India’s economic landscape continues to evolve, with a series of noteworthy developments this week. The government has unveiled a new Unified Pension Scheme (UPS), effective April 1, 2025, aimed at providing a guaranteed pension to government employees. This scheme, a hybrid of the Old Pension Scheme (OPS) and the National Pension Scheme (NPS), promises a monthly pension of 50% of the last drawn salary before retirement. The UPS addresses shortcomings of the NPS, such as the lack of a guaranteed pension and its failure to account for inflation.
While this new pension scheme is a positive development, concerns remain about the potential economic slowdown. A recent poll suggests India’s economic growth may have slowed in the April-June quarter, with a median estimate of 25 economists pointing to a growth rate of 5.7%. This projected slowdown is attributed to factors such as muted government capital expenditure and an uneven monsoon.
Amidst these economic concerns, Adani Group has been actively restructuring its debt and diversifying its funding sources, following the damning report by US short-seller Hindenburg last year. The conglomerate has successfully managed to reduce its debt growth to 6% in 2023-24 from much higher levels in previous years. Adani Group has also strategically diversified its debt sources, reducing its reliance on domestic public and private banks.
Looking at the global economic picture, the likelihood of a US recession might lead the Federal Reserve to cut interest rates in its upcoming September meeting. The current high rates are perceived to be detrimental to economic growth. This decision, alongside the interest rate announcements of central banks in the EU, Canada, Indonesia, and Japan, will have ripple effects on the global economy.
In a major development for the media and entertainment sector, the merger deal between Disney Star and Reliance Industries-controlled Viacom18 has been approved by the Competition Commission of India (CCI). This deal, valued at $4 billion, is the largest in India’s media and entertainment sector.
The Indian market continues to show strength in fundraising, with Qualified Institutional Placements (QIPs) hitting a four-year high in 2024. From January to August, 55 companies have collectively raised a substantial 58,425 crore. Notably, Vedanta and Adani Energy Solutions have been leading the charge, raising 8,500 crore and 8,373 crore, respectively. This robust QIP activity demonstrates confidence in the market’s growth potential.
In a final note, the Centre’s Special Assistance for Capital Expenditure program has primarily benefitted BJP-ruled states, with Uttar Pradesh and Madhya Pradesh receiving a significant portion of the 15,120 crore released to 11 states between April and July. The program, with a total allocation of 1.5 trillion for the fiscal year, aims to stimulate infrastructure development across the nation.
