Growing Importance of ESG, waning COVID-19 threat and new boosters for MSMEs: Three things Teji Mandi investors should know on June 29, 2021

ESG Compliance

International rating agency Crisil has recently prepared a list of the most ESG compliant sectors and companies in India. It has found out that the information technology and financial services sectors are the most ESG compliant industries in India.

Whereas companies in the oil and gas, chemicals, metals and mining, and cement sectors score low on ESG count due to their environmental and health-related concerns.

The report hailed Infosys and Kotak Mahindra Bank as the most ESG compliant organisations, scoring 79 and 75 respectively out of 100.

The report in particular stressed the need for improving the usage of renewable energy and gender diversity at the board level in order to be more ESG compliant.

Environmental, Social, and Governance (ESG) compliance has become a crucial factor over the last few years. It has started to form a crucial part of the decision-making process of the governments, policymakers, investors, and corporations.

COVID-19 No More a Concern?

Hailed as the valuation guru professor Aswath Damodaran sees COVID-19 as a past phenomenon. And, rising inflation has replaced it as a new issue that the market is going to fret about in times ahead in his opinion.

The growth is returning in markets across the globe in different proportions, depending on the COVID-19 impact. While growth has returned fast in the US market, it is going to be slow in India.

With the faster return of growth, inflation is also raising its head. It is the biggest unknown factor. If inflation goes out of hand, central banks across the globe will have to devote their efforts to contain it. It in turn will squeeze the liquidity, impacting the growth.

In a way, rising inflation is fast replacing COVID-19 as a major point of concern. And, in Prof. Damodaran's words, it will act as a main catalyst for the market in the coming times.

Focus on MSMEs

Finance Minister Nirmala Sitharaman’s booster dose of Rs 6.29 lakh crore is yet another step in support of the MSME sector. Emergency Credit Line Guarantee Scheme (ECLGS) has been the main weapon for the government in its outreach to the MSMEs. And, in her latest announcement, the FM has further expanded the scope of the scheme by Rs 1.50 lakh crore.

The FM has also announced an additional credit guarantee of Rs 50,000 crore for the health sector. And, a special allocation of Rs 60,000 crore is provided to help travel agencies and tourist guides.

MSMEs have been at the heart of all government efforts to revive the economy. And recent steps are also in the same direction. The government has responded to the ground situation and kept expanding the helpline towards sectors that need help.

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