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The benchmark stock indices opened the day on a negative note, witnessing a correction after yesterday’s strong rally.
Join us as we follow the top business news through the day.
12:30 PM
Labour codes to herald new wave of reforms in 2021; job creation likely to be major challenge
The change labor reforms could bring about in 2021.
PTI reports: “The implementation of four labour codes in one go from April 1 next year will usher in a new wave of reforms in industrial relations and also help in attracting more investments but employment generation will remain a key challenge in 2021.
This year has also been a challenging year for the work force as well as for employers due to the outbreak of the COVID-19 pandemic. The government imposed a nationwide lockdown from March 25, which had an adverse impact on economic activities and resulted in exodus of migrant workers from large cities to their homes in the hinterland.
Many migrant labourers lost their jobs and it took months for them to return back to their work places from their native places.
Bharatiya Mazdoor Sangh (BMS) Research Wing Head and former General Secretary Virjesh Upadhyay said that firstly, India will have to face a big challenge in terms of restoring jobs of a large number of workers who lost their livelihood due to the pandemic.
“Secondly, creating new jobs would not be a cake walk because employment generation would be badly hit due to sluggish economy, automation and new concepts like Work From Home (WFH) evolved during the pandemic,” he told PTI.
He is of the view that the government has done what it could have done in 2020 to provide relief to employees and employers. Now, the policy makers would also have to think about tweaking new labour codes set to be implemented in 2021 considering the new normal in view of the pandemic effect on the overall economy, he added.
According to him, the overall consumption in the economy would not improve unless people have jobs and merely boosting production would not alone help the economy to return to pre-COVID-19 levels.
However, during the pandemic, the central government was successful in getting Parliament”s approval for three labour codes on Industrial Relations, Social Security and Occupational Health Safety & Working Conditions (OSH) this year.
The Code on Wages was approved by Parliament last year and its rules have been firmed up. But the implementation of the rules for Code on Wages was held back because the government wanted to implement all four labour codes in one go.
The government notified draft rules for the three codes for seeking stakeholders” feedback this year and the deadline for submitting the feedback will end in the first week of January.
The Ministry of Labour & Employment had also called a tripartite meeting for deliberations on the rules on the codes of wages and industrial relations on December 24. The next tripartite meeting is scheduled for January 12 to deliberate on codes on social security and OSH.
“We want to implement the four labour codes in one go from April 1, 2021. The deadlines for receiving feedback on codes on industrial relations, social security and OSH would be over by January,” Labour Secretary Apurva Chandra told PTI.
With the implementation of these four codes, Chandra said the government wants to create a conducive environment for investors as well as to provide better social security to workers and protect their rights.
He also said that the main focus of the ministry would be to implement Aatmanirbhar Bharat Rojgar Yojana (ABRY) with an outlay of Rs 22,810 crore to boost fresh hiring and successful implementation of four labour codes in 2021.
The labour codes would not only provide social security to organised sector employees but also to informal sector workers like gig and platform workers. This means that the entire workforce of over 50 crore in the country would get social security coverage under the new legal framework from April onwards.
Gig and platform workers are those who are not on the rolls of an organisation and they are not entitled to get various social security benefits.
“I wish New Year 2021 will usher in a new era of development in the country and also ensure wage security, healthy and safe working conditions, social security and harmonious industrial relations consequent upon enactment of the new labour codes. It will be a year of hope, prosperity and growth for our 50 crore workforce as well as for our industry as both share a symbiotic relationship,” Labour Minister Santosh Gangwar told PTI.
The minister also said that the Code on Wages, universalising the right of minimum wages to all 50 crore workforce was already enacted in 2019.
As a part of legislative reforms, codification of existing central labour laws into four labour codes is now a reality. These legislative reforms are in sync with the transformed work environment and seek to achieve the objective of securing the basic rights of the workers as well as catalysing employment generation by simplifying the complex compliance structure of present labour laws.
According to Gangwar, implementation of the labour codes will ensure ease of living for the workforce as it will universalise wage security, social security and safe working conditions to a large extent.
The minister also said the labour ministry has taken various initiatives like four all India surveys on migrant workers, domestic workers, employment generated by professionals and transport sector.
These surveys would help to create an online database of unorganised workers, including migrant workers, and collection of all statistical returns under the four labour codes by the Labour Bureau.
Director General of the Labour Bureau D S Negi said data collection work on the four surveys would begin by March and final reports would come out in October, which would help policy makers to design schemes, initiatives and interventions appropriately in sync with the need of the hour.
The lag in the data collection and its reporting has been an issue in the country as such a situation often misleads policy makers while taking calls on issues that need to be seen in the context of present times.
The government has also taken many initiatives to help workers affected adversely due to COVID-19. These steps include allowing withdrawal of non-refundable advance from employees” provident fund accounts, providing 50 per cent of three months” wages to insured persons who lost their jobs during the pandemic under ABVKY (Atal Bimit Vyakti Kalyan Yojana) and launching of ABRY to boost fresh hiring.
All said and done, how far the measures will help restore jobs and create fresh employment will have to be seen in 2021.”
12:00 PM
Policy roll-back may dent banks’ health, says RBI
In 2020-21, as policy support is rolled back, the impact of the COVID-19 pandemic may dent the health of the banks and non-banks, the Reserve Bank of India (RBI) said in its Report on Trend and Progress of Banking in India 2019-20.
In order to mitigate the impact of COVID-19, the RBI allowed lending institutions to grant a moratorium on payment of instalments of term loans due between March 1, 2020, and May 31, 2020, which was later extended till August 31, 2020. The report said as at end-August 2020, borrowers accounting for about 40% of outstanding loans of in the financial system (ie banks and NBFCs) had availed of the moratorium allowed by the government.
This is a statutory publication in compliance with Section 36 (2) of the Banking Regulation Act, 1949 and this Report presents the performance of the banking sector, including co-operative banks, and non-banking financial institutions during 2019-20 and 2020-21 so far.
11:30 AM
Daffodil announces ”Work from Anywhere” job opportunities to hire Remote Employees
New trends in the labor market.
PTI reports: “Daffodil Software announced the launch of ”Work from Anywhere” job opportunities with plans to recruit remote employees in technical roles. The company plans to run the hiring drive across India boosting its remote work culture.
After the ”work from home” culture has been embraced globally due to the pandemic – organizations world over are now focusing on giving their employees the best competitive advantage of ”work from anywhere” promoting employee flexibility and comfort. Daffodil has also realized the sustainability of ”work from anywhere” and its importance in increasing its EX or Employee Experience. It not only gives employees freedom to work from anywhere but increases the overall employee productivity. From the company perspective, it allows Daffodil to tap into the countrywide talent pool that was earlier limited to its regional offices.
The IT services provider also announced hiring 500 new employees demonstrating a business growth of 45% amid COVID-19. This only strengthened the management”s decision to introduce new opportunities for its remote employees. Daffodil”s growth can be attributed to the timely project management, delivery, and sheer tenacity and adaptability shown by its employees in these unprecedented times.
The company was able to deliver large software projects because of its advanced tools and training imparted to the employees which enabled them to continue with the workflow without any hiccups in a work from home setup.
“The drastic changes brought by the pandemic in the global work culture has made us adopt a new concept and lifestyle. The new normal ”work from home” has been now shifted to ”work from anywhere” and has made it convenient for many remote job seekers to get hired and make the most of such opportunities. We look forward to create an optimal environment for our remote employees focusing on employee experience,” said Yogesh Agarwal, CEO & Founder (Daffodil Software).
About Daffodil Software: For more than 20 years, Daffodil Software has been a trusted software technology partner to organizations across the globe. With our roots into innovation, tech agility, & time-proven processes, our team of 800+ technologists strive to shape the tech industry and help businesses elevate their value proposition through technology.”
11:00 AM
‘Deference to those with influence fuels money laundering’
Banks’ deferential treatment towards powerful and influential people is one of the reasons money laundering has risen in the country in recent years, India’s largest bank’s compliance chief said on Tuesday.
State Bank of India’s Group Compliance Officer Soma Sankar Prasad also stressed that India ‘unfortunately’ had no distinct norms in place for ‘politically exposed persons’ opening bank accounts.
“There are certain powerful and influential customers… In India, we still have this hierarchy in terms of power and influence with the result that you treat different people differently.
“That also happens in banks… so when certain important people come into the bank for opening an account, you don’t ask for all the details and you open the account. So that is again one of the reasons that things can go wrong,” he said.
10:30 AM
India’s financial sector faces challenging times ahead – RBI
Cautious words from the RBI.
Reuters reports: “India’s financial sector should brace for challenging times ahead with an increased risk of deterioration in asset quality and lower demand for loans, the Reserve Bank of India (RBI) said in a report on Tuesday.
The central bank has introduced various measures to support the banking sector including a relaxation in recognition and provisions for bad loans to protect lenders and creditors during the coronavirus pandemic.
The roll back of these measures could now hit the books of banks.
“The challenge is to rewind various relaxations in a timely manner, reining in loan impairment and adequate capital infusion for a healthy banking sector,” the central bank said it in its annual report on Trends and Progress of Banking in India.
Non-banking financial companies (NBFCs) or shadow banks may see a hit on their profitability going forward due to asset quality concerns, lower credit demand and the tendency to preserve cash, the report said.
Toxic loans on the books of Indian banks have eased with gross bad loan ratios falling to 7.5% at the end of September 2020 from 9.1% in March, but it said that going forward such loans could rise again following relaxations being lifted.
The six-month loan moratorium on repayments provided by central banks and the supreme court judgment prohibiting recognition of bad loans since September may have also provided some respite to the banks on asset quality.
Concerns still remain on non-performing assets, particularly on credit card loans which does not augur well for the risk-profile of Indian banks.
“Given the uncertainty induced by COVID-19 and its real economic impact, the asset quality of the banking system may deteriorate sharply going forward,” the RBI said.
The report also said Indian banks had written-off loans worth 2.38 trillion rupees ($32.46 billion) in the financial year 2020 that ended on March 31.
The overall outlook for the Indian economy in 2021 continues to remain uncertain, the report said.
“The high debt overhang of households, non-financial corporates and the (national and sub-national) governments remains a serious concern,” the central bank said.”
10:00 AM
Sensex, Nifty retreat on profit booking after record rally
A modest correction in stocks this morning.
PTI reports: “Key benchmark indices Sensex and Nifty declined in early trade on Wednesday as profit booking emerged in banking and financial stocks after a stellar five-day rally.
The 30-share BSE Sensex had opened higher by 0.10 per cent but failed to hold onto gains in early trade and declined by 102.99 points or 0.22 per cent to 47,510.09.
The broad based Nifty was down by 27.45 points or 0.2 per cent at 13,905.15 with 31 of its constituents trading in the red. The 50-share index had opened higher by 10.75 points at 13,943.35.
Banking stocks like State Bank of India, IndusInd Bank, Axis Bank and ICICI Bank were among major losers among Sensex stocks. Besides, HDFC, Reliance, Bharti Airtel, Larsen & Toubro and Sun Pharma also dropped due to profit booking.
Sensex and Nifty had scaled fresh record highs on Tuesday, extending their bull run for the fifth straight session on the back of gains in banking and IT stocks.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 2,349.53 crore on a net basis on Tuesday, according to provisional exchange data.
Asian shares were mixed after a lacklustre day on Wall Street. The S&P 500 lost 0.2 per cent on Tuesday, a day after President Donald Trump signed the USD 900 billion economic relief package.
Japan”s Nikkei 225 fell 0.6 per cent a day after it surged more than 2 per cent to its highest level in more than 30 years. Hong Kong rose by 1.2 per cent while the Shanghai Composite index advanced 0.7 per cent and South Korea”s Kospi added 0.6 per cent.”
9:30 AM
Sebi fines NDTV ₹5 crore over disclosure lapses; company to appeal against order
Markets regulator Sebi on Tuesday imposed a penalty of ₹5 crore on NDTV for its failure to disclose price-sensitive information about VCPL loan agreements but the company denied the charges and said it will appeal against the ruling.
The loan agreements had clauses and conditions that substantially affected the functioning of the media company, Sebi said in its order.
The regulator said its probe began after receipt of complaints in 2017 from Quantum Securities Pvt Ltd about an alleged violation of rules by non-disclosure of material information to the shareholders about loan agreements with Vishvapradhan Commercial Private Ltd (VCPL).
As per Sebi, a loan amount of ₹350 crore was borrowed by the promoters of NDTV under the VCPL loan agreement in 2009 to repay earlier loan availed from ICICI Bank and a second loan agreement with VCPL was signed for ₹53.85 crore a year later.
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