Wednesday, December 15, 2021

India in Crisis: Unemployment and Hunger Persist After Waves of COVID

India lost 6.8 million salaried jobs and 3.5 million entrepreneurs in November alone. Many among the unemployed can no longer afford to buy food, causing a significant spike in hunger. The country's economy is finding it hard to recover from COVID waves and lockdowns, according to data from multiple sources. At the same time, the Indian government has reported an 8.4% jump in economic growth in the July-to-September period compared with a contraction of 7.4% for the same period a year earlier.  This raises the following questions: Has India had jobless growth? Or its GDP figures are fudged? If the Indian economy fails to deliver for the common man, will Prime Minister Narendra Modi step up his anti-Pakistan and anti-Muslim rhetoric to maintain his popularity among Hindus?


Labor Participation Rate in India. Source: CMIE


Unemployment Crisis:

India lost 6.8 million salaried jobs and its labor participation rate (LPR) slipped from 40.41% to  40.15% in November, 2021, according to the Center for Monitoring Indian Economy (CMIE).  In addition to the loss of salaried jobs, the number of entrepreneurs in India declined by 3.5 million. India's labor participation rate of 40.15% is lower than Pakistan's 48%.   Here's an except of the latest CMIE report:

"India’s LPR is much lower than global levels. According to the World Bank, the modelled ILO estimate for the world in 2020 was 58.6 per cent (https://data.worldbank.org/indicator/SL.TLF.CACT.ZS). The same model places India’s LPR at 46 per cent. India is a large country and its low LPR drags down the world LPR as well. Implicitly, most other countries have a much higher LPR than the world average. According to the World Bank’s modelled ILO estimates, there are only 17 countries worse than India on LPR. Most of these are middle-eastern countries. These are countries such as Jordan, Yemen, Algeria, Iraq, Iran, Egypt, Syria, Senegal and Lebanon. Some of these countries are oil-rich and others are unfortunately mired in civil strife. India neither has the privileges of oil-rich countries nor the civil disturbances that could keep the LPR low. Yet, it suffers an LPR that is as low as seen in these countries".




Labor Participation Rates for Selected Nations. Source: World Bank/ILO

Youth  unemployment for ages15-24 in India is 24.9%, the highest in South Asia region. It is 14.8% in Bangladesh 14.8% and 9.2% in Pakistan, according to the International Labor Organization and the World Bank.  

Youth Unemployment in Bangladesh, India and Pakistan. Source: ILO, WB


In spite of the headline GDP growth figures highlighted by the Indian and world media, the fact is that it has been jobless growth. The labor participation rate (LPR) in India has been falling for more than a decade. The LPR in India has been below Pakistan's for several years, according to the International Labor Organization (ILO). 

Even before the COVID19 pandemic, India's labor participation rate was around 43%, lower than its neighbors'. Now it has slipped further to about 40%. Meanwhile, the Indian government has reported an 8.4% jump in economic growth in the July-to-September period compared with a contraction of 7.4% for the same period a year earlier.  This raises the following questions: Has India had jobless growth? Or its GDP figures are fudged?  If the Indian economy fails to deliver for the common man, will Prime Minister Narendra Modi step up his anti-Pakistan and anti-Muslim rhetoric to maintain his popularity among Hindus?

Indian Employment Trends By Sector. Source: CMIE Via Business Standard


Hunger Crisis:
'
India ranks 94th among 107 nations ranked by World Hunger Index in 2020. Other South Asians have fared better: Pakistan (88), Nepal (73), Bangladesh (75), Sri Lanka (64) and Myanmar (78) – and only Afghanistan has fared worse at 99th place. The COVID19 pandemic has worsened India's hunger and malnutrition. Tens of thousands of Indian children were forced to go to sleep on an empty stomach as the daily wage workers lost their livelihood and Prime Minister Narendra Modi imposed one of the strictest lockdowns in the South Asian nationPakistan's Prime Minister Imran Khan opted for "smart lockdown" that reduced the impact on daily wage earners. China, the place where COVID19 virus first emerged, is among 17 countries with the lowest level of hunger. 

World Hunger Rankings 2020. Source: World Hunger Index Report


India Among Worst Hit: 

India has a 17.3% child wasting rate, the worst in the South Asia region. Child stunting is also extremely high across South Asia. “Data from 1991 through 2014 for Bangladesh, India, Nepal, and Pakistan showed that stunting is concentrated among children from households facing multiple forms of deprivation, including poor dietary diversity, low levels of maternal education, and household poverty,” the World Hunger Report said. China, the place where COVID19 virus first emerged, is among 17 countries with the lowest level of hunger. 

Hunger and malnutrition are worsening in parts of sub-Saharan Africa and South Asia because of the coronavirus pandemic, especially in low-income communities or those already stricken by continued conflict. 

India has performed particularly poorly because of one of the world's strictest lockdowns imposed by Prime Minister Modi to contain the spread of the virus. 

Hanke Annual Misery Index: 

Pakistanis are less miserable than Indians in the economic sphere, according to the Hanke Annual Misery Index (HAMI) published in early 2021 by Professor Steve Hanke. With India ranked 49th worst and Pakistan ranked 39th worst, both countries find themselves among the most miserable third of the 156 nations ranked. Hanke teaches Applied Economics at Johns Hopkins University in Baltimore, Maryland. Hanke explains it as follows: "In the economic sphere, misery tends to flow from high inflation, steep borrowing costs, and unemployment. The surefire way to mitigate that misery is through economic growth. All else being equal, happiness tends to blossom when growth is strong, inflation and interest rates are low, and jobs are plentiful". Several key global indices, including misery index, happiness index, hunger index, food affordability index, labor force participation rate,  ILO’s minimum wage data, all show that people in Pakistan are better off than their counterparts in India.   

Pakistan's Real GDP: 

Vehicles and home appliance ownership data analyzed by Dr. Jawaid Abdul Ghani of Karachi School of Business Leadership suggests that the officially reported GDP significantly understates Pakistan's actual GDP.  Indeed, many economists believe that Pakistan’s economy is at least double the size that is officially reported in the government's Economic Surveys. The GDP has not been rebased in more than a decade. It was last rebased in 2005-6 while India’s was rebased in 2011 and Bangladesh’s in 2013. Just rebasing the Pakistani economy will result in at least 50% increase in official GDP.  A research paper by economists Ali Kemal and Ahmad Waqar Qasim of PIDE (Pakistan Institute of Development Economics) estimated in 2012 that the Pakistani economy’s size then was around $400 billion. All they did was look at the consumption data to reach their conclusion. They used the data reported in regular PSLM (Pakistan Social and Living Standard Measurements) surveys on actual living standards. They found that a huge chunk of the country's economy is undocumented. 

Pakistan's service sector which contributes more than 50% of the country's GDP is mostly cash-based and least documented. There is a lot of currency in circulation. According to the State Bank of Pakistan (SBP), the currency in circulation has increased to Rs. 7.4 trillion by the end of the financial year 2020-21, up from Rs 6.7 trillion in the last financial year,  a double-digit growth of 10.4% year-on-year.   Currency in circulation (CIC), as percent of M2 money supply and currency-to-deposit ratio, has been increasing over the last few years.  The CIC/M2 ratio is now close to 30%. The average CIC/M2 ratio in FY18-21 was measured at 28%, up from 22% in FY10-15. This 1.2 trillion rupee increase could have generated undocumented GDP of Rs 3.1 trillion at the historic velocity of 2.6, according to a report in The Business Recorder. In comparison to Bangladesh (CIC/M2 at 13%), Pakistan’s cash economy is double the size. Even a casual observer can see that the living standards in Pakistan are higher than those in Bangladesh and India. 

Related Links:


Haq's Musings

South Asia Investor Review

Pakistan Among World's Largest Food Producers

Naya Pakistan Housing Program

Food in Pakistan 2nd Cheapest in the World

Indian Economy Grew Just 0.2% Annually in Last Two Years

Pakistan to Become World's 6th Largest Cement Producer by 2030

Pakistan's 2012 GDP Estimated at $401 Billion

Pakistan's Computer Services Exports Jump 26% Amid COVID19 Lockdown

Coronavirus, Lives and Livelihoods in Pakistan

Vast Majority of Pakistanis Support Imran Khan's Handling of Covid19 Crisis

Pakistani-American Woman Featured in Netflix Documentary "Pandemic"

Incomes of Poorest Pakistanis Growing Faster Than Their Richest Counterparts

Can Pakistan Effectively Respond to Coronavirus Outbreak? 

How Grim is Pakistan's Social Sector Progress?

Pakistan Fares Marginally Better Than India On Disease Burdens

Trump Picks Muslim-American to Lead Vaccine Effort

COVID Lockdown Decimates India's Middle Class

Pakistan Child Health Indicators

Pakistan's Balance of Payments Crisis

How Has India Built Large Forex Reserves Despite Perennial Trade Deficits

Conspiracy Theories About Pakistan Elections"

PTI Triumphs Over Corrupt Dynastic Political Parties

Strikingly Similar Narratives of Donald Trump and Nawaz Sharif

Nawaz Sharif's Report Card

Riaz Haq's Youtube Channel

92 comments:

Rana said...

A more detailed unemployment data for India:

https://unemploymentinindia.cmie.com/


Regarding hunger and food insecurity, the problem is not related to the food production in India but something much more shameful.

"One, the number of poor with incomes less than $2 per day has more than doubled in the last one year. The World Bank estimates that this number has gone up by 75 million owing to the pandemic induced recession. Naturally, the poor have stopped consuming the more expensive food, which is relatively richer in nutrients. This is likely to further exacerbate the undernutrition crisis in India. The abundance of food in the market is not sufficient to eradicate hunger unless people have the required purchasing power.

Second, the Accountability Initiative of the Centre for Policy Research suggests that only 44% of the total allocated funds to the Integrated Child Development Services, whose mandate includes providing nutritional meals to children under six, were utilised in 2018-’19.

Furthermore, out of the total funds allocated for the Mid Day Meal Scheme for children in 2018-’19, only 14 states in India utilised the funds entirely. Based on the findings of the economist, Jean Dréze, this issue takes another turn. His estimates, which take inflation into account, show that the allocation of the Mid Day Meal Scheme has reduced by a staggering 32.3% between 2014 and 2021.

The Public Distribution System has proven to be a lifeline for millions of people since the lockdown in 2020 but there are concerns that are still prevalent regarding its national coverage. As per the National Food Security Act, 67% of the total population should be included in the Public Distribution System.

When we apply this to the population today, at least 90 crore people should be covered. The reality, however, is that only 80 crore people are included, which is just 59% of the total population in India. The data also suggests that 5.1 crore people are getting limited coverage and 40 crore people are left out entirely from the Public Distribution System.

Food insecurity remains an alarming issue due to such entitlement failures in India. While the government has rejected the findings of the Global Hunger Index as “unscientific”, we cannot ignore the dismal ground realities."

Source: https://scroll.in/article/1008089/why-does-india-struggle-to-battle-hunger

Syed Ali said...

India is reporting fake GDP growth for many years. India had highest unemployment rate in 42 years just before pandemic but India was reporting 8% GDP. Which is impossible. Similarly now India lost 6.8M jobs in Nov. Only, there is no way India has 8.5% GDP growth

samir sardana said...

The Doom of Indian LPR and number of entrepreneurs,has a simple fundamental reason.

Demo + GST + COVID has destroyed the SME and Unorganised sector

Hence,the REAL EMPLOYMENT IS DEAD,as REAL ENTERPRISE is dead.

REAL EMPLOYMENT.is the jobs in the SME,and the Unorganised sector.

REAL ENTERPRISE,is in the SME and the Unorganised sector,as large companies are Chaiwala's stooges or cronies or financers,in monopoly businesses,protected by High custom tarriffs and Technical Barries to Trade.These are the "Panwari" Banias,Marwaris,Jains and Gujaratis.

GDP and GST is growing - as the REMAINING FORMAL SMEs,ARE ALSO BEING KILLED,and their businesses are shifting,to the large corporates.Exports have PEAKED,AS OMICRON HAS HIT THE EU,AND MANY MORE,ARE ON THE WAY.

So from hereon GST and GDP will stagnate or decline,more so as the GDP growth was infra led,and all the infra inputs,came from large corporates.INFRA IS END POINT OF GST CHAIN - SO THERE IS NO GST OFFSET - AND SO,THE GOI GAINS BY PRINTING CASH,TO STIMULATE THE INFRA - AND THUS,SHOWS HIGHER GST.

Hence,the entire superstructure of Chaiwala is BOGUS.Banks are bankrupt,and it is the heart,which pumps the oxygenated blood.RBI can keep printing the Blood - but the punping mechanism is dead - and the body is,as good as dead.

RBI and Banks have inflated the property and stock market - as large amounts of loans and consumer credit,is secured on these 2 assets,which are completely bogus.When these collapse - banks collapse,and then,industry collapses and India dies - and Chaiwala is back to selling Chai in Gujarat.

That time has come,and this noble deed,was done by a Virus.

The Indians do not understand,that right from the time of the Scythians.Sakyas,Sakas,the biggest evil and enemy of the Indian nation,and the lower classes of Indians are the Panwari Banias - and they are ruling the Nation today - in the hot seat !

A - AGARWAL

B - BAJAJ

C - CHORDIA

D - DALMIA

E - EMAMI

G - GUPTA MEESHTAN BHANDAR

J - JAIN

K - KANORIA ..

L - LAKHOTIA

M - MODI

Thus,doom is inevitable.dindooohindoo

Riaz Haq said...

Aakar Patel
@Aakar__Patel
weird - both bhakt & hater looking at same data, same performance. no dispute on gdp growth decline, shrunken workforce, zero growth since 2014 on sales of cars, 2 wheelers, residential properties. 60% population surviving on free grain

yet one side believes modi has performed

https://twitter.com/Aakar__Patel/status/1473534330454507522?s=20

Riaz Haq said...

#India's #Jobs #crisis: urban unemployment at 9.1%, highest in 4 months. 29.3% Haryana tops in #unemployment, followed by #Kashmir 21.4%, #Rajasthan 20.4%, #Bihar 14.8%, Himachal Pradesh 13.6%, Tripura 13.4%, Goa 12.7% & Jharkhand 11.2%. #Modi #economy https://www.dailypioneer.com:443/2021/india/urban-unemployment-9-1---highest-in-4-mths.html

The urban unemployment rate stood at 9.1 per cent as on December 18 which is the highest since August. The all India unemployment rate recorded 7.6 per cent as on December 17 which is also high as compared to 7 per cent in November. The rural unemployment rate stood at 6.9 per cent as compared to 6.44 per cent in November. Unemployment is going to be a major poll issue in the upcoming assembly polls in five states.

The Centre for Monitoring Indian Economy (CMIE), which tracks the labour market with proprietary tools, showed that with 29.3 per cent Haryana is in the top among the states and union territories in unemployment, followed by Jammu and Kashmir with 21.4 per cent and Rajasthan with 20.4 per cent. Bihar ( 14.8 per cent), Himachal Pradesh ( 13.6 per cent), Tripura ( 13.4 per cent), Goa ( 12.7 per cent) and Jharkhand ( 11.2 per cent) are among those states having double digit unemployment in December. The unemployment rate in Delhi is recorded at 9.3 per cent.

The data showed the unemployment rate declined from 7.8 per cent in October to 7 per cent in November; the employment rate rose by a whisker from 37.28 per cent to 37.34 per cent. This translated into employment increasing by 1.4 million, from 400.8 million to 402.1 million in November 2021.

India's unemployment rate at the national level stood at 7.75 per cent in October, 6.86 per cent in September, 8.32 per cent in August, 6.96 per cent in July, 9.17 per cent in June and 11.84 per cent in May. The Urban unemployment rate stood at 7.38 per cent in October, 8.62 per cent in September, 9.78 per cent in August, 8.32 per cent in July, 10.08 per cent in June and 14.72 per cent in May. The rural unemployment rate stood at 7.91 per cent in October, 6.06 per cent in September, 7.64 per cent in August, 6.34 per cent in July, 8.75 per cent in June and 10.55 per cent in May.

According to the CMIE, the data in November showed the labour participation rate (LPR) has slipped. It fell from 40.41 per cent in October to 40.15 per cent in November. This is the second consecutive month of a fall in the LPR. Cumulatively, the LPR has fallen by 0.51 percentage points over October and November 2021. This makes it a significant fall in the LPR compared to average changes seen in other months if we exclude the months of economic shock such as the lockdown.

As per the CMIE, the creation of additional jobs pushed up India’s employment rate to 37.87% in September as compared to 37.15% in August. Further, the employment rate in rural India jumped by 0.85 percentage points to 39.53% in September as against 38.68% in August while that in urban India grew to 34.62% compared with 34.15% in August. Of the 8.5 million additional people employed in September, 6.5 million or 76.5% of the total employment generation was in rural India,” CMIE stated in its weekly labour market analysis early this month.

Riaz Haq said...

World #Inequality report 2022 says #India is one of the world' most unequal countries, with rising #poverty & an affluent elite. Govt policies have had a negative impact on the #poor while making the #rich even richer. #Modi #BJP #Islamophobia #Hindutva https://www.npr.org/sections/goatsandsoda/2021/12/23/1065267029/a-coconut-seller-and-a-day-laborer-reflect-on-life-in-astoundingly-unequal-india?utm_campaign=storyshare&utm_source=twitter.com&utm_medium=social

If growth had been distributed more equally since the 1990s, there would be less poverty today and more middle-class families, says Chancel. In order to generate prosperity for the bottom 50% of the population, public investments are key — equal access to basic services such as quality education, transport and health, says Chancel. "This is still lacking in India."


--------------

According to the World Food Program, a quarter of the world's undernourished people live in India. And despite steady economic growth and per capita income having tripled in recent years, the WFP notes that minimum dietary intake fell.
-----------
It's almost as if there are two countries in India: a very small, very rich country (the country of prosperous Indian urban centers) and a very large, poor country, says Lucas Chancel, lead author of the report and co-director of the World Inequality Lab. "For a long time, it has been said that the richer the rich part of the country, the better for the rest," he says.


The coconut seller Pachavarnam hasn't felt that, though. And experts like Chancel acknowledge that this is an outlook that's left many families vulnerable.

A coconut vendor says she's 'terrified of the future'
Panchavarnam, who goes by one name, has sold tender coconuts on the streets of Madurai for the last 40 years and remembers a time when the bustling residential neighborhood where she now sells her wares used to be a forest. Today, it's filled with signs of development. There's a highway close by. Busy streets brim over with traffic. In the last decade, apartment complexes, department stores and schools have sprung up around her.

For the 50-year-old, however, little has changed.

She still works 12 hours a day. It's a job she's been doing since the age of 9 helping her dad. That's when she first learned how to hold a sickle to slice into the thick, fibrous coconut. She and her husband begin their workday at 5 a.m., when she buys the coconuts from a wholesale market to fill their rented cart.

She may sell her coconuts at a higher price than she did ten years ago, but her family's daily living expenses and rental for her cart have increased too. Inflation has skyrocketed. But even though her profit may be wafer thin, she's grateful she can at least work.

"During the lockdown, we suffered a lot," she says. "It struck me then how little we had saved. For the first time, I was terrified of the future. What would happen to me and my family if we could no longer work?"

Panchavarnam is one of India's many informal workers, an estimated 485 million people — which according to a 2014 survey by the government of India's Labour Bureau is roughly 50% of the national workforce. Some reports estimate that their numbers are far higher — almost 80% of the workforce. While Panchavarnam is self-employed, other informal workers are hired by companies. But their situation isn't necessarily any easier.

A female construction worker's dusty burden
Selvi, 37, is a construction worker in Chennai, a city in Southern India, who earns Rs 350 ($4.60) a day, carrying heavy loads of cement, bricks and gravel. She winds a thick cloth turban style over her head and places her loads directly on it.


https://wir2022.wid.world/www-site/uploads/2021/12/Summary_WorldInequalityReport2022_English.pdf

Salah Mohid said...

https://tribune.com.pk/article/46637/do-pakistans-leaders-care-more-about-extravagant-weddings-than-the-well-being-of-their-own-citizens

Riaz Haq said...

India’s Stalled Rise
How the State Has Stifled Growth
By Arvind Subramanian and Josh Felman
January/February 2022

https://www.foreignaffairs.com/articles/india/2021-12-14/indias-stalled-rise


As growth slowed, other indicators of social and economic progress deteriorated. Continuing a long-term decline, female participation in the labor force reached its lowest level since Indian independence in 1948. The country’s already small manufacturing sector shrank to just 13 percent of overall GDP. After decades of improvement, progress on child health goals, such as reducing stunting, diarrhea, and acute respiratory illnesses, stalled.

And then came COVID-19, bringing with it extraordinary economic and human devastation. As the pandemic spread in 2020, the economy withered, shrinking by more than seven percent, the worst performance among major developing countries. Reversing a long-term downward trend, poverty increased substantially. And although large enterprises weathered the shock, small and medium-sized businesses were ravaged, adding to difficulties they already faced following the government’s 2016 demonetization, when 86 percent of the currency was declared invalid overnight, and the 2017 introduction of a complex goods and services tax, or GST, a value-added tax that has hit smaller companies especially hard. Perhaps the most telling statistic, for an economy with an aspiring, upwardly mobile middle class, came from the automobile industry: the number of cars sold in 2020 was the same as in 2012.

--------

Adding to a decade of stagnation, the ravages of COVID-19 have had a severe effect on Indians’ economic outlook. In June 2021, the central bank’s consumer confidence index fell to a record low, with 75 percent of those surveyed saying they believed that economic conditions had deteriorated, the worst assessment in the history of the survey.

Riaz Haq said...

India’s Stalled Rise
How the State Has Stifled Growth
By Arvind Subramanian and Josh Felman
January/February 2022

https://www.foreignaffairs.com/articles/india/2021-12-14/indias-stalled-rise



For the Indian economy to achieve its potential, however, the government will need a sweeping new approach to policy—a reboot of the country’s software. Its industrial policy must be reoriented toward lower trade barriers and greater integration into global supply chains. The national champions strategy should be abandoned in favor of an approach that treats all firms equally. Above all, the policymaking process itself needs to be improved, so that the government can establish and maintain a stable economic environment in which manufacturing and exports can flourish.

But there is little indication that any of this will occur. More likely, as India continues to make steady improvements in its hardware—its physical and digital infrastructure, its New Welfarism—it will be held back by the defects in its software. And the software is likely to prove decisive. Unless the government can fundamentally improve its economic management and instill confidence in its policymaking process, domestic entrepreneurs and foreign firms will be reluctant to make the bold investments necessary to alter the country’s economic course.

There are further risks. The government’s growing recourse to majoritarian and illiberal policies could affect social stability and peace, as well as the integrity of institutions such as the judiciary, the media, and regulatory agencies. By undermining democratic norms and practices, such tendencies could have economic costs, too, eroding the trust of citizens and investors in the government and creating new tensions between the federal administration and the states. And India’s security challenges on both its eastern and its western border have been dramatically heightened by China’s expansionist activity in the Himalayas and the takeover of Afghanistan by the Pakistani-supported Taliban.

If these dynamics come to dominate, the Indian economy could experience another disappointing decade. Of course, there would still be modest growth, with some sectors and some segments of the population doing particularly well. But a broader boom that transforms and improves the lives of millions of Indians and convinces the world that India is back would be out of reach. In that case, the current government’s aspirations to global economic leadership may prove as elusive as those of its predecessors.

Riaz Haq said...

Manufacturing employment nearly half of what it was five years ago
Manufacturing accounts for nearly 17% of India's GDP, but the sector has seen employment decline sharply in last 5 years - from employing 51 million Indians in 2016-17 to reach 27.3 million in 2020-21

https://www.business-standard.com/article/economy-policy/ceda-cmie-bulletin-manufacturing-employment-halves-in-five-years-121050601086_1.html


With the second wave of the coronavirus pandemic battering India at present, the Indian economic outlook looks bleak for the second year in a row. In 2020-21, India’s real GDP growth is estimated to be minus 8 per cent. This would also put pressure on India’s employment numbers. In previous bulletins, we have analysed the impact of Covid-19 pandemic on employment, individual and household incomes and expenditures in 2020.

In this CEDA-CMIE Bulletin, we try to take a longer-term view of sector-wise employment in India. We base this on CMIE’s monthly time-series of employment by industry going back to the year 2016. For this bulletin, we have focused on seven sectors – agriculture, mines, manufacturing, real estate and construction, financial services, non-financial services, and public administrative services. These sectors make up for 99 per cent of total employment in the country.

In figure 2 and 3 (below), we look at four sectors. These are agriculture, financial services, non-financial services, and public administrative services. Non-financial services exclude public administrative services and defense services. Together, these accounted for 69 per cent of total employment in 2016-17 and 78 per cent in 2020-21.

The agriculture sector employed 145.6 million people in 2016-17. This increased by 4 per cent to reach 151.8 million in 2020-21. While it constituted 36 per cent of all employment in 2016-17, the figure rose to 40 per cent in 2020-21, underlining the sector’s importance for the Indian economy. Employment in agriculture has been on the rise over the last two years with year-on-year (YoY) growth rates of 1.7 per cent in 2019-20 and 4.1 per cent in 2020-21.

119.7 million Indians were employed in the non-financial services in 2016-17 (excluding those in public administrative services and defense services) (Figure 3). This number rose by 6.7 per cent to reach 127.7 million in 2020-21. The financial services sector employed 5.3 million people in 2016-17 and this grew by 9 per cent to 5.8 million in 2020-21.

Public administrative services employed 9.8 million people in 2016-17 but it decreased by 19 per cent to 7.9 million in 2020-21.

In figure 4, we look at employment in manufacturing, real estate & construction, and mining sectors. Together these sectors accounted for 30 per cent of all employment in 2016-17 which came down to 21 per cent in 2020-21.

Manufacturing accounts for nearly 17 per cent of India’s GDP but the sector has seen employment decline sharply in the last 5 years. From employing 51 million Indians in 2016-17, employment in the sector declined by 46 per cent to reach 27.3 million in 2020-21. This indicates the severity of the employment crisis in India predating the pandemic.

On a YoY basis, it employed 32 per cent fewer people in 2020-21 over 2019-20. It had seen a growth of 1 per cent (YoY) in 2019-20. This has happened despite the Indian government’s push to improve manufacturing in the country with the ‘Make in India’ project. Under the project, India sought to create an additional 100 million manufacturing jobs in India by 2022 and to increase manufacturing’s contribution to GDP to 20 per cent by 2025.

Instead of increasing employment in the sector, we have seen a sharp decline over the last 5 years. When we look closely at industries that make the manufacturing sector, we find that this is a secular decline in employment across all sub-sectors, except chemical industries.

All sub-sectors within manufacturing registered a longer-term decline.

Riaz Haq said...

Riaz Haq has left a new comment on your post "India in Crisis: Unemployment and Hunger Persist After Waves of COVID":

Kaushik Basu
@kaushikcbasu
Latest cross-country labor force participation data. How did India get here? It has some of the world's best entrepreneurs, talented administrators & skilled workers. It is important not to be in data denial. Policy needs to be corrected & re-directed to the commoner's welfare.

https://twitter.com/kaushikcbasu/status/1474938472867766280?s=20

----------------

Labor Force Participation Rates:


India 46%

Pakistan 50%

Bangladesh 56%


https://data.worldbank.org/indicator/sl.tlf.cact.zs

Riaz Haq said...

India has spent a decade wasting the potential of its young #population. Once considered a formidable asset, #India’s #demographic bulge turned toxic due to the country’s lost economic decade! #unemployment #Modi #BJP #Hindutva https://qz.com/india/2104191/india-has-wasted-the-potential-of-its-large-young-population/


For the better part of the past decade, India was touted as the next big economic growth story after China because of its relatively younger population. “Demographic dividend”—the potential resulting from a country’s working-age population being larger than its non-working-age population—was the key phrase.

Come 2022, the median age in India will be 28, well below 37 in China and the US.

Riaz Haq said...

The NMP is hardly the panacea for growth in India


https://www.thehindu.com/opinion/op-ed/the-nmp-is-hardly-the-panacea-for-growth-in-india/article37956016.ece


As the Government has also shown, there are out-of-the-box policy initiatives to revamp public sector businesses

The National Monetisation Pipeline (NMP) envisages an aggregate monetisation potential of ₹6-lakh crore through the leasing of core assets of the Central government in sectors such as roads, railways, power, oil and gas pipelines, telecom, civil aviation, shipping ports and waterways, mining, food and public distribution, coal, housing and urban affairs, and stadiums and sports complexes, to name some sectors, over a four-year period (FY2022 to FY2025). But the point is that it only underscores the need for policy makers to investigate the key reasons and processes which led to once profit-making public sector assets becoming inefficient and sick businesses.

------------------

Congress leader Sachin Pilot on Wednesday slammed the Central government over National Monetisation Pipeline (NMP) by saying that the new scheme will create monopoly and duopoly in the economy.

https://www.business-standard.com/article/current-affairs/nmp-will-create-monopoly-duopoly-in-our-economy-says-sachin-pilot-121090200108_1.html


Addressing a press conference in Bengaluru, Pilot questioned the government's decision to "lease core strategic assets of the country to private entities".


"The government said that NMP will get revenue of Rs 6 lakh crores for the next four years. The money that they will raise, will it go to fulfil the Rs 5.5 lakh crores deficit that we are running today or is it there to boost revenue," he stated.

"There is already a problem of unemployment in our country. When private entities take over the assets like railways, telecom and aviation, they will certainly lay off more people to make profits, which means more unemployment," he added.

Pilot further said that handing over important assets of the country to a handful of people will create a monopoly and duopoly in the economy.

The Congress MLA asserted that the NMP poses serious questions on the country's integrity and security. "I want to ask what stops the international funds to make an investment and take a stake in these important assets," he stated.

"There are many countries that forbid Chinese entities to bid for telecom tower or fibre optical cable. I want to question the government what safeguards have been placed in NMP to stop inappropriate entities from bidding for our core strategic assets," he added.

Pilot called the government's decision regarding NMP as 'unilateral' that happened without any discussion with trade unions, stakeholders or the Opposition. He further questioned the transparency of the whole process and how it is going to benefit people.

"Will the money raised be used to double farmers' income or to give Rs 15 lakhs to every Indian citizen as promised by the government? Or will it be used to make a building complex or in some vanity project," he questioned.

Riaz Haq said...

By Abhijit Banerjee, Nobel Laureate Economist


https://www.nytimes.com/2021/12/23/opinion/culture/holiday-feasting-rich-poor.html

There’s a long tradition among social thinkers and policymakers of treating workers as walking, talking machines that turn calories into work and work into commodities that get sold on the market. Under capitalism, food is important because it provides fuel to the work force. In this line of thinking, enjoyment of food is at best a distraction and often a dangerous invitation to indolence.

The scolding American lawmakers who want to forbid the use of food stamps to purchase junk food are part of a long lineage that goes back to the Victorian workhouses, which made sure that the food was never inviting enough to encourage sloth. It is the continuing obsession with treating working-class people as efficient machines for turning nutrients into output that explains why so many governments insist on giving bags of grain to the poor instead of money that they might waste. This infantilizes the poor and, except in very special circumstances, it does nothing to improve nutrition.

The pleasure of eating, to say nothing of cooking, has no place in this narrative. And the idea that if working people knew what was good for them, they’d simply seek out more food as fuel is a woefully limited view of the eating experience of most of the world. As anybody who has been poor or has spent time with poor people knows, eating something special is a source of great excitement.

As it is for everyone. Standing at the end of this very dark and disappointing year, almost two years into a pandemic, we all need the joy of a feast — whether actual or metaphorical.


Every village has its feast days and its special festal foods. Somewhere goats will be slaughtered, somewhere ceremonial coconuts cracked. Perhaps fresh dates will be piled on special plates that come out once a year. Maybe mothers will pop sweetened balls of rice into the mouths of their children.

Friends and relatives will come over to help roast an entire camel for Eid; to share scoops of feijoada, that wonderful Brazilian stew of beans simmered with off-cuts, from pig’s ears to cow’s tongue; to pinch the dumplings for the Lunar New Year; to fold the delicate edges of sweet coconut-stuffed Maharashtrian karanji, to be fried under the watchful eye of the matriarch. The feast’s inspiration might be religious, but it could as well be a wedding, a birth, a funeral or a harvest.

-------


This feasting season, that momentary joy is likely to feel especially essential. Most of us have had reasons to worry — about ourselves, about our children and parents, about where the world is headed. This year many lost friends and relatives, jobs and businesses. Many spent months working in Zoom-land, languishing even as they counted themselves lucky to be employed.

Riaz Haq said...

#India's #economy growing fast but problems remain: November inflation 14.23%. #Fuel and #energy prices rose nearly 40% last month. Urban #unemployment – most of the better-paying jobs are in cities – has been moving up since September and is now above 9%. https://aje.io/ytyan4

That will not be easy, say experts. The pandemic has devastated India’s micro, small and medium enterprises (MSMEs), which contribute 30 percent of the nation’s GDP as well as half of the country’s exports and represent 95 percent of its manufacturing units.

The government of Prime Minister Narendra Modi told Parliament in December that a survey it had conducted suggested that 9 percent of all MSMEs had shut down because of COVID-19. And that might be just the tip of the iceberg. In May, another survey of more than 6,000 MSMEs and startups found that 59 percent were planning to shut shop, scale down or sell before the end of 2021.


----------

Baldev Kumar threw his head back and laughed at the mention of India’s resurgent GDP growth. The country’s economy clocked an 8.4-percent uptick between July and September compared with the same period last year. India’s Home Minister Amit Shah has boasted that the country might emerge as the world’s fastest-growing economy in 2022.

Kumar could not care less.

As far as he was concerned, the crumpled receipt in his hand told a different story: The tomatoes, onions and okra he had just bought cost nearly twice as much as they did in early November. The 47-year-old mechanic had lost his job at the start of the pandemic. The auto parts store he then joined shut shop earlier this year. Now working at a car showroom in the Bengaluru neighbourhood of Domlur, he is worried he might soon be laid off as auto sales remain low across India.

He has put plans for his daughter’s wedding on hold, unsure whether he can foot the bill. He used to take a bus to work. Now he walks the five-kilometre (three-mile) distance to save a few rupees. “I don’t know which India that’s in,” he said, referring to the GDP figures. “The India I live in is struggling.”

Kumar wasn’t exaggerating – even if Shah’s prognosis turns out to be correct.

Asia’s third-largest economy is indeed growing again, and faster than most major nations. Its stock market indices, such as the Sensex and Nifty, are at levels that are significantly higher than at the start of 2021 – despite a stumble in recent weeks. But many economists are warning that these indicators, while welcome, mask a worrying challenge – some describe it as a crisis – that India confronts as it enters 2022.

November saw inflation rise by 14.23 percent, building on a pattern of double-digit increases that have hit India for several months now. Fuel and energy prices rose nearly 40 percent last month. Urban unemployment – most of the better-paying jobs are in cities – has been moving up since September and is now above 9 percent, according to the Centre for Monitoring Indian Economy, an independent think-tank. “Inflation hits the poor the most,” said Jayati Ghosh, a leading development economist at New Delhi’s Jawaharlal Nehru University.

All of this is impacting demand: Government data shows that private consumption between April and September of 2021 was 7.7 percent lower than in 2019-2020. The economic recovery from the pandemic has so far been driven by demand from well-to-do sections of Indian society, said Sabyasachi Kar, who holds the RBI Chair at the Institute of Economic Growth. “The real challenge will start in 2022,” he told Al Jazeera. “We’ll need demand from poorer sections of society to also pick up in order to sustain growth.”


Riaz Haq said...

Long #DoctorStrike over understaffing sparks chaos at #NewDelhi hospitals. While #India’s overall case count remains low, daily infections in the capital region have risen by more than 300% over the past two weeks. #OmicronInIndia #Omicron #Modi #COVID19 https://www.nytimes.com/2021/12/28/world/new-delhi-doctor-strike.html?smid=tw-share

Protests continued across the country and outside major hospitals in New Delhi on Tuesday, a day after police officers in the capital detained more than 2,500 protesting doctors who were walking toward the residence of India’s health minister.


--------
Medical students from across India have joined the protests, which intensified two weeks ago and have grown angrier after police officers were seen beating junior doctors during a march on Monday.

The New Delhi government has expressed concern over a rising number of coronavirus cases and announced new measures, including a nighttime curfew, to slow the spread of the virus. While the country’s overall case count remains low, daily infections in the capital region have risen by more than 300 percent over the past two weeks, according to the Our World in Data Project at the University of Oxford. It is unclear how many of the new cases are of the Omicron variant.

As the doctors’ strike has stretched on, drawing in recent graduates and tens of thousands of the more than 70,000 doctors who work at government medical facilities nationwide, emergency health services have been the worst hit.


Videos from major state-run hospitals in New Delhi have shown patients on stretchers lying unattended outside emergency rooms. Many Indians rely on state medical facilities for care because of the high cost of treatment at private hospitals.

The protests were triggered by delays in placing medical school graduates in jobs at government health facilities, as India’s Supreme Court considers an affirmative action policy aimed at increasing the share of positions reserved for underrepresented communities. Protesting doctors say they are not against the quotas, but want the court to expedite its decision so that graduates can begin their jobs.

During India’s catastrophic coronavirus wave earlier this year, doctors and other medical personnel found themselves short-handed and underfunded as they battled an outbreak that at its height was causing 4,000 deaths a day. Doctors associations say that more 1,500 doctors have died from Covid since the pandemic began.

Riaz Haq said...

#India was slow to identify and publicize the emergence of #DeltaVariant, setting off deadly global resurgence of #COVID19 that took millions of lives. #Modi #BJP #Hindutva #Islamophobia https://www.bloomberg.com/news/features/2021-12-29/how-delta-variant-spread-in-india-deadly-errors-inaction-covid-crisis

Unknown at the time, Amravati’s flare-ups were the first visible warning that the SARS-CoV-2 variant now known as delta had started along its devastating path. Within weeks, thousands of people flooded Amravati’s underfunded healthcare network as the city turned into Ground Zero for what would become the most confounding version of the pathogen first identified in Wuhan, China a year earlier.



Amravati was a precursor to the horrors that would grip all of India, and spread globally. As January drew to a close, Bhushan was already sensing that the city of more than 600,000 residents was becoming a petri-dish for a form of Covid-19 his team hadn’t treated before. Earlier, patients’ symptoms improved in under two weeks, but now they were battling the virus for “almost 20 to 25 days,” he said. “It was a nightmarish situation.”

Despite those first, ominous signs, what followed goes some ways toward explaining why two years into this pandemic, the world remains on the brink of economy-shattering shutdowns, with another new variant emerging out of vulnerable, under-vaccinated populations. But while South Africa acted swiftly last month to decode the heavily mutated omicron and publicize its existence, India’s experience perhaps better reflects the reality faced by most developing countries – and the risks they potentially pose.

India’s hampered response was characterized by months of inertia from the government of Prime Minister Narendra Modi, and a startling lack of resources, according to interviews with two dozen scientists, officials, diplomats and health workers. Many asked not to be identified because they aren’t authorized to speak to the media or were concerned about talking publicly about India’s missteps.



The actions India did — and didn’t take — as delta emerged, ultimately saddled its people and the world with a ruthlessly virulent incarnation of the coronavirus, one that challenged vaccines and containment regimes like none before it. Delta upended even the most successful pandemic strategies, snaking into countries like Australia and China with stringent “Covid Zero” curbs in place and effectively closed borders. It’s been the most dominant form of Covid for much of this year, when more than 3.5 million people died of the virus — almost double the toll during the first year of the pandemic.



Multiple scientists interviewed by Bloomberg News said that the way India handled the early days of delta fueled its rise. The variant’s identification was delayed because the country’s laboratories were flying blind for much of 2020 and early 2021, partly because Modi’s government had restricted imports of vital genetic sequencing compounds under a nationalistic agenda to drive self sufficiency, they said. There were repeated efforts to warn the administration about the new strain in early February, the scientists said, yet India went public with details of the more transmissible variant only at the end of March.

Riaz Haq said...

#India's staggering COVID-19 death toll could be 6 million, by far the highest #COVID19 death toll in the world -- greater than the #US at more than 811,000. #Modi #BJP #pandemic #Delta #OmicronVariant - ABC News - https://abcn.ws/30UZSLO via @ABC

Even though omicron is quickly becoming the more dominant form of Covid in the U.S. and elsewhere, quick action has bought time for scientists to decode the extent of its transmissibility and severity. South Africa identified and broadcast details of the new variant just weeks after seeing a spike in cases in one province.



By contrast, for much of 2020, India’s efforts tracking the virus were sparse, meaning the exact origin of delta still remains murky. To date, the country has only sequenced and shared 0.3% of its total official infections to the GISAID database.

India has been held back by the fact that only a handful of government laboratories and states were making consistent efforts in the first year of the pandemic to map the virus, even as millions were being infected in the country’s first wave, according to people familiar with the matter. Bhramar Mukherjee, an epidemiologist and biostatistics chair at the University of Michigan's School of Public Health, said India’s sequencing efforts were hurt by “bureaucracy, politics and a sense of exceptionalism that we have conquered Covid and there is no need to worry about variants.”

“The need to share data and samples is so key,” she said. “When South Africa started collaborating and sharing with the rest of the world, progress also increased like a process of contagion: exponentially. India is always protective of its own data.”



Inside India’s scientific agencies a lack of institutional dynamism, along with a culture of subservience to Modi’s government — highly sensitive to commentary on its handling of the virus — had taken hold, said one former official. That meant critical questions weren’t being aired by experts out of fear they’d derail their careers, the person said. In many cases, India’s health ministry simply wasn’t listening to or making decisions based on advice coming from those expert bodies, according to this official.

Attempts to ramp up sequencing in India were also critically curtailed by an inadvertent ban in May 2020 on the import of reagents, the chemical needed to fuel sequencer machines. The `Make in India’ campaign, Modi’s drive to ensure the country is less reliant on places like China, meant publicly-financed labs weren’t able to import items worth less than 2 billion rupees ($26.5 million) for months. India mostly uses sequencers manufactured by San Diego-based Illumina Inc. and the U.K.’s Oxford Nanopore Technologies Plc, which run on patented reagents that can’t be substituted locally.



Scientists in India and abroad now provide varying dates for when delta began circulating there. Samples retrospectively added to GISAID show at least one delta-linked lineage in India as far back as September last year, while the World Health Organization places its first discovery there in October.

Current and former Indian government scientists say there are often errors when manually uploading information to the database and those datelines are likely to be wrong. December 2020 is when delta was initially sequenced in India, they say. Certainly, the first person to decode the mutations wouldn’t have known its full enormity at the time since not all changes in a virus are significant. Only when you begin to see spiraling outbreaks marked by similar characteristics do you realize that a variant of concern is at play, they said. But Amravati offered the clues needed to make that connection as early as January this year.

Riaz Haq said...

#India's year 2021 ended with worse #unemployment rate than it began. The year 2021 is closing with an unemployment rate of 8.01% in Dec vs 6.52% in January, according to @_CMIE. It's worsened even before #COVID19 #OmicronVarient appeared. #Modi #BJP https://www.thenorthlines.com/year-ends-with-worse-unemployment-rate-than-it-began-with/


The year 2021 is closing with an unemployment rate of 8.01 per cent in India as against 6.52 per cent in January. It is a great cause of frustration. In January, unemployment rate in the urban area was 8.09 per cent which was up on December 30 at 9.26 per cent, and for rural areas it was up at 7.44 per cent as against only 5.81 per cent. It all indicates a great labour market distortion despite a trend in the economic recovery in both urban and rural areas.



Unemployment has worsened at a time when a new Omicron variant of COVID-19 is spreading like wildfire both in India and several other countries, enforcing lockdowns and containment measures. There is great uncertainty in the labour market, and nobody knows what will happen next, chiefly because Omicron overrides immunity from vaccination. The year 2022 is thus opening with a gloom scenario, as against 2021 which had begun with a hope after a miraculous development of vaccines and rollout from January 16. It was hoped that market conditions would improve enabling unemployed to get employment.

Unemployment rate in December 2020 was 9.06 per cent. For urban areas it was even higher at 9.15 per cent. At that time the urban unemployment rate was 8.84. All India unemployment rate then began improving with the opening of almost all sectors of economy. By March it fell to 6.50 per cent which is the lowest for this year, with urban unemployment at 7.27 per cent and rural unemployment at 6.15 per cent. However, it was worse than the unemployment rate of 6.1 per cent in the beginning of 2018, which was at 45 years high for the country.

The situation had started worsening sharply from November 2016 after Modi’s demonetisation order which forced cores of business and industrial establishments, especially MSMEs to close. Millions others struggled to survive due to shortage of cash, and millions more cut their production up to 75 per cent. Crores of people lost their jobs and by the beginning of 2018, unemployment in India was 45 year high. Unemployed were thus hit hardest in the Modi rule, which the outbreak of the COVID-19 pandemic made even worse. Lockdown order of March 24, 2020 put brake on the whole economy to a grinding halt, which began to open from June 1, 2020 in phased manner.

The country was hit by the second wave of COVID-19 in April, which necessitated further lockdowns and containment measures. Labour market suddenly deteriorated and the gains of the last three months were reversed. Unemployment rate rose to 7.97 per cent from 6.50 per cent just a month ago. Both the urban and rural areas were adversely affected and the unemployment rate rose to 9.78 and 7.13 per cent respectively.



May proved to be worst with the rise in the ferocity of the second wave. Markets were shut down and millions of establishments closed. Unemployment rate shot up to 11.84 per cent which is highest for the current year. Unemployment in the urban areas became even worse at 14.72 per cent while in the urban areas it was 10.55 per cent.

Riaz Haq said...

#India reports first death linked to #Omicron #coronavirus variant.the western state of #Rajasthan. Omicron cases in the country have now risen to 2,135, #Indian #health official told a small group of reporters in #NewDelhi. #Pandemic #BJP #Modi #Covid_19 https://www.reuters.com/world/india/india-reports-first-death-linked-omicron-coronavirus-variant-2022-01-05/

India on Wednesday reported its first COVID-19 death linked to the fast-spreading Omicron variant in the western state of Rajasthan, a federal health ministry official said.

Omicron cases in the country have now risen to 2,135, the official told a small group of reporters in New Delhi.

Riaz Haq said...

#BulliBai takes its name from a slur against #Muslim women. It was filled with profiles of dozens who were purportedly for sale. Most were #Indian, and some were high-profile figures, such as the #Pakistani #Nobel laureate #Malala Yousafzai. #Islamophobia https://www.washingtonpost.com/world/2022/01/04/india-online-auction-muslim-women/

Quratulain Rehbar, a journalist in India, found a profile of herself on a website on Saturday. The page was unauthorized, labeled her as up for “auction” and invited people to bid to own her.

The fake auction website Bulli Bai, which takes its name from a slur against Muslim women, was filled with profiles of dozens who were purportedly for sale. Most were Indian, and some were high-profile figures, such as the Nobel laureate Malala Yousafzai. Many were also opponents of Hindu nationalism who have publicly criticized Prime Minister Narendra Modi’s treatment of ethnic and religious minorities in India.

The website, which was built on the popular U.S.-based coding platform GitHub, was no longer accessible Tuesday, after a burst of online outrage against its misogyny and racism. A GitHub spokesman said in an email that it had suspended a user account that violated its policies on harassment, discrimination and the incitement of violence.


----------

The auction sites exemplify the “extreme xenophobia and misogyny used by Hindu nationalists to foster ascendancy,” said Angana Chatterji, an anthropologist specializing in Indian politics at the University of California at Berkeley.

Police in Mumbai have detained a man in connection with Bulli Bai, said Satej D. Patil, a junior minister in Maharashtra state, which is governed by a coalition including the Congress Party that sits in opposition to the BJP at the national level. He said a “large group of people who intend to disrupt … communal harmony” could be behind the website.

The operators of the fake auction websites aren’t known, but they appear to be part of a “decentralized apparatus of attacks, trolling and vilification of Muslim women,” said Gilles Verniers, a politics expert at Ashoka University in India. He added attacks on Muslims were often downplayed or tolerated by Indian leaders, many of whom are BJP members.

Riaz Haq said...

India will likely get old before it gets rich
By Mihir Sharma

https://www.livemint.com/economy/india-seems-likely-to-grow-old-before-it-can-become-wealthy-11639673192633.html

By the middle of this century, India will have 1.6 billion people. That’s when the country’s population will finally start to decline, ending up at perhaps a billion by 2100. While that is still around 250 million more people than China will have then, every time India’s population is projected, its peak seems to come earlier and crest lower. While India will be a young country for decades yet, it is ageing faster than expected. The latest round of India’s massive National Family Health Survey (NFHS) underscores the point. The average Indian woman is now likely to have only two children. That’s below the “replacement rate" of 2.1, at which the population would exactly replace itself over generations.
A few decades ago, this would have been considered miraculous in a country dismissed as a Malthusian nightmare. As modern health care became increasingly available after independence in 1947, population growth exploded—rising from 1.26% annually in the 1940s to 2% in the 1960s. Twenty years after independence, the demographer Sripati Chandrashekhar became India’s health minister and warned that “the greatest obstacle in the path of overall economic development is the alarming rate of population growth." The India in which I grew up was plastered with the inverted red triangle of the government’s family planning campaign.

As it turned out, increasing prosperity, decreases in infant mortality and—crucially—female education and empowerment achieved more than government propaganda ever could. In urban India, the fertility rate is now 1.6, according to the NFHS, equivalent to that of the US.

This is good news. But unalloyed good news is rare in India and this is no exception. The unexpected speed of the demographic transition has forced India to confront a new problem.

China-watchers have long debated whether that country will grow old before it gets rich. India now has to answer that same question, with far fewer resources at its disposal.

Draconian though China’s one-child policy was, those born under it received unprecedented attention from their families: Average education levels rose sharply, as did the quality of their nutrition. In India, by contrast, the NFHS shows that not only is child malnutrition high, it is not improving fast enough. In fact, in the five years after 2015-16, acute undernourishment actually worsened for children in most parts of India.

Meanwhile, India’s education system is clearly failing. Indian companies are already reporting a shortage of skilled manpower. That isn’t because schools aren’t turning out enough graduates. The Centre for Monitoring Indian Economy reports the unemployment rate for college graduates is 19.3%, almost three times higher than the national average. Universities just aren’t producing the kind of workers that companies feel they can employ. In some large-scale surveys, employers have said that less than half the college graduates entering the workforce have the cutting-edge skills they need or the ability to pick them up in the workplace.

Moreover, too few of these young people are trying to get into the workplace at all. Two-thirds of working-age Chinese are currently either employed or looking for a job, according to the International Labour Organization; at the beginning of the country’s high-growth spurt in the early 2000s, this labour force participation rate hit 80%. (The global average is close to 60%.) In India, by contrast, CMIE estimates that the country’s LPR stands at a mere 43% and that the pandemic has “lowered the LPR structurally" to 40%. One big reason: Just one in five Indian women work, which the World Bank has argued is linked to the social stigma of holding jobs outside the home.

Riaz Haq said...

Global Hunger Index 2021 reflects India’s reality where hunger accentuated post Covid-19: Oxfam India
India slipped to 101st position in the Global Hunger Index (GHI) of 116 countries, from its 2020 position of 94th, and is behind its neighbours Pakistan, Bangladesh and Nepal.

https://indianexpress.com/article/india/global-hunger-index-2021-india-reality-hunger-accentuated-covid-19-oxfam-india-7580110/

India’s Global Hunger Index 2021 ranking at 101st position “unfortunately” reflects the reality of the country where hunger has accentuated since the Covid-19 pandemic outbreak, Oxfam India said.

India slipped to 101st position in the Global Hunger Index (GHI) of 116 countries, from its 2020 position of 94th, and is behind its neighbours Pakistan, Bangladesh and Nepal.

Reacting sharply to the report, the Ministry of Women and Child Development had said it was “shocking” to find that the Global Hunger Report 2021 has lowered the rank of India on the basis of FAO estimate on proportion of undernourished population, which is found to be “devoid of ground reality and facts and suffers from serious methodological issues”.

Oxfam India said the GHI data which states that India dropped to the hunger-level ranks by seven spots to the 101st spot “unfortunately reflects the reality of the country where hunger accentuated since the Covid-19 pandemic.

This trend of undernutrition in India is unfortunately not new, and is actually based on the government’s own National Family Health Survey (NHFS) data.

The data shows that between 2015 and 2019, a large number of Indian states actually ended up reversing the gains made on child nutrition parameters.

This loss of nutrition should be of concern because it has intergenerational effects, to put it simply – the latest data shows that in several parts of India, children born between 2015 and 2019 are more malnourished than the previous generation, said Amitabh Behar, CEO, Oxfam India.

The Union budget this year discussed India’s POSHAN (Prime Minister’s Overarching Scheme for Holistic Nourishment) scheme with increased allocations to POSHAN 2.0.

However, the POSHAN Abhiyaan launched in 2017 to improve nutrition among children, pregnant women and lactating mothers, has languished due to poor funding resulting from clever clubbing with other schemes within the health-budget and even worse implementation.

Only 0.57 per cent of the current budget has been allocated towards funding the actual POSHAN scheme and the amount for child nutrition dropped by a whopping 18.5 per cent compared to 2020-21, Oxfam India said in a statement.

“There are massive negative consequences to not arresting high levels of malnutrition. In India, both our adult population and children are at risk. For instance, the BMI of a quarter of our (teenage and middle aged) women is below the standard global norm, more than half of our women suffer from anaemia.

A quarter of our (teenage and middle-aged) men also show signs of iron and calcium deficiencies as per the latest round of NHFS data, said Varna Sri Raman, Lead, Research and Knowledge Building at Oxfam India.

The GHI report, prepared jointly by Irish aid agency Concern Worldwide and German organisation Welt Hunger Hilfe, termed the level of hunger in India “alarming”.

Riaz Haq said...

‘It’s a total disaster’: #Omicron lays waste to #India’s huge #weddingseason. Distraught couples face prospect of cutting guest lists from more than 600 people down to just 20 after #coronavirus variant took hold. #COVID19 #pandemic #economy https://www.theguardian.com/world/2022/jan/18/its-a-total-disaster-omicron-lays-waste-to-indias-huge-wedding-season

India has enjoyed a halcyon period since June. As late as November, the capital of 20 million people was recording a mere 35-45 fresh infections a day. But with Omicron fuelling a sudden surge the government has re-imposed restrictions. India is recording around 258,000 cases daily nationally, with New Delhi recording 18,286 cases on Sunday.

Sahiba Puri, of XO Catering by Design in Delhi, understands the need for the restrictions but has no idea what to do with the cooks who have flown in from different parts of India for a pre-wedding function at the weekend.

“The bride’s family wanted to treat guests to all kinds of regional cuisines so these cooks have come and have bought so many of the ingredients. Where do they go? They are paying rent for where they are staying and other expenses,” says Puri.

With the industry staring at yet another disaster, Mishra and others plan to ask the government to relax the 20-guest rule. The Confederation of All India Traders has also written to the government asking for a relaxation.

However, given the current explosion in cases, any relaxation is unlikely. Wedding card printer Arnav Gupta says: “Everyone is so haunted by the brutal second wave that no politician is going to take any chances.”

Vashisht has decided she cannot uninvite 630 guests. She has no choice but to postpone, but planning a later date is proving impossible too. “Who knows when this wave will end? It’s only just got going. Do I tentatively look at a date in March? April? May? I mean, who knows? This limbo is killing me.”

Riaz Haq said...

Has India lost its demographic sweet spot?
N Madhavan| Updated On: Jan 20, 2022

https://www.thehindubusinessline.com/opinion/has-india-lost-its-demographic-sweet-spot/article64926406.ece

Acclaimed author and investor Ruchir Sharma, while delivering the 40th Palkhivala Memorial Lecture earlier this week, called upon Indian economists to shed their “anchoring bias” and stop talking about 8-9 per cent GDP growth which is difficult to achieve.

He blamed four trends for his view. India, he said, has lost its demographic sweet spot. The country’s working age population growth rate which was more than 2 per cent till 2010 has dropped to 1.5 per cent. He quoted his research to say that 75 per cent of the countries with economic growth of 6 per cent or more had a working age population growth in excess of 2 per cent. Most developed nations slowed down as their working age population dropped. The current population growth rate in India is not conducive for high economic growth, he warned.

Pandemic and indebtedness
The challenges created by declining demography is further accentuated by declining productivity (these two factors are the major drivers of economic growth). He argues that all the recent technological innovations have been more on the consumer experience side and they have not resulted in increasing productivity. The pandemic, he added, has pushed nations deeper into debt.

The amount of debt in the world today is 4X the size of the global economy with 25 countries having a debt/GDP ratio in excess of 300 per cent. India’s level of debt (170 per cent of GDP), while lower compared to other nations, is high when one considers its per capita income. High debt cuts productivity and smothers growth, he said.

The final trend that forced him to come out with this stark prognosis for the Indian economy is de-globalisation. Post world War-II, there was intense globalisation where flow of trade, people and capital exploded. Countries that were growing their economy in excess of 6 per cent registered exports growth of 20 per cent or more. After the global financial crisis, protectionism has increased. This has caused trade in goods and services to plateau. Capital flows have also dropped. Without strong exports, high growth rates are not possible for any country, including India.

Growth reset
He concluded by saying that for India any economic growth in excess of 5 per cent should be a great achievement. If what he says comes true, India’s ambition of becoming a higher middle income country like China (for that it needs to grow its per capita income at 8.8 per cent for the next 10 years) or a developed nation like US (it needs to grow at a rapid pace for many decades) will not happen.

The country will not be able to pull its poor out of poverty and significantly increase its per capita income which is currently a little less than $2,000 (China’s, in comparison, is in excess of $12,000).

But has Ruchir Sharma extrapolated what a slowing population growth did to developed nations to India without considering its uniqueness? That appears to be the case. While it is true that India’s total fertility rate fell to 2.0 per cent -- below the replacement rate of 2.1 per cent -- in the recent National Family Health Survey (NFHS-5), the population (according to a paper prepared by C Rangarajan, former RBI Governor, and JK Satia, Prof Emeritus, Indian Institute of Public Health) will continue to grow and will peak at 165 crore only around 2050.

The paper attributes this to population momentum arising out of a larger number of people entering reproductive age group of 15-49 compared to those leaving it. So reduction in working age population is not going to be sharp and immediate.

Riaz Haq said...

No labour shortage
Also, India is not a labour scarce country. The US saw its labour rates rise rather sharply when population growth slowed. It was forced to outsource production to China to remain competitive. While there is a mis-match between availability of labour and nature of the available jobs, India is not short of hands. This problem can be resolved, in the short run, through re-skilling programmes and in the long run through adequate investment in the education sector.

Unlike developed economies, India also has a large headroom for improvement -– be it labour participation (a large proportion of women are still outside the labour force), labour productivity (existing people can be pushed to produce a lot more), infrastructure efficiency and adoption of technology.

At the same time, the government should not ignore what Sharma is saying. It should act now and doing so will help the country to be better prepared to tackle the challenges demographic changes will bring about tomorrow.

Need for skills upgrade
There is an urgent need to map skill requirements of the future and ensure that the education system is tuned to deliver them. Mere large scale investment in education, though needed, will not be enough. Similarly, a conscious strategy needs to be devised on use of technology in a manner that it adds value and improves productivity without causing significant job losses.

The government should also eschew protectionist tendencies that has gripped the world. It should be flexible and strike preferential trade deals that are overall beneficial to India. Exports may not be as critical for India as it is for countries like China or Japan and it is unlikely to become so in the future as its economy will continue to be powered by domestic consumption. Still, exports have their benefits. It contributes to economic growth, funds imports, improves efficiency and helps to keep the current account deficit in check. Strong exports growth is a pre-requisite for a fast paced economic growth.

There is also a need for a single-minded focus on economic growth. The government should avoid all distractions, domestic or foreign, in order to achieve this. China did just that till its economy reached a significant size. It is different story that it is throwing its weight around in geo-politics today.

A growth focussed prudent economic policy will ensure that India’s investment rate which has fallen significantly since 2007-08 will bounce back. Once that happens, high growth rate will return and India will be in a position to take advantage of the demographic dividend before it is too late.

Riaz Haq said...

India's economy has some bright spots, a number of very dark stains: Raghuram RajanRajan said that one way to expand budgetary resources is through asset sales, including parts of government enterprises and surplus government land

Read more at: https://www.deccanherald.com/national/indias-economy-has-some-bright-spots-a-number-of-very-dark-stains-raghuram-rajan-1073755.html


The Indian economy has "some bright spots and a number of very dark stains" and the government should target its spending "carefully" so that there are no huge deficits, noted economist and former RBI Governor Raghuram Rajan said on Sunday. Known for his frank views, Rajan also said the government needs to do more to prevent a K-shaped recovery of the economy hit by the coronavirus pandemic. Generally, a K-shaped recovery will reflect a situation where technology and large capital firms recover at a far faster rate than small businesses and industries that have been significantly impacted by the pandemic. "My greater worry about the economy is the scarring to the middle class, the small and medium sector, and our children's minds, all of which will come into play after an initial rebound due to pent up demand. One symptom of all this is weak consumption growth, especially for mass consumption goods," Rajan told PTI in an e-mail interview.


Rajan, currently a Professor at the University of Chicago Booth School of Business, noted that as always, the economy has some bright spots and a number of very dark stains. "The bright spots are the health of large firms, the roaring business the IT and IT-enabled sectors are doing, including the emergence of unicorns in a number of areas, and the strength of some parts of the financial sector," he said. On the other hand, "dark stains" are the extent of unemployment and low buying power, especially amongst the lower middle-class, the financial stress small and medium-sized firms are experiencing, "including the very tepid credit growth, and the tragic state of our schooling". Rajan opined that Omicron is a setback, both medically and in terms of economic activity but cautioned the government on the possibility of a K-shaped economic recovery. "We need to do more to prevent a K shaped recovery, as well as a possible lowering of our medium-term growth potential," he said.

--------

Regarding the rising inflationary trends, Rajan said inflation is a concern in every country, and it would be hard for India to be an exception. According to him, announcing a credible target for the country's consolidated debt over the next five years coupled with the setting up of an independent fiscal council to opine on the quality of the budget would be very useful steps. "If these moves are seen as credible, the debt markets may be willing to accept a higher temporary deficit," he said.

Riaz Haq said...

#Modi’s #India: #Income of the poorest 20% #Indians plunged 53% in 5 yrs while the richest 20% saw their annual household income grow 39%. #Inequality #BJP #Hindutva #Covid | India News,The Indian Express

https://indianexpress.com/article/india/income-of-poorest-fifth-plunged-53-in-5-yrs-those-at-top-surged-7738426/lite/

In a trend unprecedented since economic liberalisation, the annual income of the poorest 20% of Indian households, constantly rising since 1995, plunged 53% in the pandemic year 2020-21 from their levels in 2015-16. In the same five-year period, the richest 20% saw their annual household income grow 39% reflecting the sharp contrast Covid’s economic impact has had on the bottom of the pyramid and the top.

This stark K-shaped recovery emerges in the latest round of ICE360 Survey 2021, conducted by People’s Research on India’s Consumer Economy (PRICE), a Mumbai- based think-tank.

The survey, between April and October 2021, covered 200,000 households in the first round and 42,000 households in the second round. It was spread over 120 towns and 800 villages across 100 districts.

While the pandemic brought economic activity to a standstill for at least two quarters in 2020-21 and resulted in a 7.3% contraction in GDP in 2020-21, the survey shows that the pandemic hit the urban poor most and eroded their household income.

Splitting the population across five categories based on income, the survey shows that while the poorest 20% (first quintile) witnessed the biggest erosion of 53%, the second lowest quintile (lower middle category), too, witnessed a decline in their household income of 32% in the same period. While the quantum of erosion reduced to 9% for those in the middle income category, the top two quintiles — upper middle (20%) and richest (20%)— saw their household income rise by 7% and 39% respectively.

The survey shows that the richest 20% of households have, on average, added more income per household and more pooled income as a group in the past five years than in any five-year period earlier since liberalisation. Exactly the opposite has happened for the poorest 20% of households — on average, they have never actually seen a decrease in household income since 1995. Yet, in 2021, in a huge knockout punch caused by Covid, they earned half as much as they did in 2016.


How disruptive this distress has been for those at the bottom of the pyramid is reinforced by the fact that in the previous 11-year period between 2005 and 2016, while the household income of the richest 20% grew by 34%, the poorest 20% saw their household income surge by 183% at an average annual growth rate of 9.9%.

Coming in the run-up to the Budget, the task for the Government is cut out.

“As the Finance Minister is finalising her budget proposals for 2022-23 to give shape to the roadmap for economic revival of the country,” said Rajesh Shukla, MD and CEO, PRICE, “we need a K-shaped policy too that addresses the two ends of the spectrum and a lot more thinking on how to build the bridge between the two.”

This couldn’t be more timely. Said PRICE founder and one of the authors of the survey Rama Bijapurkar. “Or else, we are back to a tale of two Indias, a narrative we thought we were rapidly getting rid of. The good news is that we have built a far more efficient welfare state for the disbursal of benefit be it DBT or vaccination for all.”

The survey showed that while the richest 20% accounted for 50.2% of the total household income in 1995, their share has jumped to 56.3% in 2021. On the other hand, the share of the poorest 20% dropped from 5.9% to 3.3% in the same period.

As for India Inc, it has been in a better position to weather the disruption. The pandemic accelerated further formalisation of the economy with large companies benefitting at the cost of smaller ones. The survey also shows that while job losses were quite evident among Small and Medium Enterprises in the casual labour segment, large companies did not witness much of that.

Riaz Haq said...

#Modi’s #India: #Income of the poorest 20% #Indians plunged 53% in 5 yrs while the richest 20% saw their annual household income grow 39%. #Inequality #BJP #Hindutva #Covid | India News,The Indian Express

https://indianexpress.com/article/india/income-of-poorest-fifth-plunged-53-in-5-yrs-those-at-top-surged-7738426/lite/

Even among the poorest 20 per cent, those in urban areas got more impacted than their rural counterparts as the first wave of Covid and the lockdown led to stringent curbs on economic activity in urban areas. This resulted in job losses and loss of income for the casual labour, petty traders household workers.

Data shows that there has been a rise in the share of poor in cities. While 90 per cent of the poorest 20 per cent in 2016, lived in rural India, that number had dropped to 70 per cent in 2021. On the other hand the share of poorest 20 per cent in urban areas has gone up from around 10 per cent to 30 per cent now.

“The data reflects that the casual labour, petty trader, household workers among others in Tier 1 and Tier 2 cities got hit most by the pandemic. During the survey we also noticed that while in rural areas people in lower middle income category (Q2) have moved to middle income category (Q3), in the urban areas the shift has been downwards from Q3 to Q2. In fact, the rise in poverty level of urban poor has pulled down the household income of the entire category down,” said Shukla.

“The elephant in the room is investment,” said Bijapurkar. “Inspiring confidence through long-term policy stability and improving ease of doing business should make the tide rise again and sweep small business and individuals up along with it. Most big companies are doing well and don’t need more help but we need to work the economy for the bottom half.”

Riaz Haq said...

#India's #jobs crisis exasperates its youth. #Economic growth is producing fewer jobs than it used to, and disheartened jobseekers instead take menial roles or look to move overseas. #BJP #economy #Modi #unemployment https://news.yahoo.com/off-canada-indias-jobs-crisis-052922928.html?soc_src=social-sh&soc_trk=tw&tsrc=twtr via @YahooNews

RAJPURA, India (Reuters) - Srijan Upadhyay supplied fried snacks to small eateries and roadside stalls in the poor eastern Indian state of Bihar before COVID-19 lockdowns forced most of his customers to close down, many without paying what they owed him.

With his business crippled, the 31-year-old IT undergraduate this month travelled to Rajpura town in Punjab state to meet with consultants who promised him a work visa for Canada. He brought along his neighbour who also wants a Canadian visa because his commerce degree has not helped him get a job.

"There are not enough jobs for us here, and whenever government vacancies come up, we hear of cheating, leaking of test papers," Upadhyay said, waiting in the lounge of Blue Line consultants. "I am sure we will get a job in Canada, whatever it is initially."

India's unemployment is estimated to have exceeded the global rate in five of the last six years, data from Mumbai-based the Centre for Monitoring Indian Economy (CMIE) and International Labour Organization show, due to an economic slowdown that was exacerbated by the pandemic.

Having peaked at 23.5% in April 2020, India's joblessness rate dropped to 7.9% last month, according to CMIE.

The rate in Canada fell to a multi-month-low of 5.9% in December, while the OECD group of mostly rich countries reported a sixth straight month of decline in October, with countries including the United States suffering labour shortages as economic activity picks up.

Graphic: Unemployment Rate- https://graphics.reuters.com/INDIA-UNEMPLOYMENT/INDIA/zjvqknbzxvx/chart.png

What's worse for India, its economic growth is producing fewer jobs than it used to, and as disheartened jobseekers instead take menial roles or look to move overseas, the country's already low rate of workforce participation - those aged 15 and above in work or looking for it - is falling.

"The situation is worse than what the unemployment rate shows," CMIE Managing Director Mahesh Vyas told Reuters. "The unemployment rate only measures the proportion who do not find jobs of those who are actively seeking jobs. The problem is the proportion seeking jobs itself is shrinking."

Graphic: Labour participation rate (LPR)- https://graphics.reuters.com/INDIA-UNEMPLOYMENT/INDIA-UNEMPLOYMENT/jnvwejnnlvw/chart.png


Critics say such hopelessness among India's youth is one of the biggest failures of Prime Minister Narendra Modi, who first came to power in 2014 with his as yet unfulfilled promise of creating millions of jobs.

It also risks India wasting its demographic advantage of having more than two-thirds of its 1.35 billion people of working age https://data.oecd.org/pop/working-age-population.htm.

The ministries of labour and finance did not respond to requests for comment. The labour ministry's career website had more than 13 million active jobseekers as of last month, with only 220,000 vacancies.

The ministry told parliament in December that "employment generation coupled with improving employability is the priority of the government", highlighting its focus on small businesses.

Modi's rivals are now trying to tap into the crisis ahead of elections in five states, including Punjab and most populous Uttar Pradesh, in February and March.

"Because of a lack of employment opportunities here, every kid looks at Canada. Parents hope to somehow send their kids to Canada," Delhi Chief Minister Arvind Kejriwal, whose Aam Admi Party is a front-runner in Punjab elections, told a recent public function there.

Riaz Haq said...

#India #Schools Stay Closed, and Hopes Fade for a Lost Generation Amid #COVID19. Children have forgotten the alphabet or what classrooms look like. Others have dropped out of school entirely, scrounging for work and unlikely to ever resume their studies. https://www.nytimes.com/2022/01/27/world/asia/india-schools.html?smid=tw-share

For years, India has been counting on its vast pool of young people as a wellspring of future growth, a “demographic dividend,” as many liked to put it. Now, after two years of the coronavirus pandemic, it is looking more like a lost generation, crushing the middle-class dreams of families looking for better opportunities for their children.

Hundreds of millions of students across India have received little to no in-person instruction with schools intermittently shut down since the start of the pandemic. As pandemic restrictions are lifted, then reimposed, schools are often the first places to close and the last to reopen.

Mahesh Davar, a farmhand in central India, is pained to see his young sons working beside him. He and his wife toiled in the fields to send their boys, now 12 and 14, to school, hoping it would secure them better jobs and easier lives.

Their education effectively ended almost two years ago, when schools shifted online; the family lacked the money for internet access. Around the globe, more than 120 million children have faced the same situation, according to the United Nations.

“Poor people like us fight every day to keep the stove burning,” Mr. Davar said. “Tell me how and where we will afford the money for mobile phones?”

Until the pandemic, India was pulling millions of people out of poverty, pinning its hopes of greater economic growth on education. That building block for the future is now eroding, threatening to upend India’s hard-fought progress and condemn another generation to manual, off-the-books labor.

“In India, the numbers are mind-numbing,” said Poonam Mattreja, head of the Population Foundation, an advocacy group in New Delhi. “Gender and other inequalities are widening, and we’ll have much more of a development deficit in the years to come.”

Riaz Haq said...

#India #Jobs Crisis: At least 10 million applicants were hoping to get the roughly 40,000 jobs. Jobless mob set fire to #Indian #Railway trains. #RailwaysProtest #BJP #Modi #Bihar #UP #Hindutva #Islamophobia #unemployed #Unemployment https://www.hindustantimes.com/india-news/protests-over-railway-jobs-are-a-grim-reminder-of-the-state-of-india-s-job-market-101643308438421.html


The protests over problems with recruitment for railway jobs in the states of Bihar and Uttar Pradesh, may well be India’s first large-scale unemployment riots. The protests have taken place across a large number of places in these two states. News reports suggest that at least 10 million applicants were hoping to get the roughly 40,000 jobs which were on offer. The politics on the protests notwithstanding – opposition parties have attacked the ruling Bharatiya Janata Party (BJP) over both the issue and police’s handling of it – they ought to be treated as a bellwether for the socio-economic unrest which India’s job markets can generate. Here are four charts which put this in perspective.

India has among the worst labour market outcomes for young people

An international comparison of some of India’s peers and neighbours using World Bank data shows that India has among the worst labour market outcomes for the young (the 15-24-year-old population). This can be seen in persistence of high youth unemployment rates despite a very low labour force participation rate (LPFR) among this cohort. LPFR is defined as the share of economically active population – either working or looking for a job – in the given age group. This number was just 27.1% for the 15-24-year-old population in India, which is significantly lower than other countries. Despite such a low LFPR, youth unemployment rate is among the highest in India. Unemployment rate is defined as the share of unemployed persons in the labour force. A time-series analysis shows that things have become worse on this front in India in the last 15 years.


Riaz Haq said...

How long does it take to earn the money to buy an Apple iPhone 12?

Based on minimum wage levels, a new report from Grover.com estimates it would take 6,639 hours for a Venezuelan to earn enough for the prized smartphone and 3,254 hours for an Indian. Chinese people must work 680 hours to make enough money.

1642 Hours in Pakistan
1791 Hours in Indonesia
3254 Hours in India
2045 Hours in Egypt

Need-to-Know Research

https://www.bloomberg.com/news/newsletters/2022-02-04/what-s-happening-in-the-world-economy-biden-raids-reagan-playbook-for-rebrand


https://twitter.com/economics/status/1490386589578575876?s=20&t=-tQYKZSMasGzZFpZB31SHQ


Minimum Monthly Wage levels in selected countries:

Pakistan: $491

Nepal: $396

Vietnam: $388

China: $353

Afghanistan: $306

Sri Lanka: $247

India: $215

Solomon Islands: $213

Bangladesh: $48


https://www.tbsnews.net/economy/bangladeshs-monthly-minimum-wage-lowest-asia-pacific-region-ilo-166438

Riaz Haq said...

A stark statistic: the income of 1/5th of India‘s population has plunged a staggering 53% in the last 5 years. While the wealth of top 100 Indians has soared to Rs 57 lakh crores.

https://youtu.be/xPIPejVpvjY


4.6 crore Indians have slipped into extreme poverty.

What does such inequity say about India? And is the government doing enough to design a pathway out of it?

Provocative. Animated. Incensed. Economist RATHIN ROY — former member of PM’s economic advisory council, and managing director of ODI — lays bare the faultlines in the economy, the Budget, and the principles & priorities driving India’s economic thinking.

“For the first time in India’s independent history, there is no professional mid or long term economic plan,” says he.

So what would he do if he was in the driving seat?

------------

#India’s #economic distress threatens #BJP’s dominance in state elections. India suffered a 7.3% economic contraction in the first year of the #pandemic, with tens of millions of people falling out of the #middleclass and into #poverty. | Financial Times

https://www.ft.com/content/8b5056d3-141b-491d-a715-e810f53fe40e

Riaz Haq said...

Millions of #Indian workers fled to villages amid #COVID #pandemic. Number of people working in #manufacturing fell by half over 4 years ending in March 2021. Around 75 million people in #India slipped into extreme #poverty. #Modi #unemployment https://www.wsj.com/articles/indias-economy-hinges-on-the-return-of-workers-who-fled-to-their-villages-11644777177?st=ipnsr42dt1cnv0k&reflink=desktopwebshare_twitter via @WSJ

The nationwide lockdown in 2020 set off the biggest wave of migration since India gained independence in 1947. In the first months of the pandemic, workers traveled hundreds of miles by train, bus, bicycle and even on foot.

While some returned to the cities at various points during the pandemic, another deadly Covid-19 surge last spring, and the most recent spike, have caused further uncertainty among workers about the costs of urban life.

Economists calculate that around 32 million people took up agricultural work in the year that ended on June 30, 2020, an estimate based on government data. That continued last year, according to the Centre for Monitoring Indian Economy Pvt., CMIE, an independent think tank in Mumbai. The share of agriculture in total employment in the year ended June 30, 2021, rose 1.4 percentage point from a year earlier, according to its data.

Some economists believe workers will return en masse after the pandemic subsides. “Agriculture can’t support so many people for so long,” said Sachchidanand Shukla, chief economist at the Mahindra Group, a conglomerate that includes businesses in information technology and vehicle manufacturing.

Mr. Nayal, the former call-center worker, isn’t sure of that. He lives in Satbunga, a village of about 1,400 people who live and work on land spread across mountain slopes.

The village head, Priyanka Bisht, estimated about 250 mostly men left for jobs in the city over the past five years. Most have returned, she said, bringing new skills and experience that benefit Satbunga. Ms. Bisht said she believed most prefer to stay, but added, “Let’s wait and watch how it turns out.”

---------

The number of people working in manufacturing has fallen by half over the four years that ended in March 2021, according to an analysis by Ashoka University’s Centre for Economic Data and Analysis based on CMIE data. “The decade that just went by, it can be called a decade of job loss,” said Kunal Kumar Kundu, an India economist at French bank Société Générale SA . “That is disastrous for an economy.”

India’s Finance Minister Nirmala Sitharaman said a recently announced government program to boost domestic manufacturing will create millions of jobs.

About half of India’s working-age population is employed or seeking work, one of the world’s lowest labor-force participation rates, according to the ILO. Adding to the job squeeze, an estimated four million-plus young people join the workforce each year.

Riaz Haq said...

State of
Global Hiring
Report 2021

https://f.hubspotusercontent30.net/hubfs/19498232/State%20of%20hiring%20report%202021/State%20of%20Hiring%20Report%202021.pdf

Salaries are rising fastest in 
 Mexico (57%), Canada (38%), 
 Pakistan (27%), and Argentina (21%) 
 for jobs in marketing, sales, and product.

India 8%, Philippines 7% & Russia 4%

----------------

Top three countries where people hired through Deel were located:

1.Philippines 2. India 3. Pakistan

---------------

Top 3 roles hired through deel:

1. Software engineer 2. Virtual assistant 3. Custom Support Executive


------

State of Global Hiring
Report 2021


Global hiring has never been more popular
between pandemic-related office closures,
fierce talent competition, and a bevy of online
tools enabling collaboration and reducing
hiring complications. But where is it popular,
and for what roles? What countries are hiring
more than ever, and from where? What’s
happening to wages as demand increases?

Using data pulled from more than 100,000 work contracts from 

over 150 countries, along with 500,000 third-party data points, 

a new report from global hiring and payroll company Deel gives a
breakdown of what’s happening within the global job landscape.
Trends are tracked over six months—from July 2021 through December 2021.

Riaz Haq said...

#Mumbai #FII Exodus: Foreign investors selling #Indian shares at a rate of $1 billion a day as #India's stocks plummet. Pace picks up after a record $2.9 billion withdrawn last week. #Modi #BJP #Hindutva #economy #Russia #Ukraine https://www.bloomberg.com/news/articles/2022-03-10/a-billion-dollars-a-day-global-funds-keep-selling-india-stocks

India’s $3.2 trillion stock market is witnessing an unprecedented foreign selloff as the surge in oil prices fuels worries of an inflation shock in the major energy-importing nation.

While global funds have been net sellers of local equities since the start of October, when the benchmark S&P BSE Sensex hit an all-time high, the pace of outflows has intensified since the start of the war in Ukraine. India relies on imports to meet about 85% of its oil needs.

Riaz Haq said...

#Unemployment Crisis in #Modi's #India: This burning train is a symbol of the anger of India's out-of-work youth. #Indian #economy has slowed down since 2010. Consequently, the pace of #job creation has been on a steady decline since 2011. #BJP #Hindutva https://www.npr.org/sections/goatsandsoda/2022/03/16/1084139074/this-burning-train-is-a-symbol-of-the-anger-of-indias-out-of-work-youth?utm_campaign=storyshare&utm_source=twitter.com&utm_medium=social

This high unemployment rate among the college educated has caused what the World Economic Forum calls "widespread youth disillusionment," claiming it's a threat to India's economic stability – and is part of a growing crisis in India's job market. Those who work in the so-called "informal sector" – jobs in construction or agricultural labor with no guarantee of work or a wage from day-to-day, have long had difficulty supporting themselves and their families. And now, even education is no longer a guarantee of a job. Many educated workers complain of a lack of job security, employment benefits and salaries that often fail to meet minimum wage requirements.



--------------

Indian economy has slowed down since 2010, according to former chief economic adviser to the Government of India Arvind Subramanian. Consequently, the pace of job creation has been on a steady decline since 2011.

In 2014, India elected the Hindu nationalist leader of the Bharatiya Janata Party (BJP), Narendra Modi, who promised to create 100 million jobs by 2022. His administration launched campaigns like Make In India, Startup India and Skill India, intended to encourage investment across sectors and aimed at both those with education degrees and workers in the informal sector.

But there was a massive impact on employment opportunities after Modi's announcement in November 2016 that he was taking 86% of India's paper money out of circulation — part of a demonetization policy that aimed to tamp corruption. According to a 2019 study by scholars at Azim Premji University, 5 million people lost jobs due to major shocks to the economy from this policy.

Then came the pandemic. Less than five years after demonetization, COVID-19 struck, adversely affecting most sectors of the economy and pushing up the rate of unemployment up to 20% in June 2020. Since then, the rate has dropped to around 8% for India overall, which still means a massive number of unemployed in a population of 1.4 billion.

Sarvesh Dhobi has moved about 1,000 miles east from his hometown in Surat to study in a coaching center in Prayagraj. He'd like to land a job in media and communications – but is not hopeful. "We are traditionally launderers, my father has a laundry business," he says. "I might have to go back home and lend a hand in that."

And Gautam notes that there are unforeseen consequences to being one of India's many unemployed young people.

"My family pressures me to get married, but who will marry an unemployed man?" he asks.

Riaz Haq said...

#India's 2022 #GDP Growth Cut to 4.6% Due to #Ukraine War. India will face restraints on several fronts: #energy access & prices, primary commodity bottlenecks, reflexes from #trade sanctions, #food #inflation, tightening policies & financial instability.
https://thewire.in/economy/indias-2022-gdp-growth-downgraded-to-4-6-due-to-ukraine-war-un-report


United Nations: India’s projected economic growth for 2022 has been downgraded by over 2% to 4.6% by the United Nations, a decrease attributed to the ongoing war in Ukraine, with New Delhi expected to face restraints on energy access and prices, reflexes from trade sanctions, food inflation, tightening policies and financial instability, according to a UN report released on Thursday.

The UN Conference on Trade and Development (UNCTAD) report downgraded its global economic growth projection for 2022 to 2.6% from 3.6% due to shocks from the Ukraine war and changes in macroeconomic policies that put developing countries particularly at risk.

The report said while Russia will experience a deep recession this year, significant slowdowns in growth are expected in parts of Western Europe and Central, South and South-East Asia.

India was forecast to grow at 6.7% in 2022 and this projection has been downgraded to 4.6% by UNCTAD.

The report said as some of the other economies in South and Western Asia may gain some benefits from fast growth of demand and prices of energy, they will be hampered by the adversities in primary commodity markets, especially food inflation, and will be further hit by inherent financial instabilities.



India in particular will face restraints on several fronts: energy access and prices, primary commodity bottlenecks, reflexes from trade sanctions, food inflation, tightening policies and financial instability, it said.

The report has downgraded the GDP growth of the US from 3% to 2.4%. China will also see growth decrease to 4.8% from 5.7%. The report projects a deep recession for Russia, with growth decelerating from 2.3% to -7.3%.

The report said the Russian economy faces stringent external constraints imposed by the sanctions.

While Russia is still exporting oil and gas, and will therefore see compensating increases of revenue due to high prices, sanctions severely limit the use of foreign exchange earnings for the purchase of imports or debt servicing.

Russia will experience severe shortages of a wide range of imported goods, high inflation and a substantially devalued currency. While the state will likely act to cushion the shock and limit unemployment and the fall of household incomes, its capacity is limited.

Trade with China and some other partners will continue, but they will not be able to provide substitutes for the wide range of imported goods that the Russian Federation currently cannot access. Assuming the sanctions remain in place through 2022, even if the fighting in Ukraine ends, Russia will experience a severe recession, it said.

The report noted that a number of developing country central banks also engaged in quantitative easing: active purchasing of bonds in the open market.

A small number of developing country central banks engaged in private sector bond purchases, but public bond buying was more widespread: the central banks of India, Thailand, Colombia and South Africa, among others, engaged in public bond purchases.

In the global monetary hierarchy, the place of a national currency today is determined less by the size of its domestic production base than by the size of its domestic financial sector.

The currencies of Brazil, Russia, India and China account for no more than 3.5% of the $6.6 trillion daily turnover in the forex markets, a ratio barely one-tenth of the United States dollar’s 44%, it said.

UNCTAD said the ongoing war in Ukraine is likely to reinforce the monetary tightening trend in advanced countries following similar moves that began in late 2021 in several developing countries due to inflationary pressures, with expenditure cuts also anticipated in upcoming budgets.

Riaz Haq said...

A 2-day nationwide strike in #India called by hundreds of thousands of workers to protest #Modi gov't #economic policies has spared no corner of India. supporters are blocking roads, train tracks & public transportation absent from streets. #privatization https://www.nytimes.com/2022/03/28/world/asia/india-modi-general-strike.html?smid=tw-share


The government of Prime Minister Narendra Modi has made a strong pitch for the privatization of some state-owned assets that it characterizes as underperforming. Government-backed financial institutions are protesting a federal move to privatize them and also protesting a bill that is expected to reduce the minimum government holding in public sector banks from 51 percent down to 26 percent.

With bank unions joining the strike, the State Bank of India, a government institution, warned its customers that banking services were likely to be affected Monday and Tuesday.

--------

As Indian authorities raced to roll out contingency plans to deal with the strike, the country’s federal power ministry directed all publicly run electricity companies to be on high alert to ensure that hospitals, defense installations and railways continue to be supplied with power.

The shutdown, which began early Monday, was called by dozens of labor unions representing workers from both public and private sectors. Union leaders said the protests were aimed at a variety of government policies that they said harmed workers, farmers and Indians in general. They also said they were demanding an immediate scrapping of a new labor law that allows contract work, gives employers greater leeway in setting wages and increases working hours.

“The present government is anti-workers and against poor people,” said Arthanari Soundararajan, an opposition politician from Communist Party of India (Marxist) in the state of Tamil Nadu.

----------


“They are selling railways, airports, ports, oil industry and gas refineries and our power transmission sector, there is nothing left,” Mr. Saxena said. “Whatever our forefathers have built in this country is being now sold to big corporate and private entrepreneurs.”

Riaz Haq said...

Pakistan’s economy created 5.5 million jobs during the past three years –on an average 1.84 million jobs a year, which is far higher than yearly average of creation of new jobs during the 2008-18 decade, reveals findings of Labour Force Survey (LFS) published by the Pakistan Bureau of Statistics (PBS).


https://tribune.com.pk/story/2350416/employment-boom-in-last-3-years


In terms of sector, the share of agriculture sector in total employment went down from 38.5% from three years ago to 37.4%. But the share of the industrial sector increased from 23.7% to 25.4%. The services sector share in employment also decreased from nearly 38% to 37.2%.

In absolute terms, during the past three years about 2.5 million jobs were created in the industrial sector compared with 2.1 million created during the five-year PML-N tenure. Another 1.4 million jobs were created in the agriculture sector and 1.7 million in the services sector. During the PML-N tenure around 4.3 million jobs had been created in the services sector.

-------

the Sindh province remained an exception where unemployment rate significantly went down to just 3.9% in three years as the unemployment rate increased in all other three provinces –the highest one recorded at 8.8% in Khyber Pakhtunkhwa (K-P) during the last fiscal year, according to Labour Force Survey 2020-21.

The national unemployment rate stood at 6.3% at the end of the last fiscal year, which is better than the preceding year but higher than 5.8% recorded at the end of the PML-N tenure, according to the survey conducted by the Pakistan Bureau of Statistics. The Planning Ministry and the PBS have not yet officially released the survey.

The survey findings were endorsed on Wednesday by a technical committee, comprising official and independent experts, according to the officials of the Ministry of Planning and Development. The PBS covered 6,808 enumeration blocks and 99,904 households for the survey purposes.

The findings showed that the number of employed people increased to 67.3 million by June 2021 –up from 61.7 million at the end of the PML-N tenure.

However, the official unemployment rate that in June 2018 was 5.8% went up to 6.3% at the end of the third year of the PTI rule. The unemployment rate was the lowest in Sindh at 3.9% that is ruled by the Pakistan Peoples Party but it was highest in Khyber Pakhtunkhwa at 8.8%, followed by 6.8% in Punjab –the two provinces governed by the ruling party.


A key reason for an overall low unemployment rate of 6.3% was inclusion of contributing family workers in the definition of the employed people whose share in total employment was above one-fifth. The share of employers remained unchanged at 1.4% in three years. The employees also went down from 42.4% to 42% in three years but own-account workers' share went up to 35.5%, according to the survey.

During 2018-23, on an average 1.84 million jobs a year were created –far better than the yearly average recorded during the Pakistan Muslim League Nawaz and the PPP governments, according to the survey’s findings.

During the five year of the PPP (2008-13), about 6.9 million jobs had been created with a yearly average of 1.4 million. Compared to this, during the PML-N 2013-18’s tenure, about 5.7 million jobs had been created with an average of 1.14 million a year.

The average economic growth rate during the PML-N five years rule was significantly higher than the average growth rate during the PTI tenure. For the first time in the past 70 years, the country had also witnessed 1% contraction in the Gross Domestic Product during the fiscal year 2019-20 when the world was struck by the global pandemic.

The survey findings revealed that the sectoral contributions in job creation were uneven and the majority of the new jobs had been created in the industrial sector.

Prime Minister Imran Khan had promised to create 10 million jobs during his government tenure and the creation of 5.5 million jobs suggested that the economy might generate a total 9 million jobs by 2023 at the current rate.

Riaz Haq said...

Why #Citibank left #India. Some experts have blamed Indian #banking’s bad-loan crisis. Citi, which has been present in India for over a century, is not the first foreign bank to exit or scale down operations. #Modi #economy #BJP #Hindutva https://qz.com/india/2148597/ via @qzindia

Almost immediately after Citigroup’s announced its decision last year, FirstRand Bank, too, followed suit. South Africa‘s second-largest bank has $118 billion in assets in India.

Barclays, HSBC and Bank of America-Merrill Lynch, too, have downsized due to high capital requirements and costs.

Foreign banks have been struggling due to increased competition from domestic players, differences in compliance guidelines, and poor asset quality issues, among other reasons.

Some experts have blamed Indian banking’s bad-loan crisis.


“We believe our capital, investment dollars, and other resources are better deployed against higher returning opportunities in wealth management and our institutional businesses in Asia,” Citigroup’s global CEO Jane Fraser had said last year.

In 2013, RBI had announced guidelines for foreign banks, asking them to either operate through branch presence or set up wholly-owned subsidiaries to be treated at par with Indian banks. While the business models of some banks did not allow the subsidiary route, only a few got licences to open fresh branches.

Some have survived, though.

Riaz Haq said...

#India #Electricity Crisis Worst Since Oct 2021: Many northern states suffered hours-long power outages in October, when a crippling #coal shortage caused the worst electricity deficit in nearly five years. #EnergyCrisis #BJP #Modi #economy #unemployment https://www.hindustantimes.com/india-news/indias-march-electricity-shortage-worst-since-coal-crisis-in-october-101648747688690.html

The western state of Gujarat, one of the country's most industrialized, has ordered a staggered shutdown of "non-continuous process" industries in key cities next week, according to a government note reviewed by Reuters.


India's electricity shortage from March 1 to March 30 was its worst since October, a Reuters analysis of government data shows.

A surge in power demand in March has forced India to cut coal supplies to the non-power sector and put on hold plans for some fuel auctions for utilities without supply deals due to a slump in inventories.

Many northern states suffered hours-long power outages in October, when a crippling coal shortage caused the worst electricity deficit in nearly five years.

Shortages in the eastern state of Jharkhand and Uttarakhand in the north surpassed those of October, the latest data showed.

The western state of Gujarat, one of the country's most industrialised, has ordered a staggered shutdown of "non-continuous process" industries in key cities next week, according to a government note reviewed by Reuters.

A Gujarat energy department official said the move was due to power shortages and to facilitate continuous power supply to farmers, adding a similar strategy was last used in 2010. He declined to comment on how long the staggered shutdown will be in place.

The official declined to be named as he was not authorised to speak to the media.

The southern state of Andhra Pradesh and the tourist resort state of Goa, which registered marginal shortages in October, suffered deficits several times larger in March.

The deficit in March was 574 million kilowatt-hours, a measure that multiplies power level by duration, a Reuters analysis of data from federal grid regulator POSOCO showed.

That amounted to 0.5% of overall demand for the period, or half the deficit of 1% in October.

The northern states of Haryana, Rajasthan and Punjab and the eastern state of Bihar, some parts of which suffered widespread outages in October, accounted for most of the deficit in March, but shortfalls were lower, the data showed.

Riaz Haq said...

#India more than doubles price of locally produced #gas.The price of gas from regulated fields of state-owned ONGC and Oil India Ltd will rise to a record $6.10 per million British thermal unit from the current $2.90. #Energy #Economy #BJP #Modi https://www.livemint.com/industry/energy/india-more-than-doubles-domestic-natural-gas-price-to-6-1-mmbtu-for-6-months-beginning-1-april-11648729140812.html

The Central Government on Thursday more than doubled the price of domestically produced natural gas for the six months beginning tomorrow (1 April), reflecting a surge in global prices.

The Petroleum Planning and Analysis Cell of the federal oil ministry announced the new prices today.

This will raise the prices of gas sold to households, the power sector, industries and fertiliser firms, adding to overall inflation.

As per a notification issued by the oil ministry's PPAC, the price of gas from regulated fields of state-owned Oil and Natural Gas Corp Ltd and Oil India Ltd will rise to a record $6.10 per million British thermal unit from the current $2.90.

The rate paid for difficult fields like deepwater will rise to $9.92 for April-September from $6.13 per mmBtu, the notification stated.

India links prices of locally produced gas from old fields to a formula tied to global benchmarks, including Henry Hub, Alberta gas, NBP and Russian gas.

High natural gas prices will boost earnings of producer ONGC, Oil India Ltd and Reliance Industries.

India's annual retail inflation exceeded 6% for the second consecutive month in February.

Riaz Haq said...

India's jobless rate falls to 7.6% in March from 8.1% a month earlier: CMIE
Unemployment rate in the country is decreasing with the economy slowly returning to normal, according to CMIE data.

https://www.business-standard.com/article/current-affairs/india-s-unemployment-rate-falls-to-7-6-in-march-from-8-10-in-feb-cmie-122040300533_1.html


Haryana's unemployment rate the highest in India, shows analysis
India's unemployment rate falls to 6.57%, lowest since March 2021: CMIE
Households have not recovered
Employment and the government
Unemployment falls in UP, on the rise in Punjab and Goa, shows data


Unemployment rate in the country is decreasing with the economy slowly returning to normal, according to CMIE data.

The Centre for Monitoring Indian Economy's monthly time series data revealed that the overall unemployment rate in India was 8.10 per cent in February 2022, which fell to 7.6 per cent in March.


On April 2, the ratio further dropped to 7.5 per cent, with urban unemployment rate at 8.5 per cent and rural at 7.1 per cent.

Retired professor of economics at Indian Statistical Institute Abhirup Sarkar said that though the overall unemployment rate is falling, it is still high for a "poor" country like India.

The decrease in the ratio shows that the economy is getting back on track after being hit by COVID-19 for two years, he said.

"But still, this unemployment rate is high for India which is a poor country. Poor people, particularly in rural areas, cannot afford to remain unemployed, for which they are taking up any job which comes in their way," Sarkar said.

According to the data, Haryana recorded the highest unemployment rate in March at 26.7 per cent, followed by Rajasthan and Jammu and Kashmir at 25 per cent each, Bihar at 14.4 per cent, Tripura at 14.1 per cent and West Bengal at 5.6 per cent.

In April 2021, the overall unemployment rate was 7.97 per cent and shot up to 11.84 per cent in May last year.

Karnataka and Gujarat registered the least unemployment rate at 1.8.per cent each in March, 2022.

Riaz Haq said...

India's labour force shrinks by 3.8 million in March, lowest in eight months
SECTIONSIndia's labour force shrinks by 3.8 million in March, lowest in eight monthsBy Yogima Seth Sharma, ET BureauLast Updated: Apr 14, 2022, 06:18 PM IST

https://economictimes.indiatimes.com/jobs/indias-labour-force-shrinks-by-3-8-million-in-march-lowest-in-eight-months/articleshow/90844094.cms

India’s labour force shrunk by 3.8 million during March 2022 to 428 million, the lowest in eight months since July 2021 with both employment and unemployment falling last month which is the biggest sign of economic distress, the Centre for Monitoring Indian Economy said.

According to CMIE, employment shrunk by 1.4 million to 396 million in March 2022 while the count of the unemployed fell by 2.4 million in March 2022. This resulted in a decline in the employment rate from 36.7% in February 2022 to 36.5% in March while the unemployment rate fell to 7.6% from 8.1% in February.


Riaz Haq said...

The unemployment rate fell in March 2022 to 7.6 per cent from 8.1 per cent in February. The good news on the labour markets front in March 2022 stops here. All the other data point to worsening labour market conditions in March 2022.



https://www.cmie.com/kommon/bin/sr.php?kall=warticle&dt=20220411125651&msec=416





The labour participation rate (LPR) fell to 39.5 per cent in March 2022. This was lower than the 39.9 per cent participation rate recorded in February. It is also lower than during the second wave of Covid-19 in April-June 2021. The lowest the labour participation rate had fallen to in the second wave was in June 2021 when it fell to 39.6 per cent. The average LPR during April-June 2021 was 40 per cent. March 2022, with no Covid-19 wave and with much lesser restrictions on mobility, has reported a worse LPR of 39.5 per cent.

The labour force shrunk by 3.8 million during March 2022 to 428 million. This is the lowest labour force in eight months, i.e. since July 2021. Employment shrunk by 1.4 million to 396 million in March 2022, which was the lowest level since June 2021. The count of the unemployed fell by 2.4 million in March 2022. This is what caused the fall in the unemployment rate. But, the fall in the absolute count of unemployed or the unemployment rate is not because more people got employed. We have already noted that employment actually fell in March, by a substantial 1.4 million.

What the labour market statistics of March 2022 show is India’s biggest sign of economic distress. Millions left the labour markets they stopped even looking for employment, possibly too disappointed with their failure to get a job and under the belief that there were no jobs available.

This is not the first time that India has seen a fall in the labour force in a month wherein both its constituents the employed and the unemployed have fallen simultaneously. Some of this phenomenon occurring during a month could be a reflection of short-term labour market variations, or even sampling variations. What stands out this time is that the labour force and both its constituents shrunk during a larger period of the quarter of March 2022. This is for the first time in over three years, i.e. since the quarter of June 2018 that we have seen such a decline in the labour force.

The decline in the LPR reflects the inadequacy of the growth in employment opportunities. This is because LPR compares the labour force with the working age population. The working age population continues to grow and if job opportunities do not grow in tandem, then the LPR falls. But, a decline in the labour force in absolute terms reflects a shrinkage in employment opportunities in absolute terms.

The matter gets worse when we dwell into the source of fall in employment.The composition of the 1.4 million fall in employment in March 2022 reveals a much bigger problem on the employment front. Non-agricultural jobs fell by a whopping 16.7 million. This was offset by a 15.3 million increase in employment in agriculture. Such a large increase in employment in agriculture is likely a seasonal demand for workers preparing for the rabi harvest. But, March is a tad too early for the rabi harvest. It is possible that a significant portion of the increase in employment in agriculture in March was disguised unemployment.

The fall in non-agricultural jobs in March is large and therefore worrisome.

Industrial jobs fell by 7.6 million in March 2022. The manufacturing sector shed 4.1 million jobs, the construction sector shed 2.9 million and mines shed 1.1 million jobs. Utilities saw a small increase. Manufacturing industries that reported a fall in jobs were the large organised sectors cement and metals.

Riaz Haq said...

RSS stresses on 'Bharat-centric' job models to tackle unemployment
The Rashtriya Swayamsevak Sangh (RSS) has called for "Bharat-centric" models of employment generation to strengthen the economy and achieve sustainable and holistic development

https://www.business-standard.com/article/current-affairs/rss-stresses-on-bharat-centric-job-models-to-tackle-unemployment-122031400447_1.html

The Rashtriya Swayamsevak Sangh (RSS) has called for "Bharat-centric" models of employment generation to strengthen the economy and achieve sustainable and holistic development.

In the wake of several youth in the country facing unemployment, the Akhil Bharatiya Pratinidhi Sabha (ABPS), the top decision-making body of the RSS, passed a resolution on Sunday to promote work opportunities to make the country self-reliant.


In the resolution, the ABPS said it wishes to emphasise that the entire society has to play a proactive role in harnessing work opportunities to mitigate the overall employment challenge.

"As we have experienced the impact of the recent COVID-19 pandemic on employment and livelihood, we have also witnessed opening up of new opportunities of which some sections of the society have taken benefit," it said.

The ABPS is of the opinion that thrust is to be given to "Bharatiya economic model" that is human-centric, labour intensive, eco-friendly and lays stress on decentralisation and equitable distribution of benefits and augments village economy, micro scale, small scale and agro-based industries, the resolution said.

"The ABPS calls upon citizens to work on Bharat-centric models of employment generation to strengthen the economy and achieve sustainable and holistic development," it said.

The three-day meeting of the ABPS concluded at Pirana on the outskirts of Ahmedabad on Sunday.

According to the resolution, the areas like rural employability, unorganised sector employment, jobs to women and their overall participation in the economy need to be boosted. Efforts are essential to adapt new technologies and soft skills appropriate to the societal conditions, it said.

"Our manufacturing sector, that has high employment potential, requires to be bolstered, which can also lessen our dependence on imports," it said.

The resolution also said that an environment conducive of encouraging entrepreneurship should be created by educating and counselling people, especially youth, so that they can come out of the mentality of seeking jobs only.

Similar entrepreneurial spirit also needs to be fostered among women, village folk and people from remote and tribal areas, it said.

"The ABPS feels that we, as a society, look for innovative ways to address the challenges of fast changing global economic and technological scenario. Opportunities of employment and entrepreneurship with emerging digital economy and export possibilities should be keenly explored," the RSS resolution said.

"We should engage ourselves in manpower training both pre and on job, research and technology innovations, motivation for start ups and green technology ventures," it said.

Riaz Haq said...

Medium Small and Micro Enterprises (SMEs) have always been the backbone of an economy in general and secondary sector in particular. For a capital scarce developing country like India, SMEs are considered as panacea for several economic woes like unemployment, poverty, income inequalities and regional imbalances.

https://www.mbarendezvous.com/more/msme-indian-economy/

The MSME Development act classifies manufacturing units into medium, small and micro enterprises depending upon the investment made in plant and machinery. Any enterprise with investment in plant and machinery of up to INR 50 million is considered as medium enterprise while those having investment between INR1.0 million to INR2.5 million is a small enterprise and one with less than INR1.0 million is a micro enterprise. In service sector, any enterprise with the investment limit of INR1.0 million, between INR 1.0-20 million and of upto INR 50 million is called as micro, small and medium enterprise respectively.

The MSMEs have played a great role in ensuring the socialistic goals like equality of income and balance regional development as envisaged by the planners soon after the independence. With the meagre investment in comparison to the various large scale private and public enterprises, the MSMEs are found to be more efficient providing more employment opportunities at relatively lower cost. The employment intensity of MSMEs is estimated to be four times greater than that of large enterprises. Currently, around 36 million SMEs are generating 80 million employment opportunities, contributing 8% of the GDP, 45% of total manufacturing output and 40% of the total exports from the country. MSMEs account for more than 80% of the total industrial enterprises in India creating more than 8000 value added products.

The most important contribution of SMEs in India is promoting the balanced economic development. The trickle down effects of large enterprises is very limited in contrast to small industries where fruits of percolation of economic growth are more visible. While the large enterprises largely created the islands of prosperity in the ocean of poverty, small enterprises have succeeded in fulfilling the socialistic goals of providing equitable growth. It had also helped in industrialization of rural and backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income.Urban area with around 857,000 enterprises accounted for 54.77% of the total working enterprises in Registered MSME sector whereas in rural areas around 707,000 enterprises (45.23% of the working enterprises) are located. Small industries also help the large in industries by supplying them ancillary products.

Riaz Haq said...

#India Is Stalling the #WHO's Efforts to Make Global #Covid #Death Toll Public. Over a third of the additional 9 million deaths are estimated to have occurred in India, where the government of PM #Modi has stood by its own count of about 520,000. #BJP
https://www.nytimes.com/2022/04/16/health/global-covid-deaths-who-india.html?smid=tw-share

An ambitious effort by the World Health Organization to calculate the global death toll from the coronavirus pandemic has found that vastly more people died than previously believed — a total of about 15 million by the end of 2021, more than double the official total of six million reported by countries individually.

But the release of the staggering estimate — the result of more than a year of research and analysis by experts around the world and the most comprehensive look at the lethality of the pandemic to date — has been delayed for months because of objections from India, which disputes the calculation of how many of its citizens died and has tried to keep it from becoming public.

More than a third of the additional nine million deaths are estimated to have occurred in India, where the government of Prime Minister Narendra Modi has stood by its own count of about 520,000. The W.H.O. will show the country’s toll is at least four million, according to people familiar with the numbers who were not authorized to disclose them, which would give India the highest tally in the world, they said. The Times was unable to learn the estimates for other countries.

The W.H.O. calculation combined national data on reported deaths with new information from localities and household surveys, and with statistical models that aim to account for deaths that were missed. Most of the difference in the new global estimate represents previously uncounted deaths, the bulk of which were directly from Covid; the new number also includes indirect deaths, like those of people unable to access care for other ailments because of the pandemic.

The delay in releasing the figures is significant because the global data is essential for understanding how the pandemic has played out and what steps could mitigate a similar crisis in the future. It has created turmoil in the normally staid world of health statistics — a feud cloaked in anodyne language is playing out at the United Nations Statistical Commission, the world body that gathers health data, spurred by India’s refusal to cooperate.

“It’s important for global accounting and the moral obligation to those who have died, but also important very practically. If there are subsequent waves, then really understanding the death total is key to knowing if vaccination campaigns are working,” said Dr. Prabhat Jha, director of the Centre for Global Health Research in Toronto and a member of the expert working group supporting the W.H.O.’s excess death calculation. “And it’s important for accountability.”

To try to take the true measure of the pandemic’s impact, the W.H.O. assembled a collection of specialists including demographers, public health experts, statisticians and data scientists. The Technical Advisory Group, as it is known, has been collaborating across countries to try to piece together the most complete accounting of the pandemic dead.

The Times spoke with more than 10 people familiar with the data. The W.H.O. had planned to make the numbers public in January but the release has continually been pushed back.

Recently, a few members of the group warned the W.H.O. that if the organization did not release the figures, the experts would do so themselves, three people familiar with the matter said.

Riaz Haq said...

Bulk of India’s unemployed population is in the middle-income households that earn between Rs 2 lakh and Rs 5 lakh a year despite the fact that they have the highest labour participation rate among non-rich household groups, the Centre for Monitoring Indian Economy said.

https://economictimes.indiatimes.com/jobs/middle-income-households-account-for-largest-chunk-of-indias-unemployed-population-cmie/articleshow/90563660.cms

Citing its Consumer Pyramids Household Survey (CPHS) data, CMIE said the middle class households accounted for half of the total households and also half of the unemployed and the largest number of unemployed people while the average labour participation rate (LPR) of this group was 43% compared to the overall average LPR was 40.8%. Also, it experiences an elevated unemployment rate of over 9%.

“India’s biggest challenge on the employment front is to provide jobs that yield about Rs 2,00,000 a year to about 16 million unemployed in the middle class households,” CMIE said in its weekly labour market analysis.

CMIE has divided households into five income classes. At the bottom of the income pyramid are households that earn less than Rs 100,000 a year. The next group earns between Rs 100,000 and Rs.200,000 a year and is called the lower middle class. The third group of households earns between Rs 200,000 and Rs 500,000 a year and belong to the middle income class. The fourth earns between Rs 500,000 and Rs 1 million a year and could be classified as the upper middle class and the richest group of house earn more than Rs 1 million in a year.

Further, a little over a third of the unemployed reside in the lower middle income households that earn between Rs 1 lakh and Rs 2 lakh. These households accounted for about 45 per cent of all households and the share of this class in the total unemployed increased from 33% during September-December 2019 to 39.5% during May-August 2021 as a significant portion of this income group migrated to lower income groups during 2021-22.

According to CMIE, the poorest households accounted for 9.8% of all the households and only 3.2% of all the unemployed before the pandemic in 2019-20. However, in 2020-21 and the first half of 2021-22 they accounted for 16.6% of all households but still accounted for only 3.5% of all the unemployed.

The richer households, however, suffer the least pain of unemployment. They account for about 0.5% of all households and contain a similar proportion of all unemployed. Their average LPR at 46.3% is the highest among all income groups.

As per CMIE, their unemployment rate had shot up the most among all income groups but has since declined. It was over 15% during the first wave of the pandemic. But, in 2021, the rate averaged at 5.2%. The employment rate has been mostly over 40% but shot up to 45% during September-December 2021.

“However, even India’s best case employment rate at 45% is much worse than the world average of 54%,” it concluded.

Riaz Haq said...

India’s auto market at a decade low; 6 red signals, from high fuel prices to chip shortage, stall the road to recovery this year


https://auto.economictimes.indiatimes.com/news/industry/indias-auto-market-at-a-decade-low-6-red-signals-from-high-fuel-prices-to-chip-shortage-stall-the-road-to-recovery-this-year/91061638


HIGHLIGHTS
Over 40% idle capacity in auto industry
Tractor sales down for 7 consecutive months
Motorcycle and entry-level car demand under pressure
Implementation of OBD to increase 2W price by 6%-7%
No major indicator for rural market revival
Commodity prices soar by up to 200%
Fuel prices hover above INR 100/litre
PV exports at a decade low
Increase in booking cancellations
New Delhi: India’s automobile sales in the domestic market nosedived to 17.51 million in 2021-22, lowest since 2012-13 when the total wholesales were at 17.82 million, says the Society of Indian Automobile Manufacturers (SIAM).

Two-wheelers, the worst-hit segment, declined to a decade low in 2021-2022 to 13,466,000 units. It was in 2011-2012 that the two-wheeler sales were close to this number at 13,409,00. In the peak year FY19, the nation's two-wheeler market was at over 21 million units.

The deficit in the ICE two-wheeler is incredibly wide even after adding the electric two-wheelers, including low-speed and high speed, which were at about 3 lakh units. ICE three-wheelers volume also remained at 260,000 units, less than 50% of the peak volumes, while the total installed capacity is over a million units. The electric vehicles are catching up the fastest in this segment with almost 35% penetration.

Riaz Haq said...

Majority of #India’s 900 Million #Workforce Stop Looking for Jobs. #Labor participation rate dropped from 46% to 40% in 5 years. Only 9% of #Indian #women are employed or looking for jobs. #unemployment #BJP #Modi #economy #Hindutva #IslamophobiaInIndia https://www.bloomberg.com/news/articles/2022-04-24/majority-of-india-s-900-million-workforce-stop-looking-for-jobs

By Vrishti Beniwal
April 24, 2022, 4:31 PM PDT

India’s job creation problem is morphing into a greater threat: a growing number of people are no longer even looking for work.

Frustrated at not being able to find the right kind of job, millions of Indians, particularly women, are exiting the labor force entirely, according to new data from the Centre for Monitoring Indian Economy Pvt, a private research firm in Mumbai.

Riaz Haq said...

#India NITI Aayog’s first “SDG India - Index & Dashboard 2019-20” report showed that of 28 states/UTs it mapped, #poverty went up in 22, #hunger in 24 and #income #inequality in 25 of those states/UTs. #unemployment #economy #COVID19 #BJP #Modi #Hindutva https://www.fortuneindia.com/opinion/how-many-are-poor-in-india/107883

First, the IMF’s estimation.

The IMF used (i) the HCES of 2011-12 (the fiscal year 2011 for the IMF) as the base and estimated consumption distribution for all the years until 2020-21 (IMF’s 2020) “via the use of estimates based on average per capita nominal PFCE growth” and (ii) also took into consideration “the average rupee food subsidy transfer to each individual” for the years of 2004-05 to 2020-21.

The second factor – taking the money value of subsidised and free ration for 2020-21 – was considered because it said without this any exercise of poverty estimation “solely on the basis of reported consumption expenditures will lead to an overestimation of poverty levels”.

Several questions arise out of this methodology. The first is its extensive use of HCES of 2011-12 while being dismissive of the HCES of 2017-18 (which showed poverty growing). The second is, PFCE maps the consumption expenditure of all Indians, rich or poor, except government consumption (GFCE), and doesn’t tell which segment (income level) of society spends how much – making it impossible to know the status of households, which can be considered for poverty estimation.

The third is about the IMF’s assumption that the subsidised and free ration (which started during the pandemic under the PMGKY) reached two-thirds of the population and that the free ration will continue forever (eliminating extreme poverty). The IMF report cheers the Aadhaar-linked ration cards. None of these assumptions can be taken at face value.

The CAG report tabled in Parliament earlier this month highlighted several flaws in the Aadhaar’s functioning, including 73% of faulty biometrics that people paid to correct, duplications and verification failures. Besides, one year after the mass exodus began in 2020, migrant workers had not received subsidised ration, forcing the Supreme Court to lambast the central government (for its failure to operationalise the App being developed for the purpose and work-in-progress “one-nation-one-ration card” system) and direct state governments to ensure ration to migrants.

And what happens when the free ration is discontinued after September 2022? The decline in extreme poverty would return, wouldn’t it? So, does the IMF believe this amounts to poverty elimination?

On the other hand, the WB report seeks to marry the NSSO’s 2011-12 HCES to private sector data, the CMIE’s Consumer Pyramid Household Survey (CPHS), to inform its poverty estimation.

This is when the WB report admits that (i) the CMIE’s CPHS data is not comparable with the NSSO’s and that (ii) it “reweighed CPHS to construct NSSO-compatible measures of poverty and inequality for the years 2015 to 2019”. It said the CPHS data needed to be transformed into “a nationally representative dataset”.

As for the CPHS data, an elaborate debate about its ability to capture poverty took place last year. Several economists, including Jean Dreze, pointed out “a troubling pattern of poverty underestimation in CPHS, vis-à-vis other national surveys”. Several others accused the CPHS of a pronounced bias in favour of the “well-off”, which the CMIE admitted and promised to look into.

Another question arises from the use of the CPHS.

If a private firm like the CMIE can carry out household surveys every month or every quarter (for example, its employment-unemployment data is monthly) why can’t the government with decades of institutional knowledge and experience and huge human and financial resources?

Riaz Haq said...

Latest CMIE data: Indian labor force participation has dropped from 46% in 2017 to 40%. This "discouraged worker effect" shows people are giving up looking for work. India is growing. Job creation must be core policy to ensure all growth is not at the top.


https://www.business-standard.com/article/economy-policy/india-s-job-market-going-into-greater-threat-people-no-more-look-for-work-122042500124_1.html

India’s job creation problem is morphing into a greater threat: a growing number of people are no longer even looking for work.
Frustrated at not being able to find the right kind of job, millions of Indians, particularly women, are exiting the labor force entirely, according to new data from the Centre for Monitoring Indian Economy Pvt, a private research firm in Mumbai.

With India betting on young workers to drive growth in one of the world’s fastest-expanding economies, the latest numbers are an ominous harbinger. Between 2017 and 2022, the overall labor participation rate dropped from 46% to 40%. Among women, the data is even starker. About 21 million disappeared from the workforce, leaving only 9% of the eligible population employed or looking for positions.

Now, more than half of the 900 million Indians of legal working age -- roughly the population of the U.S. and Russia combined -- don’t want a job, according to the CMIE.

“The large share of discouraged workers suggests that India is unlikely to reap the dividend that its young population has to offer,” said Kunal Kundu, an economist with Societe Generale GSC Pvt in Bengaluru. “India will likely remain in a middle-income trap, with the K-shaped growth path further fueling inequality.”

India’s challenges around job creation are well-documented. With about two-thirds of the population between the ages of 15 and 64, competition for anything beyond menial labor is fierce. Stable positions in the government routinely draw millions of applications and entrance to top engineering schools is practically a crapshoot.

Though Prime Minister Narendra Modi has prioritized jobs, pressing India to strive for “amrit kaal,” or a golden era of growth, his administration has made limited progress in solving impossible demographic math. To keep pace with a youth bulge, India needs to create at least 90 million new non-farm jobs by 2030, according to a 2020 report by McKinsey Global Institute. That would require an annual GDP growth of 8% to 8.5%.

“I’m dependent on others for every penny,” said Shivani Thakur, 25, who recently left a hotel job because the hours were so irregular.


Failing to put young people to work could push India off the road to developed-country status.

Though the nation has made great strides in liberalizing its economy, drawing in the likes of Apple Inc. and Amazon.com Inc, India’s dependency ratio will start rising soon. Economists worry that the country may miss the window to reap a demographic dividend. In other words, Indians may become older, but not richer.

A decline in labor predates the pandemic. In 2016, after the government banned most currency notes in an attempt to stamp out black money, the economy sputtered. The roll-out of a nationwide sales tax around the same time posed another challenge. India has struggled to adapt to the transition from an informal to formal economy.

Explanations for the drop in workforce participation vary. Unemployed Indians are often students or homemakers. Many of them survive on rental income, the pensions of elderly household members or government transfers. In a world of rapid technological change, others are simply falling behind in having marketable skill-sets.

For women, the reasons sometimes relate to safety or time-consuming responsibilities at home. Though they represent 49% of India’s population, women contribute only 18% of its economic output, about half the global average.


Riaz Haq said...

#India’s extreme #heatwave is thwarting #Modi’s plan to “feed the world”. India is experiencing relentless heat waves for the 2nd month in a row. This has now begun to wilt the country’s #agriculture sector, especially #wheat production. #ClimateEmergency https://qz.com/india/2160187/indias-heat-wave-will-impact-modis-wheat-export-plans/

India has been experiencing relentless heat waves for the second month in a row. This has now begun to wilt the country’s agriculture sector, especially wheat production.

A low yield, coupled with rising food inflation, would force the government to prioritise domestic consumption over exports, potentially tripping up prime minister Narendra Modi’s recent offer to help feed the world.

Riaz Haq said...

CMIE: #India's #unemployment rate jumped to 7.83% in April from 7.60% in March. #Urban #jobless rate soared to 9.22% from 8.28% in March. #Modi #BJP #economy #Hindutva #Islamophobia https://www.business-standard.com/article/economy-policy/india-s-unemployment-rate-rose-to-7-83-in-april-shows-cmie-data-122050201088_1.html

The unemployment rate in the country grew to 7.83 per cent in April from 7.60 per cent in March, according to the Centre for Monitoring Indian Economy (CMIE) data.

The unemployment rate in urban areas was higher at 9.22 per cent compared to 8.28 per cent in March, the data released on Monday showed.




In the rural area, the unemployment rate was at 7.18 per cent in April compared to 7.29 per cent in the previous month.

Unemployment rate was the highest in Haryana at 34.5 per cent followed by Rajasthan at 28.8 per cent, Bihar 21.1 per cent and Jammu and Kashmir 15.6 per cent, the data showed.


CMIE managing director Mahesh Vyas told PTI that it is important to note that the labour force participation rate and the employment rate also increased in April.

"This is a good development," Vyas said.

The employment rate rose from 36.46 per cent to 37.05 per cent in April, he added.

Riaz Haq said...

“Make in India” has failed, replaced by a government that never admits defeat with a call for “self-reliance.” Now, exactly 30 years after India turned away from central planning and liberated the private sector, the government is again handing out subsidies and licenses while putting up tariff walls


https://www.business-standard.com/article/economy-policy/why-india-s-new-industrial-policy-is-doomed-to-fail-at-the-cost-billions-121071600093_1.html


One of Narendra Modi’s first promises when elected India’s prime minister in 2014 was to revive the country’s manufacturing sector. India had been de-industrializing since the early part of the century and policy makers correctly argued that only mass manufacturing could create enough jobs for a workforce growing by a million young people a month.

In his first major speech as prime minister, Modi invited the world to help: “I want to appeal all the people world over [sic], ‘Come, make in India,’ ‘Come, manufacture in India.’ Sell in any country of the world but manufacture here.”




The “Make in India” slogan quickly developed into a full-fledged government program, complete with a snazzy symbol — a striding lion made out of meshed gears. Government officials spoke at length about increasing foreign direct investment and improving the business climate to attract multinational companies. Careful targeting of the World Bank’s Ease of Doing Business indicators raised the country 79 positions in the five years after Modi took office.


And, after all that, in 2019 the share of manufacturing in India’s GDP stood at a 20-year low. Most foreign investment has poured into service sectors such as retail, software and telecommunications. “Make in India” has failed, replaced by a government that never admits defeat with a call for “self-reliance.”

---------

The government’s defenders point out that its investor-friendly reforms weren’t answered; nobody came to “Make in India.” And, they ask, hasn’t China profited handsomely from subsidizing its own manufacturing sector?

Such arguments miss the point. Modi’s manufacturing push never went much further than gaming the World Bank’s indicators. No investor believes structural reforms, particularly to the legal system, have gone deep enough. India has a large workforce but too few skilled workers. To top it all off, the rupee is overvalued. Rather than work at solving these interconnected and complex problems, politicians in New Delhi have decided to paper over them with taxpayer money.

Perhaps picking winners has worked for China. What Indians know for certain is that it did not work here after decades of trying. Sure, public investment in sectors of vital strategic importance — electricity storage, perhaps, or cutting-edge pharma — is defensible. But when you start throwing money at every sector that you wish had developed on its own, then all you’re announcing to the world is that you’re out of ideas.

India’s haphazard foray into industrial policy is going to fail, just as “Make in India” did. And it’s likely to cost the country billions along the way.

Riaz Haq said...

Problems Facing Indian Economy
25 February 2022 by Tejvan Pettinger

https://www.economicshelp.org/india-2/problems-indian-economy/

Since 1991, the Indian economy has pursued free market liberalisation, greater openness in trade and increase investment in infrastructure. This helped the Indian economy to achieve a rapid rate of economic growth and economic development. However, the economy still faces various problems and challenges, such as corruption, lack of infrastructure, poverty in rural areas and poor tax collection rates.

1. Unemployment

Despite rapid economic growth, unemployment is still an issue in both rural and urban areas. The fast rate of economic growth has left unskilled workers behind, and they have struggled to find work in growing industries. In 2017, the official unemployment rate was just below 5%. However, a report by the OECD found over 30% of people aged 15-29 in India are not in employment, education or training (NEETs). Livemint reported on March 6, 2017. WIth, little if any government welfare support for the unemployed, it leads to dire poverty.

2. Poor educational standards

Although India has benefited from a high % of English speakers, (important for call centre industry) there is still high levels of illiteracy amongst the population. It is worse in rural areas and amongst women. Over 50% of Indian women are illiterate. This limits economic development and a more skilled workforce.

3. Poor Infrastructure

Many Indians lack basic amenities lack access to running water. Indian public services are creaking under the strain of bureaucracy and inefficiency. Over 40% of Indian fruit rots before it reaches the market; this is one example of the supply constraints and inefficiency’s facing the Indian economy.

4. Balance of Payments deterioration.

Although India has built up large amounts of foreign currency reserves, the high rates of economic growth have been at the cost of a persistent current account deficit. In late 2012, the current account reached a peak of 6% of GDP. Since then there has been an improvement in the current account. But, the Indian economy has seen imports growth faster than exports. This means India needs to attract capital flows to finance the deficit. Also, the large deficit caused the depreciation in the Rupee between 2012 and 2014. Whilst the deficit remains, there is always the fear of a further devaluation in the Rupee. There is a need to rebalance the economy and improve the competitiveness of exports.

5. High levels of private debt

Buoyed by a property boom the amount of lending in India has grown by 30% in the past year. However, there are concerns about the risk of such loans. If they are dependent on rising property prices it could be problematic. Furthermore, if inflation increases further it may force the RBI to increase interest rates. If interest rates rise substantially it will leave those indebted facing rising interest payments and potentially reducing consumer spending in the future

6. Inequality has risen rather than decreased.

It is hoped that economic growth would help drag the Indian poor above the poverty line. However, so far economic growth has been highly uneven benefiting the skilled and wealthy disproportionately. Many of India’s rural poor are yet to receive any tangible benefit from India’s economic growth. More than 78 million homes do not have electricity. 33% (268million) of the population live on less than $1 per day. Furthermore with the spread of television in Indian villages the poor are increasingly aware of the disparity between rich and poor. (3)

7. Large Budget Deficit

India has one of the largest budget deficits in the developing world. Excluding subsidies, it amounts to nearly 8% of GDP. Although it is fallen a little in the past year. It still allows little scope for increasing investment in public services like health and education.

Riaz Haq said...

Can #Indian #economy survive a global downturn? #India's currency #INR is at an all-time low, #unemployment is high. #Food, #energy prices are rising. #COVID19 , #UkraineWar and the #Shanghai lockdown could derail the world economic recovery. #inflation https://www.thehindubusinessline.com/opinion/can-the-indian-economy-survive-a-global-downturn/article65401455.ece

Everyone was hoping this would be the year of recovery when the global economy climbed off its Covid-19 sickbed and took the first tentative steps towards normalcy. As we recovered from Omicron, there were faint hopes we might have put the illness behind us. That brief spurt of optimism now seems premature.

The grim truth is the world couldn’t be in a worse shape. For a start, Covid-19 hasn’t gone away. Then, there’s the Russia-Ukraine war, now stretching into its 77th day with no end in sight. If all that isn’t enough, Shanghai, China’s biggest industrial city, is still undergoing a prolonged lockdown and supply disruptions could throw the global economy out of gear.

-------------
Inflation has become a global phenomenon, and the Reserve Bank of India and other central banks are all hiking interest rates with more tightening to come. Throw in the falling rupee and that will push up the prices of all imports starting with oil, coal, steel and cement and other commodities. Inevitably, prices of everyday necessities to luxury goods will rise. The Indonesians have already banned edible oil exports which we need in large quantities and prices of pulses are also rising, driven in part by the Russia-Ukraine war. And as consumers abandon discretionary spending, this lowers tax revenues and leaves the government in a tighter-than-ever squeeze with less to spend on key projects.

---------------
Mercedes Benz’s India CEO has gone on record to say he doesn’t have enough vehicles to meet strong demand. On a different level, companies like Maruti and Hero are saying there’s insufficient demand for their lower-end vehicles, suggesting buyers in those categories are stalling on purchases due to financial worries. Throw in sliding stock markets for the more well-heeled and it’s clear discretionary spending will suffer.

Outsourcing to China where manufacturing was cheaper seemed like a great idea until now when the perils of putting all your production eggs in one basket are becoming clear. Over the last 30 years, China has become the world’s factory and there’s nothing left in the West. Take shipbuilding for instance. The world’s 10 top shipyards are in South Korea and China.

Now, with China in lockdown, it’s disrupting global supply lines and creating shortages globally. It’s unclear when Shanghai will get Xi’s all-clear to open up. We’ve seen from our own experience a two-to-three week lockdown doesn’t stamp out Covid-19 totally and Omicron is especially fast-spreading.

Can India escape the effects of a global slowdown? We emerged relatively unscathed in 1999 and also 2008. But now we’re more interlocked with the world and it’s tough to see us escaping the multiple blows that are striking different corners of the globe.

Riaz Haq said...

The Indian economy is being rewired. The opportunity is immense And so are the stakes

https://www.economist.com/leaders/2022/05/13/the-indian-economy-is-being-rewired-the-opportunity-is-immense

Who deserves the credit? Chance has played a big role: India did not create the Sino-American split or the cloud, but benefits from both. So has the steady accumulation of piecemeal reform over many governments. The digital-identity scheme and new national tax system were dreamed up a decade or more ago.

Mr Modi’s government has also got a lot right. It has backed the tech stack and direct welfare, and persevered with the painful task of shrinking the informal economy. It has found pragmatic fixes. Central-government purchases of solar power have kick-started renewables. Financial reforms have made it easier to float young firms and bankrupt bad ones. Mr Modi’s electoral prowess provides economic continuity. Even the opposition expects him to be in power well after the election in 2024.

The danger is that over the next decade this dominance hardens into autocracy. One risk is the bjp’s abhorrent hostility towards Muslims, which it uses to rally its political base. Companies tend to shrug this off, judging that Mr Modi can keep tensions under control and that capital flight will be limited. Yet violence and deteriorating human rights could lead to stigma that impairs India’s access to Western markets. The bjp’s desire for religious and linguistic conformity in a huge, diverse country could be destabilising. Were the party to impose Hindi as the national language, secessionist pressures would grow in some wealthy states that pay much of the taxes.

The quality of decision-making could also deteriorate. Prickly and vindictive, the government has co-opted the bureaucracy to bully the press and the courts. A botched decision to abolish bank notes in 2016 showed Mr Modi’s impulsive side. A strongman lacking checks and balances can eventually endanger not just demo cracy, but also the economy: think of President Recep Tayyip Erdogan in Turkey, whose bizarre views on inflation have caused a currency crisis. And, given the bjp’s ambivalence towards foreign capital, the campaign for national renewal risks regressing into protectionism. The party loves blank cheques from Silicon Valley but is wary of foreign firms competing in India. Today’s targeted subsidies could degenerate into autarky and cronyism—the tendencies that have long held India back.

Seizing the moment
For India to grow at 7% or 8% for years to come would be momentous. It would lift huge numbers of people out of poverty. It would generate a vast new market and manufacturing base for global business, and it would change the global balance of power by creating a bigger counterweight to China in Asia. Fate, inheritance and pragmatic decisions have created a new opportunity in the next decade. It is India’s and Mr Modi’s to squander. ■

Riaz Haq said...

Rajeev Matta
@RajeevMatta
India’s total debt in March 2014 was 53 lac crores. In March 2023 it will be 153 lac crores. He has added 100 lac crore in 8 years.
India’s debt to GDP ratio was 73.95% in Dec 20.
(1/n)

https://twitter.com/RajeevMatta/status/1525346057122885632?s=20&t=Zyx1zQAQBBPBZOtbnnbWNg

--------

Rajeev Matta
@RajeevMatta
Foreign reserves are under 600 billion dollars. The trade deficit in March 22 alone was 18.51 billion when we exported the most (an increase of 19.76%); the import too that month increased by 24.21% (they don’t highlight that).
(2/n)

------------
Rajeev Matta
@RajeevMatta
Besides paying for the trade deficit, the foreign reserves need to provide for 256 billion dollars of debt repayment by Sept 22. Imagine, with imports getting costlier where we will be then.
(3/n)

-------------


Rajeev Matta
@RajeevMatta
Indian banks, specially the govt ones are making merry. In FY 21, they wrote off loans worth Rs 2.02 lac crore and since 2014, a whopping 10.7 lac crores. 75% of this is by public sector banks. We all know who all borrowed and scooted or not paying back.
(4/n)

-------------

Rajeev Matta
@RajeevMatta
Finally, the GDP. We were going well at 8.26% in March '16 after which he punctured the tyres of the running car. Remember demonetization? We came down to 6.80 in 17; 6.53 in 18; 4.04 in 19 & -7.96 in 20. Who says pandemic and world economy are responsible for our halt?
(n/n)

Riaz Haq said...

Research article
Open Access
Published: 29 May 2020
A comparison of the Indian diet with the EAT-Lancet reference diet
Manika Sharma, Avinash Kishore, Devesh Roy & Kuhu Joshi

https://bmcpublichealth.biomedcentral.com/articles/10.1186/s12889-020-08951-8

The average calorie intake/person/day in both rural (2214 kcal) and urban (2169 kcal) India is less than the reference diet (Table 1). In both rural and urban areas, people in rich households (top deciles of monthly per capita consumption expenditure (MPCE)) consume more than 3000 kcal/day i.e. 20% more than the reference diet. Their calorie intake/person/day is almost twice as high as their poorest counterparts (households in the bottom MPCE deciles) who consume only 1645 kcals/person/day (Table 1).



-------

The average daily calorie consumption in India is below the recommended 2503 kcal/capita/day across all groups compared, except for the richest 5% of the population. Calorie share of whole grains is significantly higher than the EAT-Lancet recommendations while those of fruits, vegetables, legumes, meat, fish and eggs are significantly lower. The share of calories from protein sources is only 6–8% in India compared to 29% in the reference diet. The imbalance is highest for the households in the lowest decile of consumption expenditure, but even the richest households in India do not consume adequate amounts of fruits, vegetables and non-cereal proteins in their diets. An average Indian household consumes more calories from processed foods than fruits.

------------------

The EAT-Lancet reference diet is made up of 8 food groups - whole grains, tubers and starchy vegetables, fruits, other vegetables, dairy foods, protein sources, added fats, and added sugars. Caloric intake (kcal/day) limits for each food group are given and add up to a 2500 kcal daily diet [7]. We compare the proportional calorie (daily per capita) shares of the food groups in the reference diet with similar food groups in Indian Diets.

Riaz Haq said...

Our total consumption of wheat and atta is about 125kg per capita per year. Our per person per day calorie intake has risen from about 2,078 in 1949-50 to 2,400 in 2001-02 and 2,580 in 2020-21

By Riaz Riazuddin former deputy governor of the State Bank of Pakistan.


https://www.dawn.com/news/1659441/consumption-habits-inflation

As households move to upper-income brackets, the share of spending on food consumption falls. This is known as Engel’s law. Empirical proof of this relationship is visible in the falling share of food from about 48pc in 2001-02 for the average household. This is an obvious indication that the real incomes of households have risen steadily since then, and inflation has not eaten up the entire rise in nominal incomes. Inflation seldom outpaces the rise in nominal incomes.

Coming back to eating habits, our main food spending is on milk. Of the total spending on food, about 25pc was spent on milk (fresh, packed and dry) in 2018-19, up from nearly 17pc in 2001-01. This is a good sign as milk is the most nourishing of all food items. This behaviour (largest spending on milk) holds worldwide. The direct consumption of milk by our households was about seven kilograms per month, or 84kg per year. Total milk consumption per capita is much higher because we also eat ice cream, halwa, jalebi, gulab jamun and whatnot bought from the market. The milk used in them is consumed indirectly. Our total per person per year consumption of milk was 168kg in 2018-19. This has risen from about 150kg in 2000-01. It was 107kg in 1949-50 showing considerable improvement since then.

Since milk is the single largest contributor in expenditure, its contribution to inflation should be very high. Thanks to milk price behaviour, it is seldom in the news as opposed to sugar and wheat, whose price trend, besides hurting the poor is also exploited for gaining political mileage. According to PBS, milk prices have risen from Rs82.50 per litre in October 2018 to Rs104.32 in October 2021. This is a three-year rise of 26.4pc, or per annum rise of 8.1pc. Another blessing related to milk is that the year-to-year variation in its prices is much lower than that of other food items. The three-year rise in CPI is about 30pc, or an average of 9.7pc per year till last month. Clearly, milk prices have contributed to containing inflation to a single digit during this period.

Next to milk is wheat and atta which constitute about 11.2pc of the monthly food expenditure — less than half of milk. Wheat and atta are our staple food and their direct consumption by the average household is 7kg per capita (84kg per capita per year). As we also eat naan from the tandoors, bread from bakeries etc, our indirect consumption of wheat and atta is 41kg per capita. Our total consumption of wheat and atta is about 125kg per capita per year. Our per person per day calorie intake has risen from about 2,078 in 1949-50 to 2,400 in 2001-02 and 2,580 in 2020-21. The per capita per day protein intake in grams increased from 63 to 67 to about 75 during these years. Does this indicate better health? To answer this, let us look at how we devour ghee and sugar. Also remember that each person requires a minimum of 2,100 calories and 60g of protein per day.

Undoubtedly, ghee, cooking oil and sugar have a special place in our culture. We are familiar with Urdu idioms mentioning ghee and shakkar. Two relate to our eating habits. We greet good news by saying ‘Aap kay munh may ghee shakkar’, which literally means that may your mouth be filled with ghee and sugar. We envy the fortune of others by saying ‘Panchon oonglian ghee mei’ (all five fingers immersed in ghee, or having the best of both worlds). These sayings reflect not only our eating trends, but also the inflation burden of the rising prices of these three items — ghee, cooking oil and sugar. Recall any wedding dinner. Ghee is floating in our plates.

Riaz Haq said...

Research article
Open Access
Published: 29 May 2020
A comparison of the Indian diet with the EAT-Lancet reference diet
Manika Sharma, Avinash Kishore, Devesh Roy & Kuhu Joshi

https://bmcpublichealth.biomedcentral.com/articles/10.1186/s12889-020-08951-8

The average calorie intake/person/day in both rural (2214 kcal) and urban (2169 kcal) India is less than the reference diet (Table 1). In both rural and urban areas, people in rich households (top deciles of monthly per capita consumption expenditure (MPCE)) consume more than 3000 kcal/day i.e. 20% more than the reference diet. Their calorie intake/person/day is almost twice as high as their poorest counterparts (households in the bottom MPCE deciles) who consume only 1645 kcals/person/day (Table 1).



-------

The average daily calorie consumption in India is below the recommended 2503 kcal/capita/day across all groups compared, except for the richest 5% of the population. Calorie share of whole grains is significantly higher than the EAT-Lancet recommendations while those of fruits, vegetables, legumes, meat, fish and eggs are significantly lower. The share of calories from protein sources is only 6–8% in India compared to 29% in the reference diet. The imbalance is highest for the households in the lowest decile of consumption expenditure, but even the richest households in India do not consume adequate amounts of fruits, vegetables and non-cereal proteins in their diets. An average Indian household consumes more calories from processed foods than fruits.

------------------

The EAT-Lancet reference diet is made up of 8 food groups - whole grains, tubers and starchy vegetables, fruits, other vegetables, dairy foods, protein sources, added fats, and added sugars. Caloric intake (kcal/day) limits for each food group are given and add up to a 2500 kcal daily diet [7]. We compare the proportional calorie (daily per capita) shares of the food groups in the reference diet with similar food groups in Indian Diets.

Riaz Haq said...

Comparative performance: Global Hunger Index


https://www.theindiaforum.in/article/persistence-food-insecurity-malnutrition?utm_source=twitter

India has been performing poorly in global rankings of hunger. It ranks 101st out of 116 countries on the Global Hunger Index (GHI) 2021......

The Global Hunger Report 2021 gives comparable GHI scores for four separate years between 2000 and 2021. 2 Table 1 compares the GHI for India with four countries: all ranking better than India currently but with GHI scores close to or worse than India’s in 2000. This shows the relatively slow improvement in India. Cambodia which in 2000 had a GHI of 41.1, higher than India’s 38.8, managed by 2021 to reduce its score to 17, while India could lower it to only 27.5. During this period Cambodia moved from the ‘Alarming’ to the ‘Moderate’ category, while India moved from ‘Alarming’ to ‘Serious’.

When the GHI was released a few months back, India put out an official press note claiming that the index used flawed methodology and was not a true reflection of hunger in the country. The main official objections were two-fold. First, that the GHI was based on a phone survey conducted on a small sample and therefore not representative of the true picture in the country. This was not true. The authors of the report clarified that anyone who read the report could see that the data used were not from any phone survey, but, rather, based on official indicators from government or UN sources.

The second objection, which representatives of the NITI Ayog and others have written about, is that while the GHI is called a ‘hunger’ index, it actually measures malnutrition. This is nothing but engaging in semantics while trying to distract attention from the more substantial issues. As explained by the Global Hunger Report, “Hunger is usually understood to refer to the distress associated with a lack of sufficient calories. The Food and Agriculture Organization of the United Nations (FAO) defines food deprivation, or undernourishment, as the consumption of too few calories to provide the minimum amount of dietary energy that each individual requires to live a healthy and productive life, given that person’s sex, age, stature, and physical activity level.” The GHI includes measures of population undernourishment, childhood stunting, childhood wasting and child mortality and tries to capture it in a broader sense of food insecurity and malnutrition.

Hunger in India
Measuring hunger has been deeply controversial in India and globally, but the most common way in which it is done is by looking at adequacy of food consumption in calorie terms. Some analysis based on the data from the 2017–18 NSS consumption expenditure survey, as available in a leaked report (and analysed in the The India Forum), showed that mean consumption expenditure, as well as the mean consumption expenditure on food, declined between 2011–12 and 2017–18. These declines in average per capita consumption expenditures on food most likely reflect an increase in hunger amongst the poor (Subramanian, 2019). A decline in real food consumption expenditure also indicates an increase in poverty.

----
As can be seen in Figure 2, while the undernourishment in India showed a secular decline from around 2005 onwards, the last few years have shown a reversal of this trend. Both as a proportion and in absolute numbers, there has been an increase in the prevalence of undernutrition after 2016. The prevalence of undernutrition, taken as a three-year moving average, was 13.8% for 2016–18, going up to 14% in 2017–19, and 15.3% in 2018–20. This data does not take into account the pandemic years, which based on all indications can be expected to have been worse.

Riaz Haq said...

‘Diet of Average Indian Lacks Protein, Fruit, Vegetables’
On average, the Indian total calorie intake is approximately 2,200 kcals per person per day, 12 per cent lower than the EAT-Lancet reference diet's recommended level.

https://www.india.com/lifestyle/diet-of-average-indian-lacks-protein-fruit-vegetables-4066766/

Compared to an influential diet for promoting human and planetary health, the diets of average Indians are considered unhealthy comprising excess consumption of cereals, but not enough consumption of proteins, fruits and vegetables, said a new study.Also Read - Autistic Pride Day 2020: Diet Rules For Kids With Autism

The findings by the International Food Policy Research Institute (IFPRI) and CGIAR research program on Agriculture for Nutrition and Health (A4NH) broadly apply across all states and income levels, underlining the challenges many Indians face in obtaining healthy diets. Also Read - Vitamin K Rich Food: Include These Items in Your Daily Diet to Avoid Uncontrolled Bleeding

“The EAT-Lancet diet is not a silver bullet for the myriad nutrition and environmental challenges food systems currently present, but it does provide a useful guide for evaluating how healthy and sustainable Indian diets are,” said the lead author of the research article, A4NH Program Manager Manika Sharma. Also Read - Experiencing Hair Fall? Include These Super-foods in Your Daily Diet ASAP

“At least on the nutrition front we find Indian diets to be well below optimal.”

The EAT-Lancet reference diet, published by the EAT-Lancet Commission on Food, Planet, and Health, implies that transforming eating habits, improving food production and reducing food wastage is critical to feed a future population of 10 billion a healthy diet within planetary boundaries.

While the EAT-Lancet reference diet recommends eating large shares of plant-based foods and little to no processed meat and starchy vegetables, the research demonstrates that incomes and preferences in India are driving drastically different patterns of consumption.

Riaz Haq said...

Why is India's economy looking so bleak?

https://qz.com/india/2170008/why-is-indias-economy-looking-so-bleak/

https://vigourtimes.com/why-is-indias-economy-looking-so-bleak-quartz-india/


There's an apocalyptic nature to the way things feel and look right now.

Overnight news of a crash and slide for the Dow and Nasdaq bring fears every morning of another stock market rout in India. The rupee is in completely new and scary territory now slip- sliding towards the 80-mark to the dollar. Crude has shown no inclination to ease back from the triple digits it now trades in.

All this is what grabs headlines and eyeballs. But to call a spade a spade, the stock market represents and holds only a minuscule fraction of India's population and investing community within it. It is undoubtedly called the barometer of sentiment but whose sentiment does it reflect and is it only now that things have turned bad?

Go back a few years to the red-letter demonetisation day on Nov. 8, 2016. On the face of it, both the country and the ruling Bharatiya Janata Party government emerged intact from a dangerous experiment. What went unnoticed—or certainly, unreported by mainstream media—was the devastation it wreaked on small and medium businesses. That devastation has turned into a slow but fatal grind, pulverising business after business.

What sucking out cash from the system did in 2016, was followed up by a patchwork rollout of the Goods and Services Tax in 2017. More pressure. The final nail in the coffin has been the insidious rise and rise of inflation. In April this year, inflation at the retail level surged to an eight-year high of 7.79%. The wholesale price index hit a record high of 15.1%, the outcome of rising prices of vegetables, fruits, milk, manufacturing, fuel, and power.

Lest we begin to blame it all on the war in Ukraine, inflation has remained in double digits for 13 months in a row now. A red flag that was waving in the air for many months, and now seems to have the Reserve Bank of India's full attention.

Biting the bullet

Large businesses have responded. Consumer goods companies have decided to bite the cost bullet. Prices of goods have been…


-------------


Key lessons
But it leaves important lessons to think about. What did I learn from this, was I truly looking at investing when I picked up the small cap stock? Do I know enough to be trading in the futures and options market, sharp as a knife and fast as a bullet? A young India that was bedazzled by the cryptocurrency market will also have to collect its broken earnings and dreams. India has been one of the world’s fastest-growing cryptocurrency markets, increasing by 641% between July 2020 and June 2021. Much of that was India’s young population, from the B and C cities. In the crash burn we have seen this year, many young traders have been left singed.

The ultimate lesson, I believe, is this. When there is a cancer in the system, it will spread. For all those who believed the market, or one segment of the economy, would continue to grow even as the broader market and population was crumbling under the pressure of the last few years, it has not worked that way.

Riaz Haq said...

Why is India's economy looking so bleak?

https://qz.com/india/2170008/why-is-indias-economy-looking-so-bleak/

https://vigourtimes.com/why-is-indias-economy-looking-so-bleak-quartz-india/


Biting the bullet
Large businesses have responded. Consumer goods companies have decided to bite the cost bullet. Prices of goods have been increased, package sizes will get smaller, and downtrading—switching from expensive products to cheaper alternatives—is the new reality for daily household purchases. The construction of homes will get more expensive as the prices of cement, transportation, materials all climb higher.

Do small businesses have the same luxury and leeway? Not really. In an interview to the Business Standard, Jitubhai Vakharia, the president of the South Gujarat Textile Processors’ Association in Surat, explained how the input cost of coal has almost doubled. The cost of dyes and chemicals have increased by 25% to 40% and the price of some chemicals like sodium hydrosulphite of soda or discharging agent like safolite have increased by 140% to 150%. Input costs have increased he says.

So can they raise costs? Increasing prices is difficult he admitted, as demand is already low in the market.

What that means is, more business could be forced to close, more jobs are lost, and more households are left wondering how they will get by. The government’s own data shows that 5,907 businesses registered as micro, small, and medium enterprises were shut during financial years 2020-’21 and 2021-’22. In the 2021 financial year, 330 MSMEs were shut down.

It is perhaps with an eye to this simmering discontent around price rise and seeing the neighbouring country of Sri Lanka quite literally go up in flames over spiralling inflation, that finance minister Nirmala Sitharaman announced on Saturday an excise cut in petrol and diesel taxes and a 200 rupees ($2.58) subsidy for those buying cooking gas cylinders, along with some customs duty cuts. While the move is being criticised as an optical illusion, the Narendra Modi government has clearly sensed dissatisfaction around the way costs have risen and moved to do some damage control.

The latest State of Inequality in India Report by the economic advisory council to the prime minister had these observations to share. The income of the top 1% shows a growing trend, while that of the bottom 10% is shrinking—the top 1% of income earners in India cumulatively earn more than three times of what is earned by the bottom 10%. Within that, a person who earns an average of Rs25,000 per month is now part of the top 10% of the total wages earned bracket. What does that mean for the others, what are people earning and how are they getting by in an environment of continuous cost rise?

This economic strife also begets the question, why doesn’t it translate into protests, electoral punishment? Why aren’t people voting out governments when they feel the pressure of rising costs, no jobs, and less and less ability to spend?

Riaz Haq said...

Why is India's economy looking so bleak?

https://qz.com/india/2170008/why-is-indias-economy-looking-so-bleak/

https://vigourtimes.com/why-is-indias-economy-looking-so-bleak-quartz-india/

This economic strife also begets the question, why doesn’t it translate into protests, electoral punishment? Why aren’t people voting out governments when they feel the pressure of rising costs, no jobs, and less and less ability to spend?

Difficult conditions
One, this does not have a singular unified impact. In the run-up to the Uttar Pradesh elections, many roving reporters thrust their mikes into the faces of people. What do you worry about, what is a concern, they were asked? “Mehengai,” the rising cost of living, the interviewees would respond. Prices of cooking oils like mustard oil and sunflower oil had risen, gas cylinder prices were up, jobs were scarce and running a household was an uphill struggle. India’s overall unemployment rate rose to 7.83% in April, up from 7.6% in March.

Yet, it did not impact voting choices and the ruling state government was elected back with a clear majority. It is because my inflation is not your inflation. My household cost pressures are not yours. I have a job, but you don’t. Cost rise is too fluid and wide a challenge to cement together an entire population into making a political choice borne of it.

There is also the insulation that welfare schemes have created for the very poor. Food schemes, cash transfers, and some workdays through the Mahatma Gandhi National Rural Employment Guarantee, which assures rural families of 100 days of work a year. The slice left vulnerable and besieged is India’s large and diverse middle class that is now feeling the pain. Households that own a motorcycle and dream of a small car, households that want to move from their one-bedroom rented accommodation, to a two-bedroom home of their own.

The rise of political marketing
Two, we now have a changed polity. With close to 500 million users, India has the most WhatsApp users. All of whom have been nursed with consistent messaging around political agenda. If the last 10 years have seen economic missteps, they have equally been marked by the rise of marketing in politics. More than Rs6,500 crore was spent on elections by 18 political parties between 2015 and 2020. Of this, political parties spent more than Rs3,400 crore or 52.3% on publicity alone.

The Bharatiya Janata Party spent 56% (over Rs3,600 crore) of the total election outlay by all 18 parties in the five years and Congress spent 21.41% (over Rs1,400 crore). In the last five years, the BJP has spent 54.87% (over Rs2,000 crore) of their total election expenditure on “advertisements and publicity” compared to 7.2% (Rs260 crore) on marches, rallies, and other campaigns. The Congress, in the five-year period, has spent 40.08% (Rs 560 crore) of the total election expenditure on election-related publicity.

Does all this matter? Higher public expenditure on publicity and advertising in an election year is a major factor for a state government to retain power, In a May 2021 State Bank of India report titled “State Elections: How Women are Shaping India’s Destiny,” Soumya Kanti Ghosh. the Group Chief Economic Adviser, writes that in most of the states, on an average in order to be re-elected, incumbent governments make huge spends in an election year.

Riaz Haq said...

Why is India's economy looking so bleak?

https://qz.com/india/2170008/why-is-indias-economy-looking-so-bleak/

https://vigourtimes.com/why-is-indias-economy-looking-so-bleak-quartz-india/

Does all this matter? Higher public expenditure on publicity and advertising in an election year is a major factor for a state government to retain power, In a May 2021 State Bank of India report titled “State Elections: How Women are Shaping India’s Destiny,” Soumya Kanti Ghosh. the Group Chief Economic Adviser, writes that in most of the states, on an average in order to be re-elected, incumbent governments make huge spends in an election year.


In a few states where publicity expenditure was low in election year, the incumbent government mostly lost the election. It may be fair to say then that this marketing blitz can mould voter opinion, whether it is to highlight the benefits of a regime—or to demonise a section of the population.

What does all this have to do with the stock market that’s battling its own losses and the fear of a prolonged bear trading patch? It is an ugly situation for markets, there’s no denying. Selling in the equity universe will come in waves and lashes, this purging of stocks, prices, and holdings. However, this too shall pass. It may leave the markets in a dull trading range for many months where things move neither higher nor lower. Or it may bounce back faster than expected, egged on by better global news and the return of the prodigal foreign institutional investors.

Key lessons
But it leaves important lessons to think about. What did I learn from this, was I truly looking at investing when I picked up the small cap stock? Do I know enough to be trading in the futures and options market, sharp as a knife and fast as a bullet? A young India that was bedazzled by the cryptocurrency market will also have to collect its broken earnings and dreams. India has been one of the world’s fastest-growing cryptocurrency markets, increasing by 641% between July 2020 and June 2021. Much of that was India’s young population, from the B and C cities. In the crash burn we have seen this year, many young traders have been left singed.

The ultimate lesson, I believe, is this. When there is a cancer in the system, it will spread. For all those who believed the market, or one segment of the economy, would continue to grow even as the broader market and population was crumbling under the pressure of the last few years, it has not worked that way.

It is also true that we still remain a nation of great potential, a large working force, a diverse geography, a huge market size. But will India continue to walk into the future with only a rich few, or will we take all our people with us? As James Baldwin wrote, “Neither love nor terror makes one blind; indifference makes one blind.”

This article first appeared on Scroll.in. We welcome your comments at ideas.india@qz.com.

Riaz Haq said...

As the wealthy converge on Davos to discuss the world’s problems, a case for taxing the rich

Harsh Mander and Prabhat Patnaik discuss funding universal social and economic rights, not just a universal basic income, in a time of widening inequalities.

https://scroll.in/article/1024582/as-the-wealthy-converge-on-davos-to-discuss-the-worlds-problems-a-case-for-taxing-the-rich


For instance, you look at per capita food intake. The proportion of people [consuming] below 2,200 calories per day in rural India, which is supposed to be the benchmark for poverty, in 1993-’94 was about 58%. You look at 2011, it was 68%. In urban India, corresponding, it was 57% and 65%.


What has happened now is that education and healthcare are much more expensive, none of which gets captured in the consumer price index. As a result, people are forced to spend so much on these that they actually skimp on buying food.


-------

Mander: I was struck by the latest World Development Report. It is perhaps the first major admission by the Bretton Woods set of institutions [World Bank and International Monetary Fund] that we may not be able to produce jobs, that jobless growth is actually not an aberration, but is almost written into the nature of [the] neoliberal model. But the solution that they want to give is universal basic income.

Prabhat Patnaik: Exactly. However, suppose everybody gets a certain amount of money, but with no school or government hospital within their radius. In that case, the idea of simply handing you money just does not help. It is very important that actual essential services and commodities must be made available to everybody, including work opportunities. And this is what the welfare state actually promised you.

Harsh Mander: Suppose I have a child with disabilities, I have many more economic needs than someone who does not. So a basic income and top-up idea is also blind to those questions.

My next question is with the conversation about universal social rights, which rights are we speaking about?

Prabhat Patnaik: Well, you can think in terms of a very wide range of rights. In my writings, I have essentially been talking about five economic rights. But I am not sticking to just those five, and neither am I saying that these five should take priority over other kinds of rights.

Harsh Mander: And these five are: employment, healthcare, school education, pensions, and food and nutrition.

Prabhat Patnaik: That’s right. So I am talking about just these five because I made some calculations based on them.

Mander: Just looking at the politics in India today, I think we are passing through such a difficult moment. There was a cartoon I saw the other day where there is a curfew outside and a man trapped inside. He is begging to get out. He is the economic crisis. Today, we see a different face of the economic crisis. A crisis in which if I do not have work or all my social rights, at least I am becoming a part of a “powerful Hindu nation”.

Elsewhere in the world, we are seeing the rise of political leaders very similar to the one we have elected. So, do you even feel that the conversations around universal social rights are going to emerge?

Patnaik: I think the Hindu Right has hijacked the political discourse. In some sense, we have to recapture the political discourse around the question of the improvement of the economy and the living of the people.

Mander: This has been a fascinating discussion. But the last question I have for you is about the critique on the idea of utopia since it is not feasible and we don’t have the money. As an economist, you have done your calculations. Obviously, we will have to reorganise how we spend the existing public resources. But how would we be actually able to raise the kind of resources that we require for the idea of universal social rights, even if we stay with just the five you spoke about?

Riaz Haq said...

Modi Govt @ 8
SUBHASH CHANDRA GARG

https://www.moneycontrol.com/news/opinion/modi-govt-8-indian-economy-journey-eight-years-8572101.html


‘Sabka saath, sabka vikas’ defined and operationalised an ambitious, universal, and effective redistribution agenda.

The PM Awas Yojana for housing, Saubhagya for electricity, Ujjwala for LPG connections, Swachh Bharat Abhiyan for toilets, and Ayushman Bharat for medical insurance reached out to all without critical basic facilities, and delivered benefits without discrimination.

The universal Aadhaar identity, and widespread use of fintech for direct benefit transfers, made delivery of benefits efficient, and eliminated corruption.

The adoption of ambitious renewable energy goals — first 175 GW by 2022, and then 450 GW of by 2030 — offered hope of saving India from pollution, and controlling carbon emissions.

Despite some unnecessary convulsions such as demonetisation, India’s economic management was indeed stellar in Modi’s first term.

Wobbly Second Term

Come the second term of the BJP-led NDA government, starting 2019, and the economic performance is facing headwinds.

Imposition of the most stringent and unimaginative lockdown in March 2020 was a disastrous self-goal. Scars of that lockdown are still visible. Consumer demand and value added in sectors such as construction and services have still not returned to pre-COVID-19 levels.

The government’s privatisation programme has floundered. Privatisation of two banks announced in the Budget 2021 has not seen any tangible progress. The Bill to amend the bank nationalisation law is nowhere in sight. The privatisation of BPCL is off the table. Privatisation of CONCOR, Shipping Corporation, IDBI Bank, a general insurance company etc. are all stuck. Privatisation transactions of Pawan Hans and CEL have been stopped after announcing acceptance of bids.

Monetisation in the railways, pipelines, and the power sector is stalled. The government is wrongly branding coal and gas block allocations as monetisation of assets.

It is expanding instead of downsizing. Many new ministries and departments have been created; while none closed or downsized. This government is on the defensive. It had to backtrack on agriculture reforms. Consolidated labour laws, despite having been enacted more than 20 months earlier, are in cold storage.

Import duties on cells and modules, key ingredients for executing the renewable energy agenda, have been raised putting the renewable energy programme in jeopardy. Delhi continues to be a pollution nightmare in winters.

In The $10 Trillion Dream, I have called India’s economic performance “the worst first three years of any Government”.

The Way Ahead

India is in a state of policy stasis.

The economic populism of Aatmanirbhar Bharat has dragged India into a quagmire. Tariffs were raised and imports banned in the name of Aatmanirbhar Bharat. India’s imports and trade deficit, however, have risen massively. Foreign portfolio investors have withdrawn their investments in droves.

The government’s policy to control inflation is wobbly and jerky. It is raising export duties, and reducing import duties. After steel, others will likely follow. The government has banned the export of wheat despite India carrying large surplus stocks.

The government is now running one of the largest fiscal deficits in India’s history. Wholesale inflation is at its worst in 30 years. Consumer inflation is well above tolerable limits, and is likely to stay there for many months. India’s foreign exchange reserves are dwindling.

It seems quite likely that remaining two years of the Narendra Modi government will be low growth and high inflation years. Even if one assumes growth of 7 percent a year, India’s GDP would grow at about 3.5 percent a year in Modi’s second five-year term. It will be the lowest growth performance of any government in many decades.

Riaz Haq said...

CNN GPS with Fareed Zakaria May 15, 2022


https://transcripts.cnn.com/show/fzgps/date/2022-05-15/segment/01



ZAKARIA: Ian, I've got to ask you --

BREMMER: I'd want to jump in on that.

ZAKARIA: Yes. Do it quickly because I have got to ask you about China and Chinese economic growth, which seems veering, you know, very, very low because of the insistence on zero-COVID.

BREMMER: Absolutely true. The quick point I wanted to make is so much of the narrative we've heard from the developing world is, you know, you care about Ukraine because they are European, because they are White, 6 million refugees.

You didn't care about the Syrians. You don't care about Yemen or Afghanistan. The reality is this is a vastly more important conflict for the developing world because of the inter dependence of the global economy.

They should care more about Russia/Ukraine. They should be more invested precisely because this is going to hurt them in a way that Yemen and Syria and Afghanistan really didn't. And the world isn't there today. We have to spread that narrative.

But China, I mean, this is a huge problem. This is the second largest economy in the world and they were the most effective in responding to COVID once they admitted that COVID existed for the first year. They're the only ones that had growth. But they have stuck with it and they have stuck with the same exact zero-COVID policy when they don't have the vaccines, when they don't have the therapeutics. And now that's really causing more supply chain challenges on top of everything we've just been discussing.

And, by the way, this is fixable. The fact is that the single greatest excess commodity we have in the world right now -- it's not energy, it's not food, it's not fertilizer, it's mRNA vaccines for COVID. We can't get them in the arms of Africans because we don't have the infrastructure on the ground. The Chinese do but they refuse to accept international coordination and help because they're so angry at the way they were blamed. And they're so angry about the way that COVID has gone through the rest of the world while the Chinese locked it down. As a consequence we are all suffering. We can't coordinate on COVID.

ZAKARIA: Thoughts on China. You know, it's aiming for zero-COVID. It appears to be getting zero economic growth. I mean, that's an exaggeration but how bad is that?

BEDDOES (The Economist): I think it's pretty bad and I think it is clearly you cannot have zero-COVID. This is a strategy that in the long run cannot work. But unfortunately in a year where Xi Jinping wants to become the national party Congress later this year, effectively ruler for life, I think we're getting to the stage where no one dares tell him, no one dares say this is not going to work.

[10:45:10]

And if you mix that -- if you add to that -- the clamp-down on tech that he did in the last few months, I'm increasingly worried that China is moving towards sort of slightly erratic, autocratic culture, personal autocratic system of government. And so I'm deeply worried about China.

But just to end on a really good note and particularly to you, Fareed, I have just been in India. And I am much, much more upbeat in India.

ZAKARIA: You have an amazing cover story (in the Economist Magazine)

BEDDOES: Our cover story this week in India is they could blow it. You know, the Modi government could blow it but India has the ingredients both luck -- because of China's travails and because the world wants an alternative supplier. Because they benefited from their huge investment in digital tech, because a lot of things that are going right for them, I'm very, very upbeat on the potential for India. This year is going to be the fastest growing economy in the world and it could be the next 10 years if they play things right.

BREMMER: One hundred twenty degrees Fahrenheit in Delhi right now, Fareed. I don't know.

Riaz Haq said...

Earning Rs 25,000 monthly puts one in India's top 10%: Inequality report
Salaried employees who file income taxes are relatively better off, says study that recommends an urban employment scheme.


https://www.business-standard.com/article/economy-policy/earning-rs-25-000-monthly-puts-one-in-india-s-top-10-inequality-report-122051901283_1.html

An Indian making Rs 3 lakh a year would be placed in the top 10 per cent of the country’s wage earners. The data is part of The State of Inequality in India report prepared by the India arm of a global competitiveness initiative, the Institute for Competitiveness.

Bibek Debroy, chairman of the Economic Advisory Council to the Prime Minister released it on Wednesday. The report recommended a scheme for the urban jobless and universal basic income as means to reduce inequality. The nature of one's work may make a difference to income shows a closer look at the numbers in ...

--------------------

If You Earn Rs 25,000 Per Month, You're Among India's Top 10% Income Earners

https://www.indiatimes.com/news/india/if-you-earn-rs-25000-per-month-you-are-among-indias-top-10-income-earners-570330.html

The State of Inequality in India report prepared by the India arm of a global competitiveness initiative, the Institute for Competitiveness, sheds light on the state of gross inequality in the country. Ninety per cent of Indians do not earn even Rs 25,000 per month.

This highlights the failure of the trickle-down approach to economic growth.


Bibek Debroy, chairman of the Economic Advisory Council to the Prime Minister released it on Wednesday.


The report gives a comprehensive overview of the state of inequality in the country by looking at various indicators like income profile, labour market dynamics, health, education, and household amenities.

The report mooted an urban jobs scheme and universal basic income as a means to reduce inequality in the country.

Gaping income disparity
Extrapolation of the income data from Periodic Labour Force Survey 2019-20 has shown that a monthly salary of Rs 25,000 is already amongst the top 10% of total incomes earned, pointing towards some levels of income disparity, the report said.

It further highlighted that the average monthly salary of regular salaried, wage earners in July-September 2019 amounted to Rs 13,912 for rural males and Rs 19,194 for urban males. Employed females in rural parts earned Rs 12,090 in the same period while females in urban India earned an average Rs 15,031.

India’s income profile is outlined by a growing disparity between those who lie on the top end of the earning pyramid and those on the bottom, highlighting the failure of the trickle-down approach to economic growth.

Top 1% earn nearly thrice as much as the bottom 10%
According to the Annual Report of the PLFS 2019- 20, the annual cumulative wages came to be around Rs 18,69,91,00,000, out of which the top 1 per cent earned nearly Rs 1,27,48,00,000, and the bottom 10 per cent accounted for Rs 32,10,00,000 indicating that the top 1 per cent earns almost thrice as much as the bottom 10 per cent.


Meanwhile, the bottom 50% of the pyramid held approximately 22% of the total income earned across the three-time periods. The growth rate of the bottom 50% has been at 3.9% from 2017-18 to 2019-20, while the top 10% has grown by 8.1%.

“This highlights the disparity between the income groups and the disproportionate rate of growth among these tiers. Additionally, the top 1% grew by almost 15% between 2017- 18 to 2019-20, whereas the bottom 10% registered a close to 1% fall,” the report highlighted.

In terms of workforce share, nearly 15 per cent of the entire workforce earns less than Rs 50,000 (less than Rs 5,000 a month), in both years, exacerbating the experiences of poverty and economic inequality.


The PLFS also reported no and negative income, indicating that several households have no disposable income or their debts exceed their incomes.


Riaz Haq said...

Pakistan Labor Force Survey 2020-21



It (unemployment) goes down from (6.9%) in 2018-19 to (6.3%) in the LFS 2020-21. Decrease is observed both in case of males (5.9%, 5.5%) and females (10.0%, 8.9%). Generally the unemployment rate in females is more pronounced as compared to males during the comparative period. Area- wise disaggregated figures indicate that unemployment rate goes down both in urban (7.9%, 7.3%) and in rural areas (6.4%, 5.8%) Comparative figures suggest significant decrease in rural males (5.5%, 5.1%) and females (8.5%, 7.4%) and in urban male (6.5%, 6.0%) and urban females (17.1%, 16.4%). 



https://www.pbs.gov.pk/sites/default/files/labour_force/publications/lfs2020_21/LFS_2020-21_Report.pdf

Comparative surveys estimates indicate changes in the employment shares. Decrease is observed in agriculture/forestry/hunting & fishing (39.2%, 37.4%), wholesale & retail trade (14.5%, 14.4%) and other category (2.2%, 1.5%) while increase is noted in construction (8.0%, 9.5%) and Community/social & personal services (14.9%, 16.0%). Manufacturing (15.0%, 14.9%) and transport storage & communication (6.2%, 6.2%) remain steady during the comparative periods.

Riaz Haq said...

#India #currency in circulation up 9.9% to over ₹31 lakh crore in FY22. Share of ₹500 and ₹2,000 notes together rose to 87.1% of total value of banknotes in circulation, despite #Modi's #DigitalIndia and #fintech. #Demonetization #BJP https://www.fortuneindia.com/macro/currency-in-circulation-up-99-to-over-31-lakh-cr-in-fy22-rbi/108369

The value and volume of banknotes in circulation increased by 9.9% and 5%, respectively, at ₹31,05,721 crore and 13.05 lakh, respectively, the Reserve Bank of India's annual report for 2021-22 shows. Comparatively, the increase in currency in circulation (both value and volume terms) was 16.8% and 7.2%, respectively, during 2020-21.

The rise in banknotes in circulation, despite the government's push for digital India and various reforms in the banking and fintech industry, has been attributed to "the second wave of COVID-19 pandemic, which induced renewed restrictions on movement in various parts of the country”.

The RBI supplies banknotes in denominations of ₹2, ₹5, ₹10, ₹20, ₹50, ₹100, ₹200, ₹500 and ₹2,000, while coins comprise 50 paise and ₹1, ₹2, ₹5, ₹10 and ₹20 denominations.The share of ₹500 banknotes, both in value and volume, increased during 2021-22 as compared to the previous year. However, the ₹2,000 banknote share continued to dip in both value and volume.In value terms, the share of these banknotes together accounted for 87.1% of the total value of banknotes in circulation as of March 31, 2022, against 85.7% on March 31, 2021.In volume terms, ₹500 notes constituted the highest share at 34.9%, followed by ₹10 denomination at 21.3% of the total currency in circulation as of March 31, 2022.The total value of coins in circulation rose 4.1% to ₹27,970 crore in 2021-22, while its volume grew 1.3% to 12,46,298.As of March 31, 2022, the coins of ₹1, ₹2 and ₹5 together constituted 83.5% of the total volume of coins in circulation, while in value terms, these denominations accounted for 75.8%.The currency issuance (both banknotes and coins) and its management are performed by the RBI through its issue offices, currency chests and small coin depots spread across the country.As of March 31, 2022, the State Bank of India accounted for the highest share of 53.6% in the currency chests network. The indent of banknotes was lower by 1.8% in 2021-22 than that of a year ago. The supply of banknotes was also marginally lower by 0.4% during the said year than the previous year.During 2021-22, the indent and supply of coins saw a huge drop at 73.3% and 73%, respectively, from the previous year.The RBI data shows that the year 2021-22 saw an 88.4% rise in the disposal of soiled banknotes as compared to the previous year at 1,878.01 crore pieces vs 997.02 crore pieces during the previous year.During the fiscal year 2021-22, of the total fake currency notes detected in the banking sector, 6.9% were detected at the RBI and 93.1% by other banks.Compared to the previous year, there was an increase of 16.4 per cent, 16.5 per cent, 11.7 per cent, 101.9 per cent and 54.6 per cent in the counterfeit notes detected in the denominations of ₹10, ₹20, ₹200, ₹500 (new design) and ₹2,000, respectively.Overall, the RBI spent ₹4,984.8 crore on security printing from April 1, 2021, to March 31, 2022, against ₹4,012.1 crore in the previous year (July 1, 2020, to March 31, 2021).

Riaz Haq said...

A new low: India is last in environmental performance index for 2022

https://www.livemint.com/news/india/india-ranks-lowest-in-environmental-performance-index-2022-11654594336783.html

---------

Pakistan Rank 176 EPI Score 24.60 Ten Year Change 1.40

India Rank 180 EPI Score 18.90 Ten Year Change -0.60

Bangladesh Rank 177 EPI Score 23.10 Ten Year Change -1.90

https://epi.yale.edu/epi-results/2022/component/epi

https://epi.yale.edu/epi-results/2022/country/pak

------------

As per EPI estimates, only a handful of countries, including Denmark and the United Kingdom, are on track to meet net zero emission goals by 2050. Nations such as China, India, and Russia are headed towards the wrong direction with rapidly rising greenhouse gas emissions.

India scored the lowest among 180 countries in the 2022 Environment Performance Index (EPI), an analysis by researchers of Yale and Columbia University which provides a data-driven summary of the state of sustainability around the world. The EPI ranks 180 countries on 40 performance indicators including climate change, environmental public health, biodiversity, among others.

India ranked at the bottom with a total score of 18.9, while Denmark was the top scorer as the world’s most sustainable country.

“…For the overall performance and ranking EPI, each country’s performance is viewed across numerous (18) categories like ecosystem vitality, biodiversity and habitat, ecosystem services and grassland loss. Unfortunately, India is consistently ranking either at the bottom or close to the bottom in almost all the categories, both regionally and globally," as per a statement by EPI.

“This is fundamentally a question of the development model and pathways we want to pursue and the lifestyles that we as citizens want to adopt. Destroying the environment and nature in the name of ‘development’ should no longer be the path, whatever might be the justification. Such an approach is just not tenable any more," said Ravi Chellam, CEO, Metastring Foundation & Coordinator, Biodiversity Collaborative.

The United States placed at the 20th spot of the 22 wealthy democracies in the global west and 43rd overall. The relatively low ranking reflects the rollback of environmental protections during the Trump administration. “The withdrawal from the Paris Climate Agreement and weakened methane emission rules meant that US lost time to mitigate climate change while many of its peers in the developed world enacted policies to significantly reduce their greenhouse emissions."

The conclusions from the EPI analysis suggest that efficient policy results are directly associated with GDP per capita. The economic prosperity makes it possible for the nations to invest in policies and programs that help lead desirable outcomes.

For the pursuit of economic prosperity manifested in industrialisation and urbanisation, trends that pose climate change strains ecosystem vitality, especially in the developing world where air and water emissions remain significant.

Data suggests, according to EPI, that developing countries do not have to sacrifice sustainability for economic security. The steps taken for climate action initiated by policymakers and stakeholders in leading countries demonstrate that focused attention can mobilise communities to protect natural resources and human well being.

Riaz Haq said...

Pakistanis are eating more and healthier foods, according to the Economic Survey of Pakistan 2021-22. Per capita average daily calorie intake in Pakistan has jumped to 2,735 calories in FY 2021-22 from 2,457 calories in 2019-20. The biggest contributor to it is the per capita consumption of fresh fruits and vegetables which soared from 53.6 Kg to 68.3 Kg. Under former Prime Minister Imran Khan's leadership, Pakistan succeeded in achieving these nutritional improvements in spite of surging global food prices amid the Covid19 pandemic.

https://www.southasiainvestor.com/2022/06/economic-survey-pakistanis-consuming.html

Riaz Haq said...

The diet of an average Indian typically lacks essential nutritional food articles like fruits, vegetables, legumes


https://www.livemint.com/news/71-indians-can-t-afford-a-healthy-meal-millions-die-every-year-due-to-poor-diet-report-11654248984960.html

The majority of Indians cannot afford a healthy meal and millions die every year due to diseases that are directly linked to poor diet, a recent survey showed. Noting that the diet of an average Indian typically lacks essential nutritional food articles like fruits, vegetables, legumes, etc., the report said, “a healthy meal becomes unaffordable if it exceeds 63% of a person's income."

A recent report released by Centre for Science and Environment (CSE) and Down to Earth magazine said, “Seventy-one percent of Indians cannot afford a healthy diet. The global average is 42 percent."

The diet of an average Indian typically lacks fruits, vegetables, legumes, nuts and whole grains. The consumption of fish, dairy and red meat is within target, the report also said the Global Nutrition Report, 2021.

Referring to the diseases that are attributable to poor diet, the survey mentioned respiratory ailments, diabetes, cancer, strokes and coronary heart disease.

Why majority of Indians can't afford a healthy meal?
As per the Food and Agriculture Organisation, a healthy meal becomes unaffordable if it exceeds 63% of a person's income.

Adults above the aged 20 and above consume only 35.8g of fruit per day as against the recommended 200g and 168.7g of vegetables every day as against the minimum 300g that is advised.

Similarly, they consume just 24.9g per day (25% of target) of legumes and 3.2g (13% of target) of nuts per day.

"Despite some progress, diets are not getting healthier. Additionally, they are making increasing demands on the environment, even as unacceptable levels of malnutrition persist in the country," the report said

Riaz Haq said...

90% of Women in India Are Shut Out of the Workforce
A small fraction of women in India had formal employment before the pandemic. Covid made it so much worse.

By Ronojoy Mazumdar and Archana Chaudhary
June 1, 2022, 5:01 PM PDT

https://www.tbsnews.net/bloomberg-special/90-women-india-are-shut-out-workforce-431950

For years, Sanchuri Bhuniya fought her parents' pleas to settle down. She wanted to travel and earn money — not become a housewife.

So in 2019, Bhuniya snuck out of her isolated village in eastern India. She took a train hundreds of miles south to the city of Bengaluru and found work in a garment factory earning $120 a month. The job liberated her. "I ran away," she said. "That's the only way I was able to go."

That life of financial freedom ended abruptly with the arrival of Covid-19. In 2020, Prime Minister Narendra Modi declared a nationwide lockdown to curb infections, shutting almost all businesses. Within a few weeks, more than 100 million Indians lost their jobs, including Bhuniya, who was forced to return to her village and never found another stable employer.

As the world climbs out of the pandemic, economists warn of a troubling data point: Failing to restore jobs for women — who have been less likely than men to return to the workforce — could shave trillions of dollars off global economic growth. The forecast is particularly bleak in developing countries like India, where female labor force participation fell so steeply that it's now in the same league as war-torn Yemen.

This week's episode of The Pay Check podcast explores how the coronavirus accelerated an already worrying trend in the world's second-most populous country. Between 2010 and 2020, the number of working women in India dropped from 26% to 19%, according to data compiled by the World Bank. As infections surged, a bad situation turned dire: Economists in Mumbai estimate that female employment plummeted to 9% by 2022.

This is disastrous news for India's economy, which had started slowing before the pandemic. Modi has prioritized job creation, pressing the country to strive for amrit kaal, a golden era of growth. But his administration has made little progress in improving prospects for working women. That's especially true in rural areas, where more than two-thirds of India's 1.3 billion people live, conservative mores reign and jobs have been evaporating for years. Despite the nation's rapid economic expansion, women have struggled to make the transition to working in urban centers.

Closing the employment gap between men and women — a whopping 58 percentage points — could expand India's GDP by close to a third by 2050. That equates to nearly $6 trillion in constant US dollar terms, according to a recent analysis from Bloomberg Economics. Doing nothing threatens to derail the country on its quest to become a competitive producer for global markets. Though women in India represent 48% of the population, they contribute only around 17% of GDP compared to 40% in China.

India is an extreme illustration of a global phenomenon. Across the world, women were more likely than men to lose jobs during the pandemic, and their recovery has been slower. Policy changes that address gender disparities and boost the number of working women — improved access to education, child care, or flexible work arrangements, for example — would help add about $20 trillion to global GDP by 2050, according to Bloomberg Economics.

For workers like Bhuniya, 23, the pandemic had heavy consequences. After losing her job, she struggled to afford food in Bengaluru and eventually returned to her remote village, Patrapali, in the state of Odisha. Bhuniya doesn't think she'll have another opportunity to leave. She no longer earns a steady income, but her family worries about her safety as a single woman living in a distant city.

Riaz Haq said...

https://www.tbsnews.net/bloomberg-special/90-women-india-are-shut-out-workforce-431950

"If I run away again, my mother will curse me," said Bhuniya. "Now, there's nothing left. My account is empty and there's little work in the village."

The story echoes across India. During the pandemic, Rosa Abraham, an economics professor at Azim Premji University in Bengaluru, tracked more than 20,000 people as they navigated the labor market. She found that after the first lockdown, women were several times more likely to lose their jobs than men and far less likely to recover work after restrictions lifted.

Pandemic Impact on Employment
How India's Covid lockdowns affected employment for men and women


Increased domestic duties, lack of childcare options after school shutdowns, and a surge in marriages — which often confine women's autonomy in India — help explain the difference in outcome.

"When men are faced with this kind of a huge economic shock, then they have a fallback option," Abraham said. "They can navigate to different kinds of work. But for women, there is no such fallback option. They can't negotiate the labor market as effectively as men do."

Dreams of freedom or a well-paid office job were replaced with what she called "distress-led employment," essentially unpaid work on a family farm or taking care of the home. Prior to the pandemic, Indian women already performed about 10 times more care work than men, around three times the global average.

"It is the unfortunate situation that the decision to work is often not in the hands of the woman herself," Abraham said.

The decline in workforce participation is partly about culture. As Indians became wealthier, families that could afford to keep women at home did so, thinking it conferred social status. On the other extreme, those at the lowest rungs of society are still seen as potential earners. But they tend to work menial or unpaid jobs far from the formal economy. In the official statistics, their labor is not counted.

In many villages, patriarchal values remain ironclad, and a stigma against girls persists. Though illegal, sex-selective abortions are still common. Akhina Hansraj, senior program manager at Akshara Centre, a Mumbai-based organization that advocates for gender equity, said Indian men often think "it's not very manly if their wife contributes to the family income."

"They want to create this dependency," Hansraj said. "People believe if women get educated, they might work and become financially independent and then they may not obey and respect the family."

Marriage is a sticking point in India, where most weddings are still arranged. After the first lockdown, in 2020, the country's leading matrimony websites reported a spike in new registrations. In some states, marriages among children and young adults — many of them illegal under Indian law — jumped by 80%, according to government data.

Madhu Sharma, a Hindi teacher at the Pardada Pardadi Educational Society, a girls' school in the northern town of Anupshahr, said she might intervene in three child marriages a year. During the pandemic, when the campus closed, the number increased three to four times.

"Before Covid, children were always in touch with their teachers and also with me," she said. "After Covid, when the children had to stay at home, keeping in contact with them became a big challenge."

Financial considerations often tipped the scales in favor of marriage. Social distancing and warnings against large gatherings meant parents could hold small, less-expensive ceremonies at home, rather than the multi-day celebrations that are common even in the poorest pockets of society. During the direst stretches of the pandemic, some families married off daughters because they couldn't afford to feed another mouth.


Riaz Haq said...

https://www.tbsnews.net/bloomberg-special/90-women-india-are-shut-out-workforce-431950

For Sharma's students, getting married before finishing school can change the trajectory of their lives. In India, when a woman marries, she typically moves in with her husband and in-laws. That can make it difficult to leave secluded villages where policing of choices is common and employment opportunities are scarce.

"We try to educate our students," Sharma said. "We explain to them that if they study, they will be in a good spot. If they don't, we describe what their position will be like. 'The rest is up to you,' we tell them. You live life the way you want to create it."

In 2015, Modi started a campaign called "Beti Bachao, Beti Padhao," which roughly means "Save Our Daughters, Teach Our Daughters." It's an initiative aimed at keeping girls in school and reducing sex-selective abortion. The government has also tried to eradicate child marriage. Last year, Modi's administration passed a proposal to raise the legal marriage age for women from 18 to 21, which is what it is for men.

But in many villages, national laws are distant abstractions. Local customs are still set and enforced by local panchayats, essentially a group of elders, almost all men. And while Modi's campaign to educate India's daughters received lots of publicity, recent government audits found that much of the initiative's funds remained unspent.

Even in urban metropolises, where literacy rates are far higher and jobs are more abundant, the pressure on women is overwhelming.

Anjali Gupta, who lives in Mumbai, said she was barely hanging on. First, the coronavirus lockdowns devastated her family's small grocery store, forcing them to exhaust their savings to survive. Then her parents started pushing Gupta and her three sisters to get married, fearing that they would be left destitute without husbands.

Gupta tried to reason with them. She had already spent about $1,300 studying for a master's degree in pharmaceuticals and nutrition. She was training with a homeopathic doctor. She wanted a career. "I explained that my situation is different, my generation is different," Gupta said.

But after an uncle died from the coronavirus, Gupta's father pleaded with her to drop out of school, a prospect that induced migraines and endless arguments. Her parents started bringing prospective grooms home. Gupta worries the inertia will eventually overpower her.

"It shouldn't be this way," she said. "I want to do and learn more. I'm only 22."

Riaz Haq said...

Pakistan's female labor participation rate of 21.4% (LFS 20290-21) is higher than India's 16.1% (Reuters report)


----------------

Pakistan Labor Force Survey 2020-21



Refined Activity (Participation) Rate (%)

Pakistan Total 44.9 Male 67.9 Female 21.4

Rural 48.6 Male 69.1 Female 28.0

Urban Male 65.9 Female 10.0

-----------

India's female labour participation rate falls to 16.1% as pandemic hits jobs

According to World Bank estimates, India has one of the lowest female labour force participation rates in the world. Less than a third of women – defined in the report as 15 or older – are working or actively looking for a job.

The female labour participation rate in India had fallen to 20.3% in 2019 from more than 26% in 2005, according to World Bank estimates, compared with 30.5% in neighbouring Bangladesh and 33.7% in Sri Lanka.

https://www.reuters.com/world/india/indias-female-labour-participation-rate-falls-161-pandemic-hits-jobs-2021-08-03/#:~:text=The%20female%20labour%20participation%20rate,and%2033.7%25%20in%20Sri%20Lanka.

Riaz Haq said...

India’s Economy Is Growing Quickly. Why Can’t It Produce Enough Jobs?
The disconnect is a result of India’s uneven growth, powered and enjoyed by the country’s upper strata.

By Emily Schmall and Sameer Yasir

https://www.nytimes.com/2022/06/13/business/economy/india-economy-jobs.html

Among the job seekers despairing over the lack of opportunities is Sweety Sinha, who lives in Haryana, a northern state where unemployment was a staggering 34.5 percent in April.

As a child, Ms. Sinha liked to pretend to be a teacher, standing in front of her village classroom with fake eyeglasses and a wooden baton, to fellow students’ great amusement.

Her ambition came true years later when she got a job teaching math at a private school. But the coronavirus upended her dreams, as the Indian economy contracted 7.3 percent in the 2020-21 fiscal year. Within months of starting, she and several other teachers were laid off because so many students had dropped out.

Ms. Sinha, 30, is again in the market for a job. In November, she joined thousands of applicants vying for much-coveted work in the government. She has also traveled across Haryana seeking jobs, but turned them down because of the meager pay — less than $400 a month.

“Sometimes, during nights, I really get scared: What if I am not able to get anything?” she said. “All of my friends are suffering because of unemployment.”
---------

The struggles of working-class Indians, and the millions of unemployed, may eventually cause a drag on growth, economists say.
--------

NEW DELHI — On paper, India’s economy has had a banner year. Exports are at record highs. Profits of publicly traded companies have doubled. A vibrant middle class, built over the past few decades, is now shelling out so much on movie tickets, cars, real estate and vacations that economists call it post-pandemic “revenge spending.”

Yet even as India is projected to have the fastest growth of any major economy this year, the rosy headline figures do not reflect reality for hundreds of millions of Indians. The growth is still not translating into enough jobs for the waves of educated young people who enter the labor force each year. A far larger number of Indians eke out a living in the informal sector, and they have been battered in recent months by high inflation, especially in food prices.

The disconnect is a result of India’s uneven growth, which is powered by the voracious consumption of the country’s upper strata but whose benefits often do not extend beyond the urban middle class. The pandemic has magnified the divide, throwing tens of millions of Indians into extreme poverty while the number of Indian billionaires has surged, according to Oxfam.

The concentration of wealth is in part a product of the growth-at-all-costs ambitions of Prime Minister Narendra Modi, who promised when he was re-elected in 2019 to double the size of India’s economy by 2024, lifting the country into the $5 trillion-or-more club alongside the United States, China and Japan.

The government reported late last month that the economy had expanded 8.7 percent in the last year, to $3.3 trillion. But with domestic investment lackluster, and government hiring slowing, India has turned to subsidized fuel, food and housing for the poorest to address the widespread joblessness. Free grains now reach two-thirds of the country’s more than 1.3 billion people.

Those handouts, by some calculations, have pushed inequality in India to its lowest level in decades. Still, critics of the Indian government say that subsidies cannot be used forever to paper over inadequate job creation. This is especially true as tens of millions of Indians — new college graduates, farmers looking to leave the fields and women taking on work — are expected to seek to flood the nonfarm work force in the coming years.

“There is a historical disconnect in the Indian growth story, where growth essentially happens without a corresponding increase in employment,” said Mahesh Vyas, the chief executive of the Center for Monitoring Indian Economy, a data research firm.

Riaz Haq said...

India’s Economy Is Growing Quickly. Why Can’t It Produce Enough Jobs?
The disconnect is a result of India’s uneven growth, powered and enjoyed by the country’s upper strata.

By Emily Schmall and Sameer Yasir

https://www.nytimes.com/2022/06/13/business/economy/india-economy-jobs.html



But for Indian politicians, a high unemployment rate “is not a showstopper,” said Mr. Vyas, the economist, adding that they were far more concerned with inflation, which affects all voters.

India’s reserve bank and finance ministry have tried to tackle inflation, which is battering many countries because of pandemic-related supply chain problems and the war in Ukraine, by restricting exports of wheat and sugar, raising interest rates and cutting taxes on fuel.

The bank, after raising borrowing rates in May for the first time in two years, increased them again on Wednesday, to 4.9 percent. As it did so, it forecast that inflation would reach 6.7 percent over the next three quarters.

Reserve bank officials have also employed an array of fiscal and monetary tactics to continue supporting growth, which cooled in the first quarter of 2022, falling to 4.1 percent. Household consumption, a major driver of India’s economy, has dropped in the last few months.

“We are committed to containing inflation,” said the bank’s governor, Shaktikanta Das. “At the same time, we have to keep in mind the requirements of growth. It can’t be a situation where the operation is successful and the patient is dead.”

While the Bank of England and the Federal Reserve in the United States have said their countries need to accept lower growth rates because of high commodity prices, India’s reserve bank is not in that camp, said Priyanka Kishore, an analyst at Oxford Economics. “Growth matters a lot for India,” she said. “There’s a political agenda.”

The ban on food exports is a sharp turnabout for Mr. Modi. In response to Russia’s blockade on Ukrainian ports, which has led to a global shortage of grains, he had said in April that Indian farmers could help feed the world. Instead, with the global wheat shortfalls driving up prices, the Indian government imposed an export ban to keep domestic prices low.

Temporary interventions like these are easier than addressing the fundamental problem of large-scale unemployment.

“You have wheat in your godowns and you can ship it out to households and get instant gratification,” Mr. Vyas said, referring to storage facilities, “whereas trying certain policies for employment is far more protracted and intangible.”

Those policies, analysts say, could include greater efforts to build up India’s underdeveloped manufacturing sector. They also say that India should ease regulations that often make it difficult to do business, as well as reducing tariffs so manufacturers have an easier time securing components not made in India.

Exports have been a source of strength for the Indian economy, and the rupee has depreciated by about 4 percent against the U.S. dollar since the beginning of the year, which would normally boost exports.

But inflation in the United States and war in Europe have started to affect sales for Indian-made clothes, said Raja M. Shanmugam, the president of a trade association in Tiruppur, a textile hub in the state of Tamil Nadu.

“All the input cost is increasing. Even earlier this industry worked on wafer-thin margins, but now we are working on loss,” he said. “So a situation which is normally a happy situation for the exporters is not so anymore.”

The struggles of working-class Indians, and the millions of unemployed, may eventually cause a drag on growth, economists say.

Zia Ullah, who drives an auto-rickshaw in Tumakuru, an industrial city in the southern Indian state of Karnataka, said his income was still only about a quarter of what it was before the pandemic.

The $20 he used to earn daily was enough to cover household expenses for his family of five, and school fees for his three children.

“Customers are preferring to walk,” he said. “No one seems to have money these days to take an auto.”

Riaz Haq said...

Female labor force participation rate in India has recently fallen to just 19%, the second lowest after Afghanistan's 15% in the South Asia region. By contrast, Pakistan's women's labor force participation rate is 21%, Sri Lanka's 31% and Bangladesh's 35%. Prime Minister Narendra Modi's mishandling of the COVID19 pandemic has hit Indian women particularly hard, with 90% of those who lost their jobs now shut out of the workforce.

https://www.riazhaq.com/2022/06/indian-womens-labor-force-participation.html

Riaz Haq said...

India asked Washington not to bring up China’s border transgressions: Former US ambassador
Kenneth Juster made the statement on a Times Now show when asked why the United States had not made any statement about Beijing’s aggression.

https://scroll.in/latest/1018580/india-asked-washington-not-to-mention-chinas-border-transgressions-former-us-ambassador-to-india


India and China have been locked in a border standoff since troops of both countries clashed in eastern Ladakh along the Line of Actual Control in June 2020. Twenty Indian soldiers were killed in the hand-to-hand combat. While China had acknowledged casualties early, it did not disclose details till February 2021, when it said four of its soldiers had died.

After several rounds of talks, India and China had last year disengaged from Pangong Tso Lake in February and from Gogra, eastern Ladakh, in August.

Juster, who was the envoy to India between 2017 and 2021, had said in January 2021 that Washington closely coordinated with Delhi amid its standoff with Beijing, but left it to India to provide details of the cooperation.
----------

Former United States Ambassador to India Kenneth Juster has said that Delhi did not want Washington to mention China’s border aggression in its statements.

“The restraint in mentioning China in any US-India communication or any Quad communication comes from India which is very concerned about not poking China in the eye,” Juster said on a Times Now show.

The statement came in response to news anchor and Times Now Editor-in-Chief Rahul Shivshankar’s queries on whether the US had made any statements about Beijing’s aggression.

------------

During the TV show, defence analyst Derek Grossman claimed that Moscow was not a “friend” of India, saying that Russian President Vladimir Putin met his Chinese counterpart Xi Jinping at the Beijing Olympics. Grossman told the news anchor that Putin and Xi had then said that their friendship had “no limits”.

He claimed that India’s strategy to leverage Russia against China did not have any effects. “In fact, Russia-China relations have gotten only stronger.”

To this, Shivshankar said that before passing any judgement on India and Russia’s relationship, he must ask if US President Joe Biden had condemned China’s aggression at the borders along the Line of Actual Control or mentioned Beijing in a joint statement with Prime Minister Narendra Modi.

Grossman said: “To my understanding, the US has asked India if it wanted us to do something on the LAC but India said no – that it was something that India can handle on its own.”

Juster then backed Grossman’s contention.

Riaz Haq said...

Why Multinational companies are quitting #India? 8 years after #Modi first urged foreign companies to “Make in India”, #Indian #economy is seeing thousands of foreign firms leaving. #MakeinIndia #Islamophobia #Hindutva #BJP #bigotry #violence #hate

https://www.deccanherald.com/business/business-news/why-mncs-are-quitting-india-1119422.html

Eight years after Prime Minister Narendra Modi first urged multinational companies to “Make in India”, Asia’s third-largest economy is seeing many foreign firms give up on the country

A slew of big names including German retailer Metro AG, Swiss building-materials firm Holcim, US automaker Ford, UK banking major Royal Bank of Scotland, US bikemaker Harley-Davidson and US banking behemoth Citibank have chosen to
pull the plug on their operations in India or downsize their presence here in recent years. That is a worrying trend at a time when India is trying to position itself as an alternative to China, in a post-Covid world where many MNCs are looking to diversify their supply chain.

A total of 2,783 foreign companies with registered offices or subsidiaries in India closed their operations in the country between 2014 and November 2021, Commerce and Industry Minister Piyush Goyal told Parliament late last year. That is not a small figure, given that there are only 12,458 active foreign subsidiaries operating in India.

------

This might also explain why some of the world’s biggest chipmakers have not warmed up to India despite its government rolling out a red carpet for them by approving a $10 billion incentive plan last year to establish chip and display industries in the
in the country.

----------

When asked if he would consider setting up a factory in India, Tesla CEO Elon Musk tweeted last month that the automaker would not set up a manufacturing plant “in any location where we are not allowed first to sell & service cars”.

Musk will instead look for potential opportunities in Indonesia, known for its business-friendly policy and production of nickel, a critical ingredient in making EV batteries.


Riaz Haq said...

#India's emerging twin #deficit problem: Rising fiscal deficit & growing trade deficit. If unchecked, both deficits could cause a serious #economic crisis, including Balance of Payments crisis. #poverty #unemployment #hunger #Modi #BJP https://indianexpress.com/article/explained/everyday-explainers/indias-emerging-twin-deficit-problem-explained-7982895/ via @IndianExpress

In its latest ‘Monthly Economic Review’, the Ministry of Finance has painted an overall optimistic picture of the state of the domestic economy. “The World is looking at a distinct possibility of widespread stagflation. India, however, is at low risk of stagflation, owing to its prudent stabilization policies,” it states.

The economic growth outlook is likely to be affected by several factors owing to the trade disruptions, export bans and the resulting surge in global commodity prices —all of which will continue to stoke inflation — as long as the Russia-Ukraine conflict persists and global supply chains remain unrepaired. “However, the momentum of economic activities sustained in the first two months of the current financial year augurs well for India continuing to be the quickest growing economy among major countries in 2022-23,” states the Finance Ministry report.

But, given the uncertainties, the report highlights two key areas of concern for the Indian economy: the fiscal deficit and the current account deficit (or CAD).

The report states that “as government revenues take a hit following cuts in excise duties on diesel and petrol, an upside risk to the budgeted level of gross fiscal deficit has emerged”.

The fiscal deficit is essentially the amount of money that the government has to borrow in any year to fill the gap between its expenditures and revenues. Higher levels of fiscal deficit typically imply the government eats into the pool of investible funds in the market which could have been used by the private sector for its own investment needs. At a time when the government is trying its best to kick-start and sustain a private sector investment cycle, borrowing more than what it budgeted will be counter-productive.

The report underscores the need to trim revenue expenditure (or the money government spends just to meet its daily needs). “Rationalizing non-capex expenditure has thus become critical, not only for protecting growth supportive capex but also for avoiding fiscal slippages,” it states. “Capex” or capital expenditure essentially refers to money spent towards creating productive assets such as roads, buildings, ports etc. Capex has a much bigger multiplier effect on the overall GDP growth than revenue expenditure.

Current account deficit

The current account essentially refers to two specific sub-parts:

* Import and Export of goods — this is the “trade account”.

* Import and export of services — this is called the “invisibles account”.

If a country imports more goods (everything from cars to phones to machinery to food grains etc) than it exports, it is said to have a trade account deficit. A deficit implies that more money is going out of the country than coming in via the trade of physical goods. Similarly, the same country could be earning a surplus on the invisibles account — that is, it could be exporting more services than importing.

If, however, the net effect of a trade account and the invisibles account is a deficit, then it is called a current account deficit or CAD. A widening CAD tends to weaken the domestic currency because a CAD implies more dollars (or foreign currencies) are being demanded than rupees.

The Ministry’s worry is that costlier imports such as crude oil and other commodities will not only widen the CAD but also put downward pressure on the rupee. A weaker rupee will, in turn, make future imports costlier. There is one more reason why the rupee may weaken. If, in response to higher interest rates in the western economies especially the US, foreign portfolio investors (FPI) continue to pull out money from the Indian markets, that too will hurt the rupee and further increase CAD.

Riaz Haq said...

#Indian Stock market in bear territory. Its value is already down nearly 20% from its January peak of about $3.7 trillion. Foreign investors have been selling Indian stocks at a record pace, withdrawing about $32 billion since September 2021. #Modi #BJP https://www.business-standard.com/article/markets/three-charts-show-trouble-for-indian-stocks-nearing-a-bear-market-122062400158_1.html

As surging inflation and the end of global easy-money policies send Indian stocks spiraling down from all-time highs, three charts show the pain is unlikely to end anytime soon.

The S&P BSE Sensex Index has fallen more than 15% from its October high, nearing the 20% loss that denotes a bear market. The selloff comes as climbing costs and a record plunge in the rupee have forced the nation’s central bank to join global peers in raising interest rates.

The Indian stock market’s value is already down nearly 20% from its January peak of about $3.7 trillion dollars. The unsupportive economic backdrop combined with an unprecedented exodus of foreign investors and earnings estimates that appear poised to tumble cloud the outlook for a rebound.

“We expect the markets to further correct from here,” said Benaifer Malandkar, chief investment officer at Raay Global Investments Pvt. “Expectation is that by the second quarter, most negative news, the outcome of the Fed’s actions will get priced in.”

Foreigner Flight

Overseas investors have been selling Indian stocks at a record pace, withdrawing about $32 billion from the market since September. The retreat of foreigners is part of a wave hitting nations including South Korea and Taiwan as well.

“India is not in isolation since it’s part of the emerging market basket, and clearly the EMs are out of favor,” said Raay Global’s Malandkar. “Until the US Fed rate is at its peak, we will see redemptions happening across EMs.”

Rosy Estimates

The drop in Indian equities has mainly been caused by valuation contraction so far. Earnings estimates for the NSE Nifty 50 Index are yet to clock a meaningful decline like that seen in MSCI Inc.’s broadest measure for Asian equities.

Over the past few weeks, strategists at Sanford C. Bernstein Ltd., Bank of America Corp. and JPMorgan Chase & Co. have expressed concerns about the earnings optimism that has surrounded India. Pending any rebound in valuations, estimate cuts are likely to pull stocks down further.

Suffering Small-Caps

Smaller stocks have been hit harder by investor risk aversion, with gauges of small and mid-cap Indian shares having already entered bear markets. Market breadth has weakened, with just 16% of S&P BSE 500 Index stocks trading above their 200-day average level, the lowest level in two years.

Riaz Haq said...

#Indian startups laid off over 10,000 #employees in the first 6 months of 2022. At least 27 startups fired workers across #India. As investors put pressure on #startups in India to cut costs, employees are collateral damage. #Ola #Blinkit #Modi #BJP https://qz.com/india/2181236/ola-blinkit-and-others-laid-off-10000-employees-in-2022/


In a widely-circulated 2020 memo, marquee investor Sequoia had warned portfolio companies to keep their staffing levels sustainable. US-based startup accelerator, Y Combinator, also asked founders of its portfolio companies to “plan for the worst.”

The startups, though, seem to have botched it up. They have mostly cited cost-cutting and extended cash runways as reasons for slashing headcount. Macroeconomic uncertainties surely didn’t help.

“War in Europe, impending recession fears, and Fed rate hikes have led to inflationary pressures with massive correction in stocks globally and in India as well,” Vamsi Krishna, CEO of e-learning platform Vedantu, wrote in a May 18 blogpost. “Given this environment, capital will be scarce for upcoming quarters.”

There are myriad other ways to curb spending—a hiring freeze, curtailed marketing, saving on real estate—but laying off is evidently quick and easy. This is particularly so at tech startups which typically tend to over-hire while business is brisk.

Worryingly, the correction is far from over. Experts estimate that the layoff count will rise to 60,000 in the next six-to-nine months.