India Orders PSU Banks, Insurers to Cut Costs, Shift to EVs Amid Global Tensions
New Delhi, May 23, KNT: The Indian Finance Ministry has directed public sector banks, state-owned insurance companies and financial institutions to implement austerity measures, including restrictions on travel and a phased shift toward electric vehicles (EVs), as part of efforts to curb administrative expenditure and protect the economy from the impact of rising global and Middle East tensions.
The directive, issued by the Department of Financial Services (DFS), applies to major institutions including State Bank of India, Bank of Baroda and Life Insurance Corporation of India, affecting millions of employees across the country.
Under the new guidelines, meetings, reviews and consultations are to be conducted through video conferencing unless physical presence is considered essential. The ministry has also ordered sharp curbs on foreign travel by senior executives, including chairpersons, managing directors and chief executive officers, with overseas engagements to be attended virtually wherever possible.
The move forms part of a broader austerity push after Prime Minister Narendra Modi urged restraint in spending amid concerns over the economic fallout of prolonged geopolitical instability and conflict in West Asia.
Alongside travel restrictions, the ministry has directed institutions to accelerate adoption of electric vehicles. According to the order, organizations should aim to replace petrol and diesel vehicles hired for head and branch offices with electric cars “as far as possible,” while existing fleets are to be transitioned gradually in a phased manner.
The Finance Ministry’s directive, officials say is intended to reduce operational expenses while simultaneously supporting India’s clean mobility agenda. Officials believe increased reliance on virtual meetings and EV adoption could lower travel, fuel and administrative costs over time.
The measures come against the backdrop of heightened concern over global economic pressures linked to conflict in West Asia, which analysts warn could slow growth, increase inflation and place additional strain on India’s balance of payments and currency stability. [KNT]
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