Bank merger, Punjab National Bank, PSU, Public sector, Union Bank
The central government’s plan to combine 10 state-run banks into four came into effect from Wednesday (April 1) which was announced in August 2019. Photo: PTI File.

Business analysis: Govt asks PSBs to start hiring; IT firms seek legal help on moonlighting

The Federal takes a look at news that matters in the world of economy and business, on Wednesday, September 28.

Adani’s capex plan

Over the next 10 years, the Adani Group plans to invest $100 billion in metals, petrochemicals, energy transition, aerospace, and defence.

What it means: Gautam Adani, the third-richest person in the world with a net worth of $133 billion, wants to invest in crucial economic sectors. The Adani Group seeks to align its goals with India’s energy and physical infrastructure needs. Even though India needs an infrastructure moghul to spearhead efforts like these to help the nation meet its climate goals, the rising debt level could have unfavourable consequences. Six Adani Group publicly traded entities have a gross debt of ₹2.3 lakh crore at the end of FY22. Adani doubled his wealth last year by earning ₹1,1612 crore daily.

Business analysis Sept 28: All eyes on IT Policy draft; festival sales likely to zoom

Post-pandemic shopping with savings

Indians are using their savings to indulge in post-pandemic shopping, according to RBI data. Gross domestic product savings decreased from 15.9% of GDP in FY21 to 10.8% in FY22. Savings rates decreased to their lowest levels in five years.

What it means: The middle class in India has one of the highest savings rates in the world, and Indians are typically not big spenders. Although salaries and employment haven’t kept up with consumption, consumers who draw from their savings may eventually suffer due to high inflation. If the shopping rush continues, this might develop into a worrying situation.

Also read: Are you ready for the new credit and debit card rules from October 1?

Bumper e-commerce sales

E-commerce behemoths report $3.5 billion in holiday sales in the first four days.

What it means: Sales have increased by 28% compared to the same period last year, according to Redseer Consulting. Sales of mobile phones increased by 10 times. But 50% of sales came from customers choosing EMIs or using buy-now-pay-later plans to sp which raises concerns because it suggests that these customers lack the finances necessary to splurge on expensive items.

Recruitment in PSBs

The government has requested that PSBs begin recruiting additional people.

What that means: The number of PSB personnel has been steadily declining. The government wants the banks to begin bringing on new hires each month. PSBs have roughly 7.7 lakh employees, down from 8.86 lakh in 2012–13. Redundancies have made numerous jobs obsolete due to the government’s intention to combine large banks with smaller ones, which has caused banks to halt hiring. Even though the government wants the banks to support the national employment plan, the trend may persist if more public sector banks are merged.

Also read: India unlikely to meet 175 GW renewable energy target by year-end

Moonlighting woes

IT organisations have sought legal assistance to stop rising side gigs by employees.

What it means: Employers want to rewrite employment contracts to make it difficult for workers to engage in side jobs. But that is insufficient because workers are struggling to maintain their standard of living due to a weakening economy and an increase in job losses. While not enjoyable, working around the clock is now necessary for the employees.

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