of 813 Business Entities (only seven per cent of the total number being monitored) deteriorated between Q1 and Q2 FY 2022. In the prior quarter, 32 per cent of the business entities had witnessed a drop in their Rubix GST Compliance Score. In all the quarters since Q4 FY 2020, the Compliance Score has deteriorated in a higher percentage of business entities than seven per cent recorded in Q2 FY2022. This clearly indicates a substantial improvement in the financial health of business entities in India in Q2 FY 2022 compared with the prior quarter. At the end of each quarter of the financial year (April-March), Rubix compares the data of how Indian business entities in its monitoring portfolio have performed versus the prior quarter, from a statutory compliance and credit rating perspective. The key parameters being monitored each quarter are GST Filings, Provident Fund filings and Credit Ratings. The purpose of the Quarterly Risk Transition Report is to see if the business entities being monitored show any deterioration or improvement from a statutory compliance or external credit rating perspective as compared with the prior quarter.
There could be several reasons for non-compliance with statutory requirements for paying of GST and Provident Fund and filing the Returns. Of these, cash flow delays or liquidity problems that business entities face are probably the most important drivers for non-compliance. Similarly, changes in Credit Ratings need to be examined closely in order to understand the reasons behind the change. A deterioration in any of the above parameters for the business entities should raise red-flags and serve as early warning signals for those monitoring the portfolio, according to a release here today.