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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.

The Govt or Maharashtra has issued a notification declaring 29th June 2023 as a Public Holiday for Bakri Id. The holiday for 28th June 2023 has been cancelled.

Copy of Notification is attached.

Continuing its downward trend, the annual rate of inflation based on all India Wholesale Price Index (WPI) numbers fell – 3.48% (Provisional) for the month of May, 2023 (over May, 2022) against –  0.92% recorded in April, 2023. The decline in the rate of inflation in May, 2023 is primarily contributed by fall in prices of mineral oils, basic metals, food products, textiles, non-food articles, crude petroleum & natural gas, and chemical & chemical products.  The month over month change in WPI for the month of May, 2023 stood at – 0.86 % as compared to April, 2023. 

The index for primary articles declined by 1.13% to 175.3 (provisional) in May, 2023 from 177.3 (provisional) for the month of April, 2023. Prices of Minerals (0.90%) increased in May, 2023 as compared to April, 2023. Prices of Food Articles (-0.22%), Non-food Articles (-1.87%) and Crude Petroleum & Natural Gas (-7.81%) declined in May, 2023 as compared to April, 2023.

Fuel & Power declined by 2.62% to 148.6 (provisional) in May, 2023 from 152.6 (provisional) for the month of April, 2023. Prices of Coal (-0.67%), Mineral Oils (-2.01%) and Electricity (-5.46%) declined in May, 2023 as compared to April, 2023.

Manufactured Products fell by 0.35% to 140.7 (provisional) in May, 2023 from 141.2 (provisional) for the month of April, 2023. Out of the 22 NIC two-digit groups for Manufactured products, 7 groups have witnessed an increase in prices, whereas 11 groups have witnessed a decrease in prices. 

The groups that have recorded major increases in prices are electrical equipment; pharmaceuticals, medicinal, chemical and botanical products; tobacco products; wood and products of wood & cork; leather and related products; beverages, etc. Some of the groups that have witnessed a decrease in prices are basic metals; food products; textiles; chemical and chemical products, other manufacturing etc. in May, 2023 as compared to April, 2023.

The Production Linked Incentive (PLI) Schemes have led to a significant increase in production, employment generation, economic growth and exports in the country. Rajesh Kumar Singh, Secretary, DPIIT, said that PLI Schemes have led to a significant increase of 76% in FDI in the manufacturing sector in FY 2021-22 (USD 21.34 billion), compared to the previous FY 2020-21 (USD 12.09 billion).

As per the Government, sectors for which PLI schemes exist and have seen an increase in FDI inflows from FY 2021-22 to FY 2022-23 are Drugs and Pharmaceuticals (+46%), Food Processing Industries (+26%) and Medical Appliances (+91%). To date, 733 applications have been approved in 14 Sectors with an expected investment of Rs.3.65 Lakh Crore. 176 MSMEs are among the PLI beneficiaries in sectors such as Bulk Drugs, Medical Devices, Pharma, Telecom, White Goods, Food Processing, and Textiles & Drones.

Actual investment of Rs. 62,500 Crore has been realised till March 2023, resulting in incremental production/ sales over Rs. 6.75 Lakh Crore and employment generation of around 3,25,000. Exports boosted by Rs 2.56 lakh crore till FY 2022-23.

Incentive amount of around Rs. 2,900 Crore disbursed in FY 2022-23 under PLI Schemes for 8 sectors – Large-Scale Electronics Manufacturing (LSEM), IT Hardware, Bulk Drugs, Medical Devices, Pharmaceuticals, Telecom & Networking Products, Food Processing and Drones & Drone Components.

Import substitution of 60% has been achieved in the Telecom sector and India has become almost self–reliant in Antennae, GPON (Gigabit Passive Optical Network) & CPE (Customer Premises Equipment). Drones sector has seen a 7 times jump in turnover due to the PLI Scheme which consists of all MSME Startups.

Under the PLI Scheme for Food Processing, the sourcing of raw materials from India has seen a significant increase which has positively impacted the income of Indian farmers and MSMEs.

The Reserve Bank of India has issued various instructions to regulated entities (REs) regarding compromise settlements in respect of stressed accounts from time to time, including the Prudential Framework for Resolution of Stressed Assets dated June 7, 2019 “Prudential Framework”, which recognises compromise settlements as a valid resolution plan. 

As per the RBI, the provisions of this framework shall be applicable to all REs to which this circular is addressed and shall be without prejudice to the provisions of the Prudential Framework, or any other guidelines applicable to the REs on resolution of stressed assets.

REs shall lay down Board-approved policies for undertaking compromise settlements with the borrowers as well as for technical write-offs. The Board approved policy shall comprehensively lay down the process to be followed for all compromise settlements and technical write-offs, with specific guidance on the necessary conditions precedent such as minimum ageing, deterioration in collateral value etc. The policies shall also put in place a graded framework for examination of staff accountability in such cases with reasonable thresholds and timelines as may be decided by the Board.