<keyword id="6358777" type="General" weightage="20" keywordseo="new-delhi" source="Orion">New Delhi</keyword>, March 15 (IANS) <keyword id="3658" type="General" weightage="100" keywordseo="india" source="Orion">India</keyword> reported 2,568 new cases in a span of 24 hours, which is a slight increase from 2,503 reported on the previous day, said the Ministry of Health and Family Welfare in its latest update on Tuesday morning. In the same period, 97 deaths were reported, taking the total number of deaths to 5,15,975. In a positive development, India's active caseload has declined to 33,917. Active cases now constitute 0.08 per cent of the country's total positive cases. The recovery of 4,722 patients in the last 24 hours has increased the cumulative tally to 4,24,46,171. Consequently, India's recovery rate stands at 98.72 per cent, said the <keyword id="83655" type="General" weightage="20" keywordseo="union-health-ministry" source="Orion">Union Health Ministry</keyword>. Also in the same period, a total of 7,01,773 tests were conducted across the country. India has so far conducted over 77.97 crore cumulative tests. There has been a sustained fall in the weekly and daily positivity rates too. Weekly positivity rate in the country currently stands at 0.46 per cent and the daily positivity rate is reported to be 0.37 per cent. On the vaccination front, India's Covid-19 vaccination coverage has exceeded 180.40 crore as per provisional reports till 7 a.m. This has been achieved through 2,11,52,628 sessions. More than 17.30 crore balance and unutilised Covid vaccine doses are still available with the states and union territories to be administered, according to the <keyword id="46535" type="General" weightage="20" keywordseo="health-ministry" source="Orion">health ministry</keyword> as of on Tuesday morning. SEE ALSO: <a href="https://www.businessinsider.in/personal-finance/news/epfo-continues-to-give-attractive-interests-rate-compared-to-other-government-schemes/articleshow/90210522.cms">EPFO continues to give attractive interests rate compared to other government schemes</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/paytm-payments-bank-denies-report-claiming-it-leaked-data-to-chinese-firms/articleshow/90203210.cms">Paytm Payments Bank denies report claiming it leaked data to Chinese firms</a>

India records 2,568 COVID-19 cases and 97 deaths in the last 24 hours

Mumbai, Mar 15 (PTI) Equity benchmarks <keyword id="6484188" type="General" weightage="100" keywordseo="sensex" source="Orion">Sensex</keyword> and <keyword id="6354813" type="General" weightage="80" keywordseo="nifty" source="Orion">Nifty</keyword> turned choppy on Tuesday, tracking weakness in index-heavyweight IT stocks amid a mixed trend in Asian equities. Despite opening with strong gains, the 30-share Sensex turned volatile to trade 150 points lower to 56,333.72. The broader NSE Nifty fell 28.50 points to 16,842.80. From the 30-share Sensex pack, Tata Steel, Infosys, Tech Mahindra, HCL Tech and TCS and <keyword id="10862" type="General" weightage="20" keywordseo="wipro" source="Orion">Wipro</keyword> were the prominent losers. On the other hand, <keyword id="6365618" type="General" weightage="20" keywordseo="maruti-suzuki-india" source="Orion">Maruti Suzuki India</keyword>, Mahindra &amp; Mahindra, <keyword id="6355596" type="General" weightage="20" keywordseo="ultratech-cement" source="Orion">UltraTech Cement</keyword>, Asian Paints, <keyword id="6354287" type="General" weightage="20" keywordseo="bharti-airtel" source="Orion">Bharti Airtel</keyword>, and HDFC were among the gainers. In the previous trade, the Sensex jumped 935.72 points or 1.68 per cent to settle at 56,486.02. Similarly, the Nifty climbed 240.85 points or 1.45 per cent to settle at 16,871.30. Bourses in Hong Kong and Shanghai were quoting over 2 per cent lower, while Tokyo was trading marginally higher during the mid-session deals. Stock exchanges in the US settled on a mixed note in the overnight trade. Meanwhile, international oil benchmark Brent crude declined 3.73 per cent to USD 102.9 a barrel. Foreign institutional investors continued their selling spree in Indian markets as they offloaded shares worth Rs 176.52 crore on a net basis on Monday, according to exchange data. Retail inflation hit an eight-month high of 6.07 per cent in February, remaining above the RBI's comfort level for the second month in a row, while wholesale price-based inflation soared to 13.11 per cent on account of hardening of crude oil and non-food item prices, government data showed on Monday. SEE ALSO: <a href="https://www.businessinsider.in/personal-finance/news/epfo-continues-to-give-attractive-interests-rate-compared-to-other-government-schemes/articleshow/90210522.cms">EPFO continues to give attractive interests rate compared to other government schemes</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/careers/news/gail-is-hiring-engineers-with-a-maximum-pay-scale-of-180000-per-month-deadline-tomorrow/articleshow/90216108.cms">GAIL is hiring engineers with a maximum pay scale of ₹1,80,000 per month, deadline tomorrow</a>

Sensex, Nifty off to a volatile start; Tata Steel, Infosys, Tech Mahindra, HCL Tech, TCS and Wipro big losers among Sensex 30 stocks

<ul><li><keyword id="2988161" type="General" weightage="20" keywordseo="ashneer-grover" source="Orion">Ashneer Grover</keyword> has accused <keyword id="7349800" type="General" weightage="20" keywordseo="bharatpe" source="Orion">BharatPe</keyword>’s CEO Suhail Sameer for taking credit for the <keyword id="130134" type="General" weightage="20" keywordseo="gold-loan" source="Orion">gold loan</keyword> vertical Grover had launched.</li><li>Grover has mentioned that he has hired Nikhilesh Govil, the head of BharatPe’s gold loan division, nearly a year ago.</li><li>BharatPe announced its gold loan vertical for their merchants partners yesterday, marking their entering in the secured loans category.</li></ul>BharatPe’s former founder, managing director and chief executive (CEO) Ashneer Grover has accused the merchant payments platform’s latest CEO Suhail Sameer for taking credit for the gold loan vertical Grover had launched. Grover has mentioned that he has hired Nikhilesh Govil, the head of BharatPe’s gold loan division, nearly a year ago, in order to launch and scale up this vertical. He has further claimed that the vertical was launched by him and Nikhilesh six months back, and expanded to three cities — Delhi, Bengaluru and Hyderabad. “BharatPe has today peddled another lie that they've launched Gold Loan under Suhail. I had brought Nikhilesh (ex-colleague from Kotak, PCJ) 1 year back to [a] build Gold Loan business. The Gold Loan business was launched by me and Nikhilesh 6 months back and expanded to 3 cities - Delhi, Bangalore and Hyderabad. Suhail had no contribution [sic] and is selling lies as he hasn't been able to launch even things which I had planned in [the] last 3 months,” Grover said. “As part of BharatPe growth journey, we officially announced our foray into gold loan yesterday. The product was in beta mode over the course of the last few months and is now officially available for all merchant partners in Delhi NCR, Bangalore and Hyderabad. We do not intend to respond to baseless allegations,” BharatPe's spokesperson said. BharatPe announced its gold loan vertical for their merchants partners on Monday, marking their entering in the secured loans category. The company was earlier working in the unsecured loans category by offering collateral free loans. The company has partnered with Reserve Bank of India (RBI)-approved non banking financial companies (NBFC) to offer gold loans up to ₹20 lakhs. The company, in a statement, noted that it has already launched the gold loan offering in Delhi NCR, Bengaluru and Hyderabad. It will now be looking to scale the products to 20 cities by the end of 2022. The company plans to facilitate disbursals of ₹500 crore by the end of 2022, at an interest rate of 0.39% per month.The loan application process is fully digital and the loan is disbursed within 30 minutes of completion of the assessment process. SEE ALSO <a class="tout-title-link" href="https://www.businessinsider.in/home/facebook-wants-to-bring-back-young-adults-on-its-platform-but-they-say-theres-nothing-much-it-can-do-to-win-them/articleshow/90206539.cms">Facebook wants to bring back young adults on its platform but they say there’s nothing much it can do to win them</a> <a href="https://www.businessinsider.in/tech/mobile/news/apple-supplier-foxconn-halts-production-at-its-shenzhen-plants-after-sudden-covid-19-outbreak/articleshow/90215795.cms" data-type="tilCustomLink">Apple supplier Foxconn halts production at its Shenzhen plants after sudden COVID-19 outbreak</a> <a href="https://www.businessinsider.in/personal-finance/news/epfo-continues-to-give-attractive-interests-rate-compared-to-other-government-schemes/articleshow/90210522.cms" data-type="tilCustomLink">EPFO continues to give attractive interests rate compared to other government schemes</a>

Ashneer Grover claims Bharatpe's gold loan vertical was his project, calls out CEO for ‘selling lies’

<ul><li>Employee experience platform <keyword id="3656293" type="General" weightage="20" keywordseo="infeedo" source="Orion">inFeedo</keyword> has raised $12 million in a round led by Jungle Ventures, <keyword id="526777" type="General" weightage="20" keywordseo="tiger-global" source="Orion">Tiger Global</keyword>.</li><li>It counts Y Combinator, Freshworks’ CEO <keyword id="2167965" type="General" weightage="20" keywordseo="Girish-Mathrubootham" source="Orion">Girish Mathrubootham</keyword>, Lenskart’s <keyword id="824423" type="General" weightage="20" keywordseo="peyush-bansal" source="Orion">Peyush Bansal</keyword> and innov8’s Ritesh Malik as investors.</li><li>inFeedo currently serves 175 enterprise customers, including Samsung, TATA, Paytm and OYO.</li></ul>Employee experience platform inFeedo — which is used by companies like Samsung, TATA, Paytm and OYO — has raised $12 million in a round led by Jungle Ventures, with participation from Tiger Global and existing investors including Bling Capital. Zeta’s founder Bhavin Turakhia, Gainsight’s founder Sreedhar Peddineni, Freshworks’ Chief Human Resource Officer (CHRO) Suman Gopalan and serial entrepreneur Ankur Warikoo also participated in the round. With this, the company has raised $16 million to date, and it counts Y Combinator, Freshworks’ Chief Executive Officer (CEO) Girish Mathrubootham, Lenskart’s Peyush Bansal and innov8’s Ritesh Malik as investors. Founded in 2016 by Tanmaya Jain and Varun Puri, inFeedo is an all-in-one employee experience platform with people analytics that help predict attrition, burnout and disengagement in top talent. The company’s proprietary artificial intelligence (AI) bot Amber has conversations with the employees to find hidden gaps in their culture, managers and wellbeing in real time. The company plans to triple their product line up, quadruple revenue, double their team and accelerate growth in Southeast Asia, India and the US, in the next couple of years. The company is currently hiring for over 140 remote roles across all functions, especially marketing, product, engineering and sales in these regions to fulfill its targets. inFeedo currently serves 175 enterprise customers in more than 60 countries. Its clientele includes Xiaomi, Lenovo, Godrej, the Bharti Group, and Unacademy. The company claims that Amber has had 1.3 million conversations in the last one year alone. SEE ALSO <a class="tout-title-link" href="https://www.businessinsider.in/home/facebook-wants-to-bring-back-young-adults-on-its-platform-but-they-say-theres-nothing-much-it-can-do-to-win-them/articleshow/90206539.cms">Facebook wants to bring back young adults on its platform but they say there’s nothing much it can do to win them</a> <a href="https://www.businessinsider.in/tech/mobile/news/apple-supplier-foxconn-halts-production-at-its-shenzhen-plants-after-sudden-covid-19-outbreak/articleshow/90215795.cms" data-type="tilCustomLink">Apple supplier Foxconn halts production at its Shenzhen plants after sudden COVID-19 outbreak</a> <a href="https://www.businessinsider.in/personal-finance/news/epfo-continues-to-give-attractive-interests-rate-compared-to-other-government-schemes/articleshow/90210522.cms" data-type="tilCustomLink">EPFO continues to give attractive interests rate compared to other government schemes</a>

Peyush Bansal and Girish Mathrubootham-backed inFeedo raises $12 million from Tiger Global, others

<ul><li>RBI barred <keyword id="3236791" type="General" weightage="20" keywordseo="paytm-payments-bank" source="Orion">Paytm Payments Bank</keyword> from opening any new account from March 11 onwards.</li><li>One 97 Communications has emphasised that the RBI recent restrictions on <keyword id="6357120" type="General" weightage="20" keywordseo="paytm" source="Orion">Paytm</keyword> Payments Bank will have no material impact on Paytm.</li><li>Paytm Payments Bank is a joint venture between Paytm and its founder Vijay Shekhar Sharma.</li></ul>One 97 Communications — the parent company of digital payments giant Paytm — has once again emphasised that the Reserve Bank of India’s (RBI) recent restrictions on Paytm Payments Bank will have no material impact on Paytm or its ability to sign up new customers on its app. “Paytm believes that the measures imposed upon PPBL [Paytm Payments Bank Limited) will not materially impact Paytm’s overall business. This direction does not have an impact on the services that Paytm provides in partnership with other financial services institutions,” One 97 Communications said in a stock exchange filing on March 15. Paytm Payments Bank is a joint venture between Paytm and its founder Vijay Shekhar Sharma. It is important to note that Paytm Payments Bank is not included under the public offering of One 97 Communications, instead it is an associate entity. Even though not public, Paytm Payments Bank is the backbone behind several Paytm offerings including insurance, digital payments and lending. RBI <a href="https://www.businessinsider.in/business/news/rbi-stops-paytm-payments-bank-from-opening-new-accounts/articleshow/90156814.cms">barred</a> Paytm Payments Bank from opening any new account from March 11 onwards. The central bank has asked Paytm Payments Bank to <a href="https://economictimes.indiatimes.com/tech/startups/rbi-punished-paytm-payments-bank-for-sharing-data-with-china-firm-report/articleshow/90201281.cms">carry out</a> an independent technology audit, but only after consulting with them. The payments bank would have to select the name of potential auditors, who will then be reportedly finalised by the RBI itself. A Bloomberg<a href="https://www.bloomberg.com/news/articles/2022-03-14/india-said-to-punish-paytm-bank-for-data-leaks-to-chinese-firms"> report</a>, citing sources, said that the central bank imposed this restriction on Paytm Payments Bank as the company allowed data to flow to servers that were sharing information with China-based entities. Vijay Shekha Sharma-led One97 Communications have<a href="https://www.businessinsider.in/business/news/paytm-payments-bank-denies-report-claiming-it-leaked-data-to-chinese-firms/articleshow/90203210.cms"> denied these claims</a>, saying the report is “completely false” and “simple [sic] sensationalising”. “Paytm Payments Bank is proud to be a completely homegrown bank and is fully compliant with RBI’s directions on data localisation. All of the Bank’s data resides within the country. We are true believers of the Digital India initiative, and remain committed to driving financial inclusion in the country,” the company’s spokesperson added. SEE ALSO <a class="tout-title-link" href="https://www.businessinsider.in/home/facebook-wants-to-bring-back-young-adults-on-its-platform-but-they-say-theres-nothing-much-it-can-do-to-win-them/articleshow/90206539.cms">Facebook wants to bring back young adults on its platform but they say there’s nothing much it can do to win them</a> <a href="https://www.businessinsider.in/tech/mobile/news/apple-supplier-foxconn-halts-production-at-its-shenzhen-plants-after-sudden-covid-19-outbreak/articleshow/90215795.cms" data-type="tilCustomLink">Apple supplier Foxconn halts production at its Shenzhen plants after sudden COVID-19 outbreak</a> <a href="https://www.businessinsider.in/personal-finance/news/epfo-continues-to-give-attractive-interests-rate-compared-to-other-government-schemes/articleshow/90210522.cms" data-type="tilCustomLink">EPFO continues to give attractive interests rate compared to other government schemes</a>

Paytm says that restrictions on Payments Bank won’t hamper its business

<ul><li>The <keyword id="47209" type="General" weightage="20" keywordseo="finance-ministry" source="Orion">finance ministry</keyword> had proposed in its latest Budget Session that employee accounts with more than ₹2.5 lakh annual contribution will be taxable sooner.</li><li>Employees' Provident Fund Organisation (EPFO) has over six crore subscribers.</li><li>The move is aimed to tax HNIs who benefit from tax-free interest income on their large contributions to PF accounts.</li></ul>The government on August 31 announced that Employees Provident Fund (EPF) accounts with more than ₹2.5 lakh annual contribution will be taxed. It was proposed by the government in Budget 2021 that interest on Employees’ Provident Fund (EPF) and Voluntary Provident Fund (VPF) contributions above ₹2.5 lakh in a financial year will be taxable. <cmsannotation type="cmsannotation" annotationid="Why did the government decide to impose tax on excess EPF contributions?" comment="subhead" text="Why did the government decide to impose tax on excess EPF contributions?">Why did the government decide to impose tax on excess EPF contributions?</cmsannotation> The government found out that employees were contributing huge amounts to the PF funds as it ensured 8% returns and tax exemptions at all stages. EPF accounts are like a common man’s retirement fund as they earn average earnings. It is mandatory for employees earning up to ₹15,000 a month in firms with over 20 workers, with 12% of the basic pay and dearness allowance (DA) deducted as employees’ contribution and another 12% remitted by the employer. However, government as well as private sector employees are allowed to make voluntary contributions over and above the statutory deductions. So, to exclude high net worth individuals (HNIs) from the benefit of tax-free interest income on their large contributions, the government has set a threshold limit of ₹2.5 lakh for tax exemption. Those who have contributions below ₹2.5 lakh will not be charged. <cmsannotation type="cmsannotation" annotationid="How will the contribution be taxed?" comment="subhead" text="How will the contribution be taxed?">How will the contribution be taxed?</cmsannotation> The new rules say that for better calculation, two separate accounts shall be maintained from 2021-22 for taxable and non-taxable contributions made by a person. For individuals in the higher tax bracket of 30%, the interest income on contributions above ₹2.5 lakh would get taxed at the same marginal tax rate. For instance, if an individual contributes ₹3 lakh every year to the provident fund (including the voluntary PF contribution) then the interest on his contribution above ₹2.5 lakh, which is ₹ 50,000 will be taxed. This only applies to contributions made from 1 April 2021. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/vijaya-diagnostic-ipo-last-day-for-subscription-allotment-on-september-8/articleshow/85879245.cms">Vijaya Diagnostic IPO’s last day to subscribe, grey market indicates ₹15-₹20 premium</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/ami-organics-ipo-last-day-for-subscription-and-allotment-on-september-8/articleshow/85879032.cms">Last day to subscribe to Ami Organics IPO, issue oversubscribed by almost four times</a>

If you contribute more than ₹2.5 lakh yearly to provident fund, it will now be taxed — All you need to know

As investment instruments, <keyword id="76579" type="CITY" weightage="20" keywordseo="PPF">PPF</keyword> (Public Provident Fund) and <keyword id="45027" type="ORGANIZATION" weightage="20" keywordseo="EPF">EPF</keyword> (Employees' Provident Fund) have a lot of things uncommon between them. Basically speaking, the decision to invest in a PPF scheme rests with the investors while EPF is automatically deducted from the salary of the salaried class of people. Both these investment options enable the investors cave on taxes. Section 80 C of the Income Tax Act of 1961 makes both <keyword id="8113458" type="UNKNOWN" weightage="20" keywordseo="PPF-and-EPF">PPF and EPF</keyword> investments eligible for a range of income tax benefits. Overview of EPF and PPF In India, two types of provident funds are popularly known namely Employees’ Provident Fund or EPF and Public Provident Fund or PPF. Under the existing regulations, EPF is automatically deducted from the salary of the salaried class individuals by their employees and paid into their respective EPF accounts maintained with the EPF department under the auspices of the Government of India. The choice to invest in a PPF scheme solely rests with the investor. This means that if you are a salaried individual, you do not have a choice not to subscribe to the EPF scheme. Hence, the deductions will be invariably made from your salary to be invested into your EPF account. But, whether you wish to invest in a PPF scheme is purely optional. EPFO or Employees Provident Fund Organization is a retirement fund body that governs the EPF scheme. PPF scheme is offered by the Government of India through banks and post offices. How do these schemes compare Interest rates The government decides the interest rate of PPF year on year depending on several factors related to the country’s economy. Over the past several years, the interest rate of EPF contributions had never come down below 8.5 percent. The government decides the interest rates of PPF during every quarter. For the quarter ending in June 2018, the interest rate for PPF investments was fixed at 7.6% for example. Since the PPF investments come under the Exempt, Exempt, Exempt category, the returns are completely exempt from taxes. The principal amount, the maturity amount and the benefits earned on the investment are all qualified for tax exemption. How the EPF and PPF schemes operate If an individual works with a company that has more than 20 people on its rolls, EPF deduction is compulsory. The salaried employee contributes about 12 percent from their monthly salary towards EPF. The employer has to contribute an equal share of 12 percent which will be deposited in the employee’s account along with the employee’s contribution. Any citizen who is a resident of India can open a PPF account. To open a PPF account it is not necessary that the individual must be a salaried person. Members of Hindu Undivided Families (HUF) cannot open a PPF account. The tenure of investment in case of a PPF account is 15 years. Once this period expires, the investment can be extended for another 5 years. From the third financial year of opening the account, the investor can take a loan from the PPF account. From the seventh financial year, the investor can make partial withdrawals from this account.

What is the difference between PPF and EPF

In a market defining move last month, Chinese Central Bank allowed the use of financial products that can potentially safeguard investors’ interest in the event of default of an underlying asset. In other words, the <keyword id="126380" type="UNKNOWN" weightage="100" keywordseo="credit-default-swaps">Credit Default Swaps</keyword> (CDS) can now be legally traded on the Chinese bourses. This move comes amidst increased stress around the <keyword id="1413899" type="UNKNOWN" weightage="100" keywordseo="Chinese-banking-system">Chinese banking system</keyword>, owing to exponential rise of public and private sector debt. As this debt mounts, and defaults rise to an unprecedented U.S. $4bn, this move signals the increased willingness of the Chinese government to let market forces deal with underlying defaults. It is noteworthy that in the wake of the 2008 credit crisis, China had introduced a lesser cousin of the CDS called Credit Risk Mitigation Agreement (CRMA), but the market never took off, largely because the state kept bailing out insolvent companies instead of letting them default, in the interests of financial and social stability. 
 
India’s has had its share of frustrations with the growth of the corporate bond market – despite availability of instruments for investor risk hedging the debt market has failed to pick up. So really then, does the availability of hedging options like CDS drive an upswing in the investor sentiment by lowering riskiness of debt? If so, why hasn’t the debt market responded well in India, and why, despite having a robust corporate debt market, the CRMA market did not pick up in China? What is different this time around that China is expecting to achieve this time with CDS what it couldn’t with CRMA? It will be interesting to observe why such seemingly brilliant market moves have failed to gather mass in both India and China in the past. And what can India learn from this. 
 
The <keyword id="1114678" type="UNKNOWN" weightage="100" keywordseo="Indian-debt-market">Indian debt market</keyword> 
To predict the emergence of CDS market in China and possibly draw learnings for India, it is interesting to follow the journey of similar products in comparable emerging markets. In India, the second largest growth market in the world currently, CDS was launched in mid-2011 keeping in view a then Rs 10 lakh crore corporate bond market signaling a huge potential for the development of a market for CDS. India’s rapid population growth needed (and still needs) significant investments in infrastructure. These needs were, and still continue to be, sufficed by either FIIs or bank financing, with money market instruments such as commercial papers and CDS providing short term funds only. The system desperately needed an efficient and vibrant corporate bond market for facilitating the financing needs of infrastructure projects. A provision of hedging the credit risk of the investors in the infrastructure sector could give a much-needed boost to the FIIs as investors. While RBI introduced two new instruments – Repo and CDS – it was expected that the corporate bond market would start booming, auguring well for the long term funding especially for infrastructure development in the country. But five years hence, the CDS market has turned out to be a stillborn. The development of the debt market is constrained by highly conservative and slow moving financial markets reform. Despite repeated policy changes introduced by RBI to push their usage, the corporate bond market has grown just 6.43% points in the last 5 years; the corresponding CDS growth is at best puny. 
 
Learning from other <keyword id="116702" type="UNKNOWN" weightage="100" keywordseo="emerging-economies">emerging economies</keyword> Among other emerging nations, Brazil and Mexico have seen a robust growth in their bond markets after they focused efforts on improving their fiscal environment and macroeconomic factors. What is common across these economies is that the governments have put in place structured programs to rein inflation, open up the economies, provide stable fiscal program and set up a regulatory and governance framework. Closer home in Asia, South Korea and Malaysia have the strongest debt markets in Asia with Korea’s corporate bond market penetration of ~77% as compared to India’s ~16%. This, when Korea’s GDP is very similar to India’s. In stark contrast, Philippines have a much volatile <keyword id="34412" type="ORGANIZATION" weightage="100" keywordseo="economy">economy</keyword> and the corporate bond market is still underdeveloped and heavily dependent on government support. 
 
So is CDS likely to succeed in China? 
In the past, why China’s earlier experiment with CRMA failed was that every time a corporate bond tended to default, the Chinese government interfered to restructure debt and orchestrate a bail out, making investors very nervous in the process, and reducing the government’s ability to continue such act over a sustainably long period of time. 
 
The corporate bond market in China has seen a surge in the last 2 years, largely due to easing of restrictions on bond issuance, corporate debt becoming cheaper, and government’s intervention in corporate debt restructuring. With this growth has come the risk of defaults, as not all issuers are now backed by a state guarantee. In the last two years, default rates have risen in line with overall growth in corporate debt. Many FIIs remain apprehensive of investing in the Chinese market, and the higher default rates have caused the bond market to become more expensive. At this point, the introduction of CDS can be a market defining move if the government lets market forces play out rather than repeating past mistakes of interference. 
 
The name is Bond! 
India’s need for investments in core sectors like infrastructure and education over the next two decades will far surpass the ability of equity markets to finance these needs. Eventually, corporate debt will need to play a larger role than it does today. Just having the right instruments like CDS will not provide the much needed impetus for growth of debt market in India; a look at rival China and other economies like Malaysia, Brazil, Mexico and Philippines teaches us many important lessons in what our next steps should be. 
 
A slew of measures have been taken in the last 2 years to allow the Indian debt market to open up further. The primary shift in investor sentiment has come from the central government being led by a party that could garner majority votes after nearly two decades of hung parliament and indecisive leadership. This government has been able to shift focus to growth, and drive some key reforms. Alongside, many fiscal and economic policy decisions by the RBI are pushing economic reform one step further. Large investors like EPFO being allowed to invest in corporate debt, issuers being permitted to consolidate and reissue corporate debt, and FPI investments being allowed in corporate debt are all moves in the right direction. The government has also done a good job at reining in inflation and putting growth back in focus. As a next step, the country needs to learn from global best practices and invest in providing better settlement and reporting platforms, focus on investor education to invite broad based retail participation, and continue down the path of fiscal reform and providing impetus to securitization market. In the absence of a strong debt market, it is unlikely that the Indian banking sector could come true to providing the much needed boost for infrastructure development in this growth hungry economy. 
 
(About the Author: This article has been contributed by Poornima Vasdev, Director, Program Management, Sapient Global Markets.)

You Searched For "EPFO interest rate" and got 8 results

India records 2,568 COVID-19 cases and 97 deaths in the last 24 hours

IANS

Sensex, Nifty off to a volatile start; Tata Steel, Infosys, Tech Mahindra, HCL Tech, TCS and Wipro big losers among Sensex 30 stocks

PTI

Ashneer Grover claims Bharatpe's gold loan vertical was his project, calls out CEO for ‘selling lies’

Kritti Bhalla

Peyush Bansal and Girish Mathrubootham-backed inFeedo raises $12 million from Tiger Global, others

Kritti Bhalla

Paytm says that restrictions on Payments Bank won’t hamper its business

Kritti Bhalla

If you contribute more than ₹2.5 lakh yearly to provident fund, it will now be taxed — All you need to know

Bhakti Makwana

What is the difference between PPF and EPF

BI India Bureau

What Indian debt market can learn from other emerging economies?

Guest Author