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Central Government approves 8.15% interest for EPF account for 2022-23

Copy of circular attached.

The Asian Development Bank (ADB) on Wednesday retained India’s economic growth forecast at 6.4 per cent for the current financial year and 6.7 per cent for the next, saying robust domestic demand will continue to support the region’s recovery.

In an update to its Asian Development Outlook, the ADB said inflation is expected to continue to fall, approaching pre-pandemic levels as fuel and food prices decline. It forecast 3.6 per cent inflation this year for developing economies in Asia, and 3.4 per cent in 2024.

The Indian economy grew 7.2 per cent in the 2022-23 fiscal ended March 2023. “Asia and the Pacific continues to recover from the pandemic at a steady pace,” ADB Chief Economist Albert Park said. “Domestic demand and services activity are driving growth, while many economies are also benefiting from a strong recovery in tourism. However, industrial activity and exports remain weak, and the outlook for global growth and demand next year has worsened, Park added.

ADB’s outlook has also pegged a decline in inflation, approaching pre-pandemic levels as fuel and food prices decline. It forecast 3.6 per cent inflation for Asia’s developing economies and 3.4 per cent in 2024.

July 18, 2023, Mumbai: Speaking at the 187th AGM of Bombay Chamber of Commerce & Industry yesterday, Shri Piyush Goyal, Union Minister for Commerce & Industry, Consumer Affairs, Food & Public Distribution and Textiles, said that Atmanirbhar Bharat is India’s goal, but that does not mean that the country is closing its doors to the world. “It does not mean we are living in a cocoon or a shell. We are in fact opening our doors wider. We want to have greater international trade and want to be a part of global supply value chains. We recognise that different countries/geographies have comparative or competitive advantages which we should leverage on, but at the same time we want to open the doors of other markets for products where we have skills, capabilities and the competitive edge. Therefore, a focus on FTAs or comprehensive economic partnerships with world leaders and developed economies has been the core of our commerce agenda. We have had record exports, but, currently, as recession sets in, discretionary spending is lukewarm. Products which are our strength areas are currently under stress. In this situation it is incumbent on all of us to work as a team and make the India story the compulsive story of the world.”

He further spoke about the three ‘D’s that make India a great opportunity. “Democracy, Demographic dividend (young population expected to remain young for the next 3 or 4 decades and the Demand that aspirational India generates – these three Ds drive our economy making it the fastest growing one in the world today,” he said.

Speaking about the business climate in the run up to the 2024 elections, Guest of Honour, Sanjay Pugulia, CEO and Editor-in-chief, AMG Media Network, opined that he expects no dramatic change in the political scene. “Policy making has got completely delinked from electoral outcomes. Even with a coalition government, the policy trajectory is not going to change. We are one of the fastest growing economies of the world and that is not going to change.”
However he cautioned, “What is important is, have we created the enabling systems for big money to flow in? We have to work on that.”

In his opening notes, Sandeep Khosla, Director General, Bombay Chamber of Commerce & Industry said that the Chamber with a long and illustrious history is keeping with the times by initiating several modern concepts like the recent DEI Awards, one of its kind by a Chamber in India.

In his Presidential address, Nilesh Shah, outgoing President, Bombay Chamber of Commerce & Industry and Group President & MD, Kotak Mahindra AMC, outlined the Chamber’s various path breaking initiatives and said, “The Chamber’s USP is its intellectual capital. Nearly 60 per cent of our membership comes from the MSME sector and we play a pivotal role in acting as a bridge between them and the regulatory bodies.” Commenting on India’s emerging role as an investment destination, he added that clearly global investors are seeing the three Gs – Growth, Governance and Green – in India, resulting in an appropriate advantage for the Indian economy.

In his mission statement, Ritesh Tiwari, incoming President, Bombay Chamber of Commerce & Industry and CFO, Hindustan Unilever Ltd and Unilever South Asia, said, “My mission statement is an attempt to marry the rich legacy of our Chamber with the opportunities we can unleash in this new global world by working together as India Inc. As stakeholders of our society and community, it is important that we acknowledge the role we must play in enabling growth and development of our country. It is equally important to understand that we are not in a perpetual race – this is not a zero-sum game. The more we come together as leaders of India Inc and work with the government and regulators, higher will be the value we can unlock for all of us. I call it ‘Collaborative Development ‘. There will be four critical aspects of this mission (1) Embracing Digitalisation (2) Bringing sustainability at the heart of business (3) Fostering Diversity, Equity, and Inclusion (4) Enhancing Ease of Doing Business.”
Hitendra Dave, Sr. Vice President Designate, Bombay Chamber and CEO, HSBC India, delivered the Vote of Thanks.

In a bid to facilitate seamless cross border transactions and payments, and foster greater economic cooperation between the two countries, the Reserve Bank of India (RBI) and Central Bank of UAE (CBUAE) signed two MoUs for establishing a Framework to Promote the Use of Local Currencies – the Indian rupee (INR) and the UAE Dirham (AED) for cross-border transactions; and cooperation for interlinking their payment and messaging systems. The MoUs were signed by the Governor of the Reserve Bank of India, Shaktikanta Das and the Governor of the Central Bank of UAE, Khaled Mohamed Balama.

The MoU on establishing a framework for the use of local currencies for transactions between India and UAE, aims to put in place a Local Currency Settlement System (LCSS) to promote the use of INR and AED bilaterally. The MoU covers all current account transactions and permitted capital account transactions. Creation of the LCSS would enable exporters and importers to invoice and pay in their respective domestic currencies, which in turn would enable the development of an INR-AED foreign exchange market. This arrangement would also promote investments and remittances between the two countries. Use of local currencies would optimise transaction costs and settlement time for transactions, including for remittances from Indians residing in the UAE.

Under the MOU on ‘Payments and Messaging Systems’, the two central banks agreed to cooperate on (a) linking their Fast Payment Systems (FPSs) – Unified Payments Interface (UPI) of India with Instant Payment Platform (IPP) of UAE; (b) linking the
respective Card Switches (RuPay switch and UAESWITCH); and (c) exploring the linking of payments messaging systems i.e., Structured Financial Messaging System (SFMS) of India with the messaging system in the UAE.

The UPI-IPP linkage will enable users in either country to make fast, convenient, safe, and cost-effective cross-border funds transfers. The linking of Card Switches will facilitate mutual acceptance of domestic cards and processing of card transactions. The linkage of messaging systems is aimed to facilitate bilateral financial messaging between the two countries.

July 13, 2023, Mumbai: The winners of the inaugural Bombay Chamber DEI Awards were announced at a glittering ceremony at Four Seasons Hotel Mumbai last night. With Ernst & Young as thought partners, the Awards saw a whopping 83 nominations from 51 companies across 5 categories: Disability Confidence and Inclusion Award, LGBTQ+ Inclusion Award, Gender Equality Champion Award, DEI Award for Program and DEI Champion Award. To encourage Micro, Small and Medium Enterprises (MSMEs) in creating inclusive workplaces, the Chamber instituted a Special MSME Award. The Chamber received a total of 12 MSME nominations across categories.

In his Welcome address, Nilesh Shah, President, Bombay Chamber of Commerce & Industry and Group President and MD, Kotak Mahindra AMC said, “Diversity, Equity, and Inclusion or DEI is important to company culture because it fosters creativity, fresh perspectives, and understanding. What’s more, Diverse and Inclusive workplaces allow employees to work together as equally valued contributors. In fact, workplaces that prioritise diversity and inclusion efforts have been statistically proven to be safer, happier and more productive work environments. From improving employee productivity and creativity to reducing turnover rates and boosting employee morale, strong DEI can be good for your bottomline. But it is prudent to remember here that the change must start with ourselves as people. When things change within you, things will change around you.”

While setting the theme for the Awards ceremony, Ritesh Tiwari, President Designate, Bombay Chamber of Commerce & Industry and CFO, Hindustan Unilever Ltd and Unilever South Asia said, “Equity, Diversity, and Inclusion are not just moral imperatives but essential drivers of business success. It is therefore important to understand and appreciate that driving DEI is not just an HR priority, it is a powerful business imperative. It is not a box to be checked or a token gesture; it is the very foundation on which our businesses are built. In essence for me, DEI is about two key elements – creating equal opportunities and secondly, an environment of psychology safety. As leaders of India Inc, it is important to recognise that it is really upon us to set the tone on this. The consumers we serve are diverse in gender, thoughts, ethnicity, abilities and so on and therefore our organisations catering to them cannot be any different.”

Moderating a panel discussion on Changing Dynamics of DEI in India Inc, Meenakshi Priyam, Chairperson of the Chamber’s D&I Committee and CHRO, Udaan said, “As a nation we have a rich tapestry of diversity in our heritage. The journey of Diversity, Equity and Inclusion – a vast area that includes gender balance across genders but even more – is critical for the growth of our nation and industry. We still have a journey ahead as an industry in this space. These Awards brought to fore such inspiring and world leading work that companies are doing to further this agenda and we feel privileged to enable it. We hope that this continues to be a platform to engage, dialogue and celebrate DEI across large corporates and MSMEs as we move ahead.”

The panelists included Dr. Indu Shahani, Founding President & Chancellor, ATLASSkillTech University; Ravindra Kumar, CHRO, Tata Motors; Sushant aka Rani Ko-He-Nur, Performing Artiste-Singer/Actor and Equal Rights Champion and Sachin Rajan, MD, Russell Reynolds Associates.

The Winners of the Bombay Chamber DEI Awards 2023:

Category: Disability Confidence & Inclusion Award

Winner: Future Generali India Insurance Company Limited

1st Runner Up: LTIMindtree

2nd Runner Up: Deutsche Bank Group India

Category: LGBTQIA+ Inclusion Award

Winner: Godrej Properties Limited

1st Runner Up: Axis Bank

2nd Runner Up: LTIMindtree

Category: Gender Equality Champion Award

Winner: Godrej Consumer Products Limited

1st Runner Up: Thermo Fisher Scientific India Pvt. Ltd.

2nd Runner Up: Standard Chartered Bank, India

Category: DEI Award for Program

Winner: Tata Motors Limited

1st Runner Up: Zomato Limited

2nd Runner Up: Indian Hotels Company Limited

Category: Special Award for MSMEs

Winner: NICHEM SOLUTIONS

1st Runner Up: AIRA Consulting Pvt. Ltd.

2nd Runner Up: HTMC Group

Category: DEI Champion Award

Winner: Tech Mahindra Limited

1st Runner Up: LTIMindtree

2nd Runner Up: Reliance Jio Infocomm Limited

A total of 415 million people moved out of poverty in India within just 15 years from 2005/2006 to 2019/2021, the UN said, highlighting the remarkable achievement by the world’s most populous nation. The latest update of the global Multidimensional Poverty Index (MPI) was released by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI) at the University of Oxford. India was among the 19 countries that halved their global Multidimensional Poverty Index (MPI) value during one period

It said that 25 countries, including India, successfully halved their global MPI values within 15 years, showing that rapid progress is attainable.

In April, India surpassed China to become the world’s most populous nation with 142.86 crore people, according to UN data. The report demonstrates that poverty reduction is achievable. However, the lack of comprehensive data during the period of the COVID-19 pandemic poses challenges in assessing immediate prospects, it said.

In India, 415 million poor people moved out of poverty from 2005/2006 to 2019/2021, with incidence falling from 55.1 per cent in 2005/2006 to 16.4 per cent in 2019/2021.

In 2005/2006, about 645 million people were in multidimensional poverty in India, with this number declining to about 370 million in 2015/2016 and 230 million in 2019/2021.

The report noted that deprivation in all indicators declined in India, and “the poorest states and groups, including children and people in disadvantaged caste groups, had the fastest absolute progress.” According to the report, people who are multidimensionally poor and deprived under the nutrition indicator in India declined from 44.3 per cent in 2005/2006 to 11.8 per cent in 2019/2021, and child mortality fell from 4.5 per cent to 1.5 per cent.

Mumbai, 07 July, 2023: The Bombay Chamber of Commerce & Industry, in collaboration with Depository Partner, CDSL, organised the first PE&VC Conclave on the theme “Creating a Vibrant Private Market.” The event, held under the aegis of the PE&VC Committee, aimed to address the challenges and opportunities in India’s private market landscape. The conclave shed light on the challenges facing the private market, including the need for a clear regulatory framework, tax parity for international private capital investing, and onshoring of offshore investments. It also emphasised the responsibility of industry players to exercise better corporate governance and collaborate with policymakers and regulators to create a more vibrant and attractive segment that powers India’s growth.

Welcoming the audience, Sandeep Khosla, Director General, Bombay Chamber, highlighted the Chamber’s commitment to facilitating effective communication between regulatory bodies, corporates, and society, as well as its dedication to fostering a conducive environment for trade and industry in Mumbai and India.

Anjali Bansal, Past President, Bombay Chamber and Founding Partner, Avaana Capital, set the theme for the event with her insightful remarks. She highlighted India’s vibrant startup ecosystem, rapid growth in the AIF regime, and the country’s aspiration to become a 20 trillion-dollar economy. Bansal acknowledged the instrumental role played by the government in promoting entrepreneurship through policies such as Startup India and Digital India, which have contributed to the remarkable growth of the startup ecosystem.

Addressing the audience, Nehal Vora, Managing Director & CEO of CDSL, spoke about the key building blocks for the growth of PE&VC investments and startups in the Indian market. He emphasised the importance of corporate governance and building trust to create valuation for both investors and companies. Vora highlighted the transformative reforms in the Indian capital markets, such as the shift to online trading, dematerialisation, and the establishment of robust market infrastructure institutions. He commended SEBI’s vision in creating a digital platform that fosters trust and enables widespread participation in the capital markets.

In his keynote address, Shri. Ananth Narayan Gopalkrishnan, Whole-time Member, SEBI shed light on the private equity space and SEBI’s outlook towards Alternative Investment Funds (AIFs). Shri. Gopalkrishnan highlighted the impressive growth of the private equity sector over the past few years. He mentioned that AIF investment commitments reached 8.3 Lakh crores as of March 2023, showing a compounded annual growth rate of 38%. Actual money invested in AIFs demonstrated a compounded annual growth rate of 40% over the last five years, totaling 3.4 Lakh crores.

Addressing the funding landscape, Shri. Gopalkrishnan noted that commitment in the AIF space has been rising by 2 lakh crores over the past two years, with 60% of the commitment coming from domestic participants and 40% from foreign investors. The number of AIFs has also increased to 1100, showcasing a 50% annual compounded growth rate and reflecting a thriving ecosystem. He emphasised that this early-stage capital contributes to wealth creation, investments, job creation, and GDP growth.

Shri. Gopalkrishnan underscored the three pillars of SEBI’s mandate: investor protection, market development, and market regulation. He emphasised that trust forms the foundation of the entire system, and SEBI’s role is to minimise errors and build trust within the capital formation process. He highlighted the substantial growth in equity investments made by regional funds, which rose from less than 4 lakh crores to over 24.5 Lakh crores. Shri. Gopalkrishnan also emphasised three key areas on SEBI’s radar: valuation, potential regulatory arbitrage, and misselling. He reassured companies that SEBI is open to receiving details of any wrongdoing in the market and encouraged them to build trust and credibility in the ecosystem. He acknowledged India’s immense potential for growth, highlighting its entrepreneurial spirit and strong work culture.

The conclave featured two insightful panels addressing crucial aspects of the private market. The first panel of the day, moderated by Nimesh Kampani, Founding Partner, 108 Capital saw Madhu Lunawat, – CIO, India Inflection Opportunities Fund, Satyam Kumar, CEO & Co-Founder, LoanTap Financial Technologies, Ashish Fafadia, Partner, Blume Venture Advisors, and Ritwick Ghoshal, Managing Partner & CEO, Bay Capital Investment Advisors give their insight into the topic Business Opportunities, Challenges & the Future: Driving Private Investments. The panel explored the current situation of the private market in India amidst the funding winter, examined the available exit options for companies, assessed the challenges and opportunities in raising debt or equity swiftly, discussed cost of equity vs cost of debt and envisioned ways to create a systematic platform for private markets. 

The second panel, on Creating a Conducive Tax and Regulatory Environment, moderated by Rahul Shah, Executive Vice President, Indian Venture Capital Association (IVCA) saw panelists Dr Archana Hingorani, Managing Partner, Siana Capital, Tejas Desai, Partner, Ernst & Young LLP (EY India), Vatsal Gaur, Partner, King Stubb & Kasiva, Advocates & Attorneys and Manish Kumar, Co-founder GREX & RealX share their expertise on the subject. The panel covered aspects including AIF regulations, the GIFT city and the need for enabling infrastructure,  onshoring of offshore fund structures, Angel Tax and the global competitiveness of the Indian PE&VC ecosystem. 

The Conclave concluded with a vote of thanks delivered by Ashith Kampani, Chair, PE&VC Committee, and Chairman, CosmicMandala15 Securities.

According to the survey-based S&P Global India Manufacturing Purchasing Managers’ Index (PMI), manufacturing growth in June showed a slight moderation. The index decreased from 58.7 in May to 57.8 in June. However, despite the moderation, new orders experienced rapid growth, leading firms to increase production at one of the fastest rates in 18 months. Alongside this, output charges were raised at the quickest pace since May 2022.

June marked the 24th consecutive month with a PMI reading above 50, indicating expansion in Indian factories. In response to strong demand and increased output, firms hired additional workers, though at a moderate pace similar to May. Overall business confidence among firms reached a six-month high, as reported by S&P Global Market Intelligence.

While factory orders in June showed one of the strongest increases since February 2021, the positive demand dynamics and higher labor costs contributed to charge inflation reaching a 13-month high. However, the growth in export orders moderated compared to May 2023 levels.

Despite raising prices for customers, manufacturers experienced one of the lowest rates of input cost inflation in three years. Consequently, they procured fresh raw materials at the second-fastest pace in over 12 years, reflecting their optimistic and proactive approach to capitalize on favorable market conditions and support production growth, stated by Pollyanna De Lima, economics associate director at the firm. The increase in output charges demonstrated firms’ ability to pass on higher cost burdens to customers while maintaining competitiveness.

The domestic cement industry is expected to have a volumetric growth of 7-8 per cent in FY24, helped by a rise in demand from the housing and infrastructure sector, a report by credit ratings agency, ICRA said, giving a ‘stable’ outlook for the sector.

Besides, the softening of input costs would help the cement industry to improve its operating profits before interest, tax, depreciation and amortisation by 14-18 per cent Year-on-Year (YoY) to Rs 900-950 per MT in FY24, it added.

Moreover, supported by healthy demand prospects, the capacity addition in the cement industry is estimated at 63-69 million metric tonnes (MT) between FY24 and FY25.

In this, a capacity worth around 33-36 million MT will be added in FY24 and a capacity worth around 33-36 million MT will be added in FY24 and around million MT in FY25.

ICRA has given a “stable” outlook for the cement sector.

At a meeting, to discuss the issue of increasing availability of export credit to the MSME exporters.Union Minister of Commerce & Industry, Piyush Goyal has asked Indian banks to ensure enhanced and affordable credit to MSMEs to achieve the target of 1 trillion dollar merchandise exports. This was stated The meeting was convened by the Department of Commerce in coordination with Export Credit Guarantee Corporation Limited, (ECGC). It was attended by the top officials of 21 banks which included State Bank of India, Bank of Baroda, Punjab National Bank, Canara Bank, Union Bank of India, Bank of India and Central Bank of India.

Based on ECGC’s experience under the scheme of enhanced cover, ECGC has now proposed further modifications to make available adequate and affordable credit to a larger section of MSME exporters. The product facilitates the borrower accounts to be treated equivalent to ‘AA’ rated accounts with reduced cost of export credit to the exporters.

In the meeting, Goyal said that the ECGC can examine the extension of the scheme proposed for nine banks, to all the banks, so that the export credit offtake for the MSME Exporters can be increased.

Bankers suggested that ECGC should adopt a claim processing method similar to Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for which the Commerce and Industry Minister advised ECGC to follow a pattern on similar lines to compensate for their loss.

The Minister advised the banks to take advantage of the proposed scheme and extend adequate and affordable export credit to MSME exporters. This would enable the country to achieve its target of USD 1 trillion merchandise exports by 2030. The Minister also advised ECGC to examine 75% claim payment to banks under the ECIB scheme, within 45 days of receiving the claim. It was further informed by the Minister that in the next four months, all the ECGC services would be digitised to minimise physical interaction.