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Fintech company, Lendingkart on July 2 raised a debt funding of Rs 75 crore. The company will use the new funds to originate MSME loans across all states, the company said in a press release.

The fintech startup in the working capital space has raised Rs 25 crores in debt from GMO LLC and Rs 50 crores from Triodos Investment Management via NCDs.

“The newly infused funds will help us in increasing our reach and service more pin codes across the country. It is our constant endeavor to empower the MSMEs and small businesses and we will continue to bridge the financial gaps for small businesses,” said Harshvardhan Lunia, CEO & Founder at Lendingkart.

Founded in 2014 by Lunia, Lendingkart has offices in Ahmedabad, Bengaluru, Mumbai, Gurugram, and has service reach across India. The group is financed by reputed international investors like Fullerton Financial Holding (FFH) (100% subsidiary of Singapore Sovereign Fund Temasek Holdings), Bertelsmann, Mayfield India, Saama Capital, Sistema Asia, India Quotient, and others and has raised around Rs 1050 Crores of equity till date.

The Company has developed technology tools based on big data analysis and machine learning algorithms which facilitate lenders to evaluate borrower's creditworthiness and provide other related services.

GMO LLC provides various payment and financial related solutions and platforms to companies to promote cashless and DX and built payment infrastructure.

Triodos Investment Management, a wholly owned subsidiary of Triodos Bank, invests to generate social and environmental impact alongside a healthy financial return.

The Mauritius Revenue Authority (MRA) has clarified that foreign entities based in the island country need not pay additional capital gains tax following representations from private equity firms which have invested in India.

The MRA said in respect to distributions made by foreign fiscally transparent entities to Mauritian residents, it wishes to clarify that income, which is distributed by a foreign fiscally transparent entity, retain its initial character in Mauritius.

"As such, any capital gains eventually distributed by a foreign fiscally transparent entity to a Mauritian resident shall be treated as capital gains and thus, are not subject to income tax in Mauritius," it said in a late evening clarification.

The Indian Venture and Alternate Capital Association (IVCA) had said yesterday that the MRA ruling to tax capital gains from India would fundamentally alter the character of all income arising from Indian alternative investment funds (AIFs) and lead to increased litigation and uncertainty for India-bound investments.

IVCA had said the move to treat all income from Indian AIFs as dividends and not as constituent income flows (dividend, interest or capital gains), will wreak havoc on funds with a presence in Mauritius and investments in India. The MRA clarification will help the Mauritius based PEs to invest in India.

The government would depend on its public capital expenditure programme to revive demand in the economy and might not go for sector-specific fiscal measures, Finance Minister Nirmala Sitharaman told Business Standard on Friday.

In a wide-ranging interview, Sitharaman said the Centre would finalise the privatisation of a public sector bank soon. Also, the fiscal deficit and growth situation were very comfortable this year in spite of continuing external headwinds, she added.

“The route we have chosen and the one we are sticking with is capex. Even during the pandemic, we adopted this method of spend on capital assets to ensure economic revival. And states really showed that they had the absorptive capacity,” Sitharaman said.

The Centre’s capex outlay is estimated at Rs 7.5 trillion in FY23. Of that, Rs 1 trillion will go to states as a long-term, interest-free loan for their capex needs, according to the FM.

The entire Rs 1 trillion could be given to states in the July-September quarter itself. “Many states are ready with their plans to spend the capex on greenfield or brownfield projects. The rules for distributing the Rs 1 trillion loan were framed by late April and states brought their projects for evaluation in May.”

Sitharaman said she was confident that the amount (Rs 1 trillion) would be picked up by states before the end of the second quarter.

Speaking on the biggest challenge for fiscal and monetary policymakers — inflation — Sitharaman said the 6 per cent upper limit of the Monetary Policy Committee’s (MPC’s) medium-term inflation target was a ‘sacred’ number.

“The challenges are all external. Our inflation is nowhere near what countries have experienced. But even this will be burdensome on our people, because we have people with very low income who can’t afford to have that kind of burden on themselves,” she said.

Headline retail inflation for May 2022 cooled down from the 8-year high of the previous month to settle at 7.04 per cent. It was still a fifth straight month of headline retail inflation staying above the MPC’s medium-term target of 4 (+/-2) per cent. The Reserve Bank of India expects inflation to average above the 6 per cent mark till the October-December quarter.

Sitharaman said the economy recovered strongly from the three waves of the Covid-19 pandemic because the Centre took a “variegated approach’’ for different sectors rather than opting for “one size fits all” measures.

“We had our way of handling the pandemic and that was very much tailored to the uniqueness of the Indian economy. In that, you have a large number of medium and small-scale industries spread across so many sectors. You had to have one kind of solution for one area,” she said.

ALSO READ: Trust between Centre and states intact in GST Council: FM Sitharaman

The government is going on with its plans of bank privatisation, the FM pointed out. “We’ll keep going. The plans are almost ready and we will bring amendments to the Banking Regulation Act soon.” Referring to banking as a “strategic sector”, she said the Centre would continue owning some banks. However, in the banks which the government decides to exit, it could do so completely. “I can exit some banks completely. But whether we do that or we keep some stake is all part of the decision-making process,” she said.

While there has been no official confirmation from the government, Central Bank of India and Indian Overseas Bank are said to be the candidates for privatisation.

On extension of compensation to states after the recent GST Council meeting, the FM said the trust between the Centre and states was intact because the Centre had not failed on its promises.

“I have heard the states. The two Covid-hit years cannot be taken to measure any kind of revenue growth percentage. And after that also, when revival is taking place, about 8-9 per cent is the most that the best-performing states have reached,” Sitharaman said.

On the National Stock Exchange scam, involving its former chief executive officer Chitra Ramakrishna, the finance minister said it was felt that the Securities and Exchange Board of India (Sebi) did not take sufficient action.

“Nobody is interested in damaging NSE as it has a huge contribution to make in the financial markets. But equally, it cannot be that you do things which can hurt the confidence of the markets,” she said.

“That’s what the CBI is going into. And that’s what the regulator Sebi is also looking at, because what was felt that sufficient action hadn’t been taken by Sebi at the time it happened. Probably some token action was taken, but it didn’t address all the issues related to this scam.”

Petrol and diesel prices will remain steady on July 2, the latest price notification issued by fuel retailers shows, with prices staying unchanged for more than a month after the government on May 21 cut the excise duty on petrol by Rs 8 a litre and on diesel Rs 6 a litre.

The duty cut brought down the petrol price in Delhi by Rs 9.5 and Rs 7 for diesel. Petrol in Delhi costs Rs 96.72 and diesel Rs 89.62 a litre.

In Mumbai, petrol is selling at Rs 111.35 and diesel at Rs 97.28. Petrol and diesel are priced at Rs 102.63 and Rs 94.24 in Chennai, while in Kolkata, petrol is at Rs 106.03 and diesel at Rs 92.76.

Oil marketing companies are incurring a loss of Rs 13.08 a litre on petrol and Rs 24.09 on diesel even as they pass on the excise duty cut to consumers in the country. India meets 80 percent of its fuel needs through imports.

Globally, oil prices gained more than two percent on July 1 as supply outages in Libya and expected shutdowns in Norway outweighed expectations that an economic slowdown could dent demand.

Benchmark Brent crude futures settled at $111.63 a barrel, rising $2.60, or 2.4 percent. West Texas Intermediate crude (WTI) settled at $108.43 a barrel, gaining $2.67, or 2.5 percent.

WTI and Brent traded at about 70 percent and 77 percent, respectively, of the previous session's volumes ahead of the Fourth of July holiday in the US.

For the week, Brent lost 1.3 percent, while WTI rose 0.8 percent. For June, both benchmarks had ended the month lower for the first time since November.

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Domestic rating agency Crisil on Friday lowered its real GDP growth forecast for India to 7.3 per cent in FY23 from 7.8 per cent estimated earlier.

It attributed the downward revision to higher oil prices, slowing of export demand and high inflation.

This is in line with the RBI's estimate of 7.2 real GDP growth for this fiscal year.

Crisil said there are a slew of negatives like high commodity prices, elevated freight prices, drag on exports as global growth projections get lowered, and the largest demand side driver of private consumption remaining weak.

The only bright spots are the uptick in contact-intensive services and forecast of a normal and well-distributed monsoon, it said, lowering its growth outlook.

Inflation, which has been pegged to average at 6.8 per cent in FY23 as against 5.5 per cent in FY22, reduces purchasing power and would weigh on revival of consumption the largest component of GDP which has been backsliding for a while, the agency said.

Factors contributing to the broad-based rise in inflation will include the impact of this year's heatwave on domestic food production, coupled with persisting high international commodity prices and input costs, it said.

The agency also said that with higher commodity prices, slowing global growth and supply chain snarls, the current account will be impacted, and estimated the current account deficit to widen to 3 per cent of GDP in FY23 from 1.2 per cent in FY22.

This will put pressure on the currency, and the rupee is estimated by the agency to be at 78 to the US dollar in March 2023, compared to 76.2 in March 2022.

The rupee-dollar exchange rate will remain volatile with a depreciation bias in the near term due to a widening trade deficit, foreign portfolio investment (FPI) outflows and strengthening of the US dollar index (owing to rate hikes by the US Federal Reserve, or Fed, and safe-haven demand for the dollar amid geopolitical risks), it said.

The agency expects global crude to average between USD 105-110 per barrel in FY23, which is higher by 35 per cent when compared to the last fiscal year's and will be the highest price since 2013.

High commodity prices have a domino effect on India. As the terms of trade worsen with a rising import bill, imported inflation surges, it said.

With inflation rising, the RBI is expected to hike rate by another 75 basis points during the fiscal on top of the 90 basis points hikes already announced, it said.

It, however, said that the rising interest rates will not dent growth prospects in a big way as real interest rates are likely to remain lower than the pre-pandemic levels and monetary policy actions get transmitted with a lag, it said.

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India’s attempt to reform military recruitment — which has set off political convulsions that show no signs of abating — once again shows that its aspirations to superpower status are no match for a below-par economy.

India’s military — particularly its army — is antiquated in organisation and manpower-heavy. After some ill-advised, populist, and expensive tinkering with pensions early in its tenure, the government found it was spending all its military budget on personnel, leaving very little for modernisation or for hardware.

Meanwhile, for more than two decades, its own strategists have been calling for a leaner and younger army. The average Indian soldier is 32 or 33, making its army one of the oldest in the world.

So, after two years in which the army suspended its typical annual enlistment of 60,000 young men on 20-year contracts, the government announced it was shifting to a tour-of-duty type system in which new recruits will be taken on for four years and then sent off with a handsome and tax-free discharge bonus of $15,000.

This has set off a firestorm of protest. Literally, in some cases, as angry would-be army recruits set trains — a very visible symbol of the Union government even the most remote parts of India — alight.

The problem is that, for many young men in the most economically disadvantaged parts of India, the army is their only hope of a career — or, for that matter, of getting married, given that years of sex-selective abortions have caused the gender ratio in those parts of India to skew heavily male.

These men — or boys, since they’re mostly teenagers — have spent years running and practicing drills in hopes of getting selected.

Before the new recruitment system was announced, a typical applicant told a reporter for the Print: “If I don’t get a job in the army, my chances of living with dignity in my society are very low. My chances of marrying go down. People will mock me at every function.” Those who do return to their villages after their 20 years of service, on the other hand, tend to be respected and wind up in positions of local leadership.

It’s telling that the protests, and the anger, have largely been limited to the poorest parts of India, where other employment opportunities are scarce. The government has tried to emphasize the $15,000 payout the four-year men will receive and claimed that army training will make them more attractive on the job market. That argument holds less sway in areas where there’s little prospect of finding a good job today or four years from now.

The government has done itself no favours by obscuring its real motivations. Everyone knows this is about reducing the amount the military spends on salaries and creating an army that is younger and more agile technologically. At the same time, the government won’t reveal its plans for military transformation.

Forget about detailing how much money the programme would save; we don’t even know for certain how many people are currently employed by India’s military. For some reason, that’s treated as a state secret. (It’s estimated to be around 1.4 million, about half as many again as in China.)

Prime Minister Narendra Modi is generally credited with having an instinctive understanding of what voters want. Yet it’s astounding how often his government designs policies in secret that then elicit a furious public reaction. While military reform was inevitable and overdue, surely it could have been discussed in public so that at least the current generation of aspirants would have known better than to run kilometres a day to get themselves in shape.

As with farmer-led protests last year, there’s a chance the government will be forced to retreat in the face of this unwavering hostility in areas that remain politically powerful, if economically weak.

A reversal would carry its own costs, however. In an aspiring superpower the military should be an instrument designed to project power, ensure domestic security, and respond to emerging threats. What India is learning is that, given its failure to create jobs, its army must also remain something of an employment generation scheme. If the country wants to play a bigger role in its region and in the world, it will first need to fix its economy.

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India's factory output expanded at its slowest pace in nine months in June as elevated price pressures continued to dampen demand and output, according to a private survey, which also showed business confidence was at its lowest in over two years.

Although inflation eased in May to 7.04% after touching an eight-year high of 7.79% in April, a meaningful decline is not seen anytime soon even as the Reserve Bank of India is expected to continue with aggressive rate hikes.

While the Manufacturing Purchasing Managers' Index, compiled by S&P Global, remained resilient, it fell to a nine-month low of 53.9 in June from May's 54.6, lower than the Reuters poll median prediction of 54.5.

It has been above the 50-level separating growth from contraction for a year, indicating growth in the sector has remained solid.

"The Indian manufacturing industry ended the first quarter of fiscal year 2022/23 on a solid footing, displaying encouraging resilience in the face of acute price pressures, rising interest rates, rupee depreciation and a challenging geopolitical landscape," noted Pollyanna De Lima, economics associate director at S&P Global Market.

"Yet, there was a broad-based slowdown in growth across a number of measures such as factory orders, production, exports, input buying and employment as clients and businesses restricted spending amid elevated inflation."

New orders and output grew at their weakest rate since September last year and firms hired at a slower pace in June.

However, a sub-index tracking delivery times of goods was above the 50-mark for the first time since February 2021 and at its highest in nearly three years, signalling an easing in supply chain pressures.

That partly helped both input and output prices, which increased at a slower rate last month, but a respite from the cost of living crisis still looks a distant possibility.

Indeed, business optimism declined to its lowest since the onset of the pandemic over two years ago.

Asserting that the GST had serious "birth defects" which became only worse over the last five years, the Congress on Friday said the GST laws and the manner of their implementation have "wrecked the economy" and the party will work toward its replacement by GST 2.0.

The Opposition party said demonetisation was the first "Tughlaqi farman" of the government while the Goods and Service Tax second that harmed the economy.

At a press conference here, senior Congress leader P Chidambaram said the GST "celebrates" its fifth birthday on Friday but there is nothing really to celebrate.

"The GST had serious birth defects. In the last five years these defects have only become worse and all those touched by GST have been seriously injured," the former finance minister said.

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The Congress wishes to make it absolutely clear that the so-called GST that is in force today was not the GST envisaged by the UPA government, he said.

"The GST that we have today is a complex web of many rates, conditions, exceptions and exemptions that will leave even an informed taxpayer completely bewildered. Not all registered dealers are informed taxpayers; as a result, they are at the mercy of the tax-collector," he said.

A flawed GST has led to "large-scale destruction" of MSMEs, a sector that contributes up to 90 per cent of the jobs in the manufacturing sector, he said.

The worst consequence of the GST brought in by the government has been a complete breakdown of trust between the Centre and states, he said.

"As far as the Congress Party is concerned, we reject the current GST and, as promised in the Election Manifesto of 2019, we will work toward the replacement of the current GST by GST 2.0 that will be single, low-rate," Chidambaram said.

Finance Minister Nirmala Sitharaman has defended the government's move to impose a windfall tax on oil producers and levy a special additional cess on the export of fuel products, saying the current situation is "extraordinary".

"We are happy that exports are happening. We are happy that companies are making profits. We are happy that exports are giving them (companies) that kind of returns on what they invested, which is so required for anybody who makes those investments. But these are extraordinary times," Sitharaman said in the Capital on July 1 on the sidelines of an event marking the fifth anniversary of the implementation of the Goods and Services Tax (GST) regime.

"These are times when oil prices internationally are unbridled. They are just going on and on upwards. And for any country - like India for instance - which depends very much largely on imports, we also need to pay that kind of money to get it," the finance minister added.

Earlier today on July 1, the government announced it was imposing a cess of Rs 23,250 per tonne as special additional excise duty on crude as domestic crude producers are making "windfall gains" amid sharply higher crude oil prices. Further, cesses amounting to Rs 6 per litre on petrol and Rs 13 per litre on diesel have been imposed on their export, while a special additional excise duty of Rs 6 per litre has been imposed on the export of Aviation Turbine Fuel.

Shares of oil companies like Oil and Natural Gas Corporation and Oil India sank after the government measures were announced.