Reliance Industries Ltd, led by Mukesh Ambani, saw a significant reduction in its workforce during the fiscal year 2024 (FY24), with employee numbers dropping by 11%. The company’s annual report reveals that the biggest decline occurred in Reliance Retail, where the headcount fell by 38,029. While overall voluntary separations (resignations) were lower in FY24 compared to FY23, Reliance hired 171,116 new employees across businesses during the fiscal year, representing a 35% decrease from the previous year. This indicates that the company is actively managing its workforce in response to various economic factors.
Meanwhile, the Reserve Bank of India (RBI) is expressing concerns about a growing mismatch between credit and deposit growth in the banking sector. This imbalance arises from the sharp increase in credit demand coupled with tepid growth in deposits. To address this, banks are increasingly relying on short-term non-retail deposits and other instruments, which could potentially expose the banking system to structural liquidity issues. RBI Governor Shaktikanta Das has urged banks to focus on mobilizing household financial savings through innovative products, aiming to mitigate this credit-deposit mismatch.
Recession fears in the US have been escalating, particularly after jobs data revealed unemployment rates reaching a near three-year high of 4.3%. Goldman Sachs has increased its probability estimate of a US recession next year to 35%, citing these employment figures. These concerns about a potential US recession have spooked global markets, raising questions about the Federal Reserve’s effectiveness in managing interest rates. Additionally, the Bank of Japan’s recent rare interest rate move has contributed to market volatility.
Bangladesh experienced a period of political turmoil this week, with Prime Minister Sheikh Hasina being forced to resign and flee the country following months of protests against government job quotas. The country had previously achieved a remarkable economic turnaround through export-driven growth, particularly in ready-made garments. This led to Bangladesh overtaking India and Pakistan in per-capita income. However, the limitations of this export-led growth model have become apparent in recent years, with its share in gross domestic product (GDP) declining.
Agriculture, while still the largest employer in rural areas, is facing challenges in attracting young people. Research conducted by the Development Intelligence Unit (DIU), Global Development Incubator (GDI), and Transforming Rural India (TRI) reveals that over 60% of young people engaged in farming desire salaried jobs instead. The primary reasons cited include low productivity, insufficient profits, limited access to markets, and debt traps faced by small farmers.
The Economic Survey 2024 proposed excluding food inflation from the overall inflation target. However, a recent study indicates that this may not be a practical approach. Persistent food price shocks have a significant impact on non-food prices, and household inflation expectations are closely tied to food costs. Therefore, high food prices cannot be easily dismissed. The solution lies in a flexible, situation-driven approach to managing inflation, similar to the one currently employed by the RBI.
In response to criticism over the recent medical entrance exam fiasco, the union government has announced plans to increase undergraduate medical seats by 15,000. This will bring the total number of seats to 115,000. The National Medical Commission has approved the establishment of 28 private medical colleges to accommodate this increase in student capacity.
Indian banks have struggled to recover bad loans effectively over the past five years. Data shared by the government in the Rajya Sabha indicates that banks have only managed to recover an average of 19% of bad loans between FY20 and FY24. During this period, a total of ₹9.9 trillion worth of loans were written off. While the recovery rate has shown improvement over the years, rising from 12.8% in FY20 to 26.4% in FY24, the overall recovery remains relatively low.
