Page 16 - Banking Finance September 2020

ROUNDUP

collect tax on remittances was intro- cial drawing rights with the Interna- and technology sector, said venture
duced in the Finance Act of 2020 sub- tional Monetary Fund (IMF) remained capitalists, who have been galvanised
ject to riders and notified on 27 March unchanged at $1.481 billion. The into action by the realisation that the
to take effect from 1 October. country's reserve position with the IMF calendar year is ending.
Many financial institutions have com- rose by $22 million to $4.657 billion In contrast, in the first half of 2019 -
municated the applicability of tax-col- during the reporting week, the data one of the busiest years for early stage
lected-at source on remittances from showed. VC funds and startup investments -
October to customers. number of early stage deals was 476,
VC funding flows back in
The Union finance ministry has been compared to 240 in 2020, Tracxn data
extending the scope of both tax-de- Q2, bets big on digital showed.
ducted at source and tax-collected at Early stage venture investments have
source, and encouraging electronic picked up significantly since July, after Firms with up to 300
payments in order to have a better a relatively slow period of deal-making workers can hire and fire
idea of transactions in the Indian in the previous quarter, multiple inves- without Govt nod: Bill
economy and to be able to match the tors told.
spending pattern of assessees with The pandemic is throwing up opportu- The government has proposed to intro-
their reported taxable income. nities for new digital businesses, duce more conditions restricting the
prompting more entrepreneurs to en- rights of workers to strike, alongside an
Forex reserves surge $3.8 ter the fray. Deal flow and the num- increase in the threshold relating to
layoffs and retrenchment in industrial
bn to all-time high of ber of startup ideas a venture firm establishments with 300 workers, from
evaluates
$541.4 bn 100 workers or more at present - steps
registered a 50 per cent-plus uptick that are likely to provide more flexibil-
The country's foreign exchange re- from the previous quarter, according to ity to employers for hiring and firing
serves surged by $3.883 billion to at least six funds ET spoke to, with workers without government permis-
touch a life-time high of $541.431 bil- some also attesting to an improvement sion.
lion in the week ended August 28, the in the quality of founders.
Reserve Bank of India (RBI) data These changes have been proposed in
"There has been a gradual realisation The Industrial Relations Code Bill,
showed.
in July-August that this post Covid-19 2020, introduced in Lok Sabha. Labour
In the previous week ended August 21,
world is going to be the new normal and Employment Minister Santosh
the reserves had risen by $2.296 billion
for some time," said Karan Mohla, ex- Kumar Gangwar also introduced two
to $537.548 billion. In the reporting
ecutive director at Chiratae Ventures other labour code Bills: The Code on
week, the forex kitty rose mainly on
India Advisors, which is evaluating Social Security, 2020, and The Occupa-
the back of a jump in foreign currency
more than 250 deals every month - a tional Safety, Health and Working Con-
assets (FCAs), a major component of
level comparable to its deal flow in ditions Code, 2020.
the overall reserves.
January. The Industrial Relations Code has
FCAs increased by $3.925 billion to
Other funds such as Inventus Capital raised the threshold for requirement of
$498.094 billion, the central bank data
Partners, Lightspeed Venture Part- a standing order - rules of conduct for
showed.
ners, Matrix Partners, WaterBridge workmen employed in industrial estab-
Expressed in dollar terms, the foreign Ventures and Orios Venture Partners lishments - to over 300 workers.
currency assets include the effect of said deal activity had picked up relative
appreciation or depreciation of non-US to April-June. Trade welcomes India-
units like the euro, pound and yen held The massive fund-raising of Reliance Jio
in the foreign exchange reserves. Platforms has also piqued the interest Maldives cargo ferry ser-
The gold reserves were down by $64 of many new investors, said venture vice from Sept 20
million in the reporting week to $37.2 capitalists. These new investors are The Federation of Indian Chambers of
billion, as per the RBI data. The spe- eager to grab a share of India's digital Commerce and Industry has launched

16 | 2020 | SEPTEMBER | BANKING FINANCE