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If his exit from Tata Sons was a mystery, Cyrus Mistry’s untimely death in a road accident in Maharashtra on September 4 is a tragedy of unimaginable magnitude. Fifty-four is no age to go in today’s world. While the loss for his family is irredeemable, he was also a rising star snatched away from the firmament of the emerging new India.

The Shapoorji-Pallonjis were no ordinary business family. Apart from being the silent and invisible force behind the House of Tatas, they were a major player in India’s construction sector for decades — cutting across housing, industry, and infrastructure. Barring Larsen & Toubro, following its Indianisation, the Shapoorjis were one of the most trusted names among the domestic private sector construction firms. They were in it for the long haul unlike many short-term wonders who came and disappeared after bleeding banks and creditors dry.

The group had weathered many storms in the economy. It had the resilience and commitment to take the smooth and the rough patches in its stride. This is a sensibility that Cyrus Mistry inherited from the older generations of the Pallonji family, apart from impeccable genteel upbringing, and the best of education. It put him in the league of enlightened business leaders with a global outlook, but strong local moorings — precisely what we need for the next leg of the ‘India Growth Story’.

This is not the time and place to dwell upon the controversy surrounding Mistry’s short stint at Tata Sons. It is best put behind as an internal squabble which will now go to rest with him. But that does not diminish the promise he displayed and attributes he embodied that is so essential for shaping the future of India’s economic climate. This included above all grace, dignity, and integrity of character that are so essential to earn the respect of the global financial and industrial community. Many of these qualities were on frontal display during his tenure in Tatas in the hard calls he was willing to take on many of the group’s investment decisions and collaborations that did not pass the smell test. Some of these reviews may have contributed to his nemesis at Tata Sons. Though affronted he never gave the impression of regretting his position on the matter.

Mistry broke out of the comfort zone of a family-owned business to a professionally managed organisation like the Tatas. It would have also involved a willingness and ability to learn about diverse businesses ranging from aviation and automobiles to telecom and tea. Making the transition must have been daunting. One does not know the circumstances of his selection after mounting a global search. In hindsight, Tata Sons may not have been all that professional after all as evident from the choice of N Chandrasekaran, a confidante of Ratan Tata, as his successor.

Another trait of Mistry that stands out is the premium he placed on merit. This was evident from the talent pool he gathered at Tata Sons with some of the finest minds in different disciplines from around the world. Almost all of these hires were global thought leaders of Indian origin, rather than foreign experts. This was in keeping with the ethos that had been at the core of both the Tatas and Pallonjis of combining the best of all the worlds. However, not everyone is able to strike the right balance.

That does not mean Mistry was the epitome of success. To be fair, he was at best a 'work in progress'. At one level he may remind us of a Shakespearean ‘tragic hero’ though his end came by the sleight of the divine hand rather than his own undoing. Next generation of business family scions should learn from his example to carve their own path for building on the legacy they have inherited, and to create enduring world-class institutions.

India's dominant services industry grew faster than expected in August thanks to a solid expansion in demand and a continued easing in cost pressures, encouraging firms to hire at the quickest pace in more than 14 years, a private survey showed.

Driven by strong growth in services and manufacturing activity, Asia's third-largest economy expanded at its fastest annual pace in a year during the April-to-June quarter.

However, that momentum is unlikely to be sustained over the coming quarters as higher interest rates, elevated price pressures, and growing concerns about a global recession pose significant risks to the economy.

Still, the S&P Global India Services Purchasing Managers' Index rose to 57.2 in August from 55.5 in July, surpassing the 55.0 estimate in a Reuters poll. It remained above the 50-mark separating growth from contraction for a 13th straight month.

"The pick-up in growth stemmed from a rebound in new business gains as firms continued to

benefit from the lifting of COVID-19 restrictions and ongoing marketing efforts," noted Pollyanna De Lima, economics associate director at S&P Global.

"Finance and insurance was the brightest area of the service economy in August, leading with regards to growth of sales and output."

While that encouraged firms to raise headcount at the fastest pace since June 2008, signs of demand remaining resilient boosted business confidence to its highest in over four years.

But overseas orders contracted for a 30th consecutive month on persistent weakness in global demand.

Input prices, albeit elevated, increased at their slowest pace in nearly a year in August. Persistent strength in demand allowed firms to transfer some of their high-cost pressures onto their customers.

Although overall inflation is widely expected to slow over the coming months, it is unlikely to decline to within the Reserve Bank of India's medium-term target range of 2%-6% anytime soon.

That means the RBI, which has already raised its key repo rate by 140 basis points since May, is expected to continue with its rate hikes.

Faster expansion in services activity and strong manufacturing growth boosted the composite index to 58.2 in August from 56.6 in July.

NTPC has produced 7.36 MMT of coal production as per data available on August 31, registering a robust growth of 62 per cent compared to 4.55 MMT achieved during the same period last year.

"With meticulous planning, resource mobilization, and regular monitoring, NTPC has achieved substantial growth even during the monsoon period so far, and is hopeful of sustaining the growth that will help in ensuring uninterrupted, reliable and affordable power generation," an official release said.

It said NTPC has dispatched 7.52 MMT of coal from its captive mines as compared to 5.47 MMT of coal dispatched during the same period last year, registering a growth of 37 per cent.

The release said NTPC has taken various steps to augment the coal production from its coal mines.

The engagement of high-capacity dumpers as well as an increase in the existing fleet size of excavators has allowed the operational mines to increase their production, it said.

India leaped past the UK in the final three months of 2021 to become the fifth-biggest economy. The calculation is based in US dollars, and India extended its lead in the first quarter, according to GDP figures from the International Monetary Fund. Twitterati reacted to this feat and tweeted out their feelings of awe.

Also Read : India pips UK to become fifth largest economy

Billionaire businessman, and the chairman of Mahindra Group, Anand Mahindra reacted to the news tweeting out his joy and stating how India has given a reply to those who felt that the country would descend into chaos.

The business tycoon tweeted "The law of Karma works. News that would have filled the hearts of every Indian that fought hard & sacrificed much for freedom. And a silent but strong reply to those who thought India would descend into chaos. A time for silent reflection, gratitude."

The Minister of Commerce & Industry, Piyush Goyal  also reacted to the news and shared his excitement in the form of a tweet "India is the world's fifth biggest economy now!"

Odisha has registered OGST collection of Rs 1,019.81 crore during August 2022 against Rs 956.47 crore in the same period previous year, with a growth of 6.62 per cent, an official said.

The progressive collection of OGST till August 2022 is Rs 6,267.93 crore against Rs 4,836.75 crore in the same period last year, with a growth rate of 29.59 per cent.

The gross collection of GST during August, 2022 is Rs 3,883.90 crore as against Rs 3,316.55 crore during August, 2021 with a growth of 17.11 per cent. The progressive collection of Gross GST till August, 2022 is Rs 20,366.77 crore against Rs 16,977.92 crore with a growth rate of 19.96 per cent, he said.

Similarly, the total collection of VAT (petrol and liquor) is Rs 933.62 crore during August, 2022 as against Rs 884.22 crore during August 2021 with growth rate of 5.59 per cent.

Of the total VAT, the collection from petroleum products is Rs 750.11 crore during August, 2022 against Rs 727.73 crore collected during August 2021 with growth of 3.08 per cent.

Similarly, the collection from liquor is Rs 183.51 crore during August 2022 against Rs 156.49 crore collected during August 2021 with a growth rate of 17.27 per cent.

The state has also registered a growth of 18.37 per cent in profession tax with a collection of Rs 21.72 crore. during August 2022 against collection of Rs 18.35 crore during August 2021.

During the current fiscal (up to August), 20,269 new tax payers have been brought under the GST fold, the official said, adding that the total e-waybill generated during August 2022 was 15.81 lakh against 14.35 lakh during August 2021 witnessing a growth of 10.17 per cent.

The framework for India's proposed sovereign green bond is almost ready and the instrument will be issued in the second half of the current financial year, a senior finance ministry official said.

"We have spoken to the World Bank. They are providing us with some guidance. We are getting the framework vetted by a second party that is completely independent," the official told Moneycontrol on condition of anonymity.

"It should be part of the H2 borrowing calendar," the official added.

The Centre will announce its borrowing schedule for the second half of FY23 at the end of September.

Announced by Finance Minister Nirmala Sitharaman in her FY23 budget speech in February, the green bonds will be part of this year's record gross borrowing budget estimate of Rs 14.95 lakh crore.

No hike in market borrowing

With the Reserve Bank of India (RBI) switching certain government securities just a couple of days before the presentation of the budget and the Centre pegging its first-half borrowing at Rs 8.45 lakh crore, the second-half borrowing amount works out to be Rs 5.86 lakh crore.

The finance ministry official quoted above said there was no reason why the Centre would increase its stated borrowing programme in October 2022-March 2023.

"Unless there are new expenditures which come up between now and the end of FY23, we will meet the fiscal deficit target," the official added.

The central government has set itself a fiscal deficit target of Rs 16.61 lakh crore, or 6.4 percent of GDP, for FY23. Data released on August 31 showed the government's finances to be in good shape in April-July, with the fiscal deficit at only a fifth of the full-year target at the end of the first third of the year. Comfort on the receipts front has also allowed the Centre to frontload the transfer of funds to states.

Green bond rates

The official was insistent the government wanted a "very fine rate" on the green bonds when they are finally issued.

"A discount of 2 basis points, 5 basis points, or 10 basis points is not enough. We are already borrowing from the market. And putting an entirely new framework for green bonds into place takes effort. So it should be worth the effort. We would like to see a very, very attractive discount (on prevailing government bond yields)."

Further, the sale of green bonds in subsequent years would depend on the interest rate demanded at the maiden issue.

"The rates should give us some value for the effort we put in. The discount should incentivise me to issue more of these bonds," the official argued.

When asked if the framework for the green bonds provided any incentives to investors so that they would ask for lower interest rates, the official said there was not going to be any such feature as the demand for these bonds had come from the market.

"The government is borrowing and is committed to provide resources to these green projects in any case," the person said, adding that the list of these projects is ready.

“We just have to figure out which of them would lead to the quickest absorption of money because we are not inclined to keep the funds with us."

A final call is also to be made on whether the government will disclose the full list of projects which will be financed through the proceeds of these green bond issuances.

"I think that should be necessary. If we tell the investors where the money is going, they will be more convinced," the source added.

The rise in one-year median marginal cost of fund-based lending rate (MCLR) of commercial banks moderated to 10 basis points (bps) in August from a hike of 15 bps in July. It has risen 40 bps since June.

This comes on the back of the Reserve Bank of India (RBI) raising the repo rate by 140 bps to 5.4 per cent in the current tightening cycle.

Anil Gupta, co-group head, financial sector ratings at ICRA, said banks will be calibrated in revising the MCLR, as they have to be competitive vis a vis other sources of borrowings, i.e. bonds and external commercial borrowings. Also, they have leeway in passing on cost of funds to borrowers.

Bankers, too, indicated that the MCLR would continue to rise but not to the extent of the increase in the policy rate. Besides, much of the MCLR-linked lending is to corporate houses, which have access to other sources of funding, the bankers pointed out, explaining the reason for the moderation in the MCLR hike in August.

Thus far in financial year 2022-23 (FY23), the one-year median MCLR for commercial banks has risen by 40 bps from 7.25 per cent in April to 7.65 per cent in August, according to data from the RBI.

The current MCLR rates are still lower than the rates that prevailed in the previous monetary tightening cycle of 2018, when they had moved from 8.3 per cent in February 2018 to 8.8 per cent in January 2019.

This was done in anticipation of rate hikes by the RBI, which had increased the policy repo rate by 25 bps to 6.25 per cent in June 2018, then again by 25 bps to 6.5 per cent in August 2018.

The current increase in the MCLR is a reflection of banks passing on the rise in cost of funds to borrowers, especially after the RBI raised the repo rate by 40 bps in May in an off-cycle policy review.

Different pace

Among the banking groups, foreign banks raised the one-year MCLR by 90 bps in the five-month period from 6.10 per cent in April to 7 per cent in August.

The pace was moderate for public sector banks, with median one-year MCLR rising by 40 bps to 7.65 per cent in August, from 7.25 per cent in April. For private sector banks, the median rise was just 20 bps in the period at 7.53 per cent in August.

While lending rates rose by 25 bps in the April-July period, the domestic term deposit rates rose only 19 bps from 5.03 per cent in April to 5.22 per cent in July. Since deposit rates rise with a lag, banks are still in a position to absorb some increase in the cost of funds.

In the 2018 cycle, the weighted average domestic term deposit rates grew from 6.54 per cent in January 2018 to 6.91 per cent in January 2019.

Prakash Agarwal, director and head – financial institutions, India Ratings, said term deposit rates will continue to rise, but banks will be circumspect in raising them. Those with weaker deposit franchise and lower share of Current Account and Savings Account (CASA) may have to offer higher rates to attract funds.

In the current cycle, foreign banks have marched ahead of their public and private sector rivals in terms of raising interest rates. Their weighted average domestic term deposit rates rose by 67 bps from 3.42 per cent in April to 4.09 per cent in July. State-owned banks hiked their term deposit rates by 16 bps to 5.27 per cent, and private lenders by 17 bps to 5.3 per cent, the RBI data showed.

State-owned Indian Bank has revised the marginal cost of funds-based lending rates (MCLR) by 0.10 per cent across tenors from Saturday, which will make most of the consumer loans costlier.

It has also revised the lending rates benchmarked on treasury bills.

The Asset Liability Management Committee (ALCO) of the bank has reviewed the Benchmark Lending Rates and decided on an upward revision in MCLR and TBLR across various tenors, the lender said in a regulatory filing on Thursday.

The benchmark one-year MCLR will be 7.75 per cent from September 3 against the existing rate of 7.65 per cent.

The one-year rate is used to fix most consumer loans such as auto, personal and home loans.

The overnight to six months tenor MCLRs are raised by 0.10 per cent each in the range of 6.95 to 7.60 per cent.

Besides, the lender also revised the treasury bills benchmark lending rate (TBLR) in the range of 5.55 per cent to 6.20 per cent for various tenors.