Saturday, April 16, 2022

Hindu Nationalist RSS Leadership Criticizes Jobless Growth in India

Akhil Bharatiya Pratinidhi Sabha (ABPS), the top decision-making body of India's RSS (Rashtriya Swayamsevak Sangh), says that “the young generation is suffering from unemployment and the pandemic has made things even grim... We cannot turn a blind eye to unemployment. It is a crisis and it needs to be addressed.” The RSS was apparently reacting to the falling labor participation rate in India relative to Pakistan and the global averages. The RSS leadership wants the government of Prime Minister Narendra Modi to focus on helping small and medium sized enterprises (SMEs) to create jobs.  RSS likes Modi government's ‘Make in India’ initiative “but it needs to be sharpened even more and get more investment.” The resolution is titled, ‘The need to promote work opportunities to make Bharat self-reliant’. The solution offered by ABPS resolution: Take agro-based local initiatives to promote rural areas and create jobs, according to Ram Madhav, a member of the RSS executive committee. 

Falling Employment in India. Source: CMIE


India's labor participation rate (LPR) fell to 39.5% in March 2022, as reported by the Center for Monitoring Indian Economy (CMIE). It dropped below the 39.9% participation rate recorded in February. It is also lower than during the second wave of Covid-19 in April-June 2021. The lowest the labor participation rate had fallen to in the second wave was in June 2021 when it fell to 39.6%. The average LPR during April-June 2021 was 40%. March 2022, with no Covid-19 wave and with much lesser restrictions on mobility, has reported a worse LPR of 39.5%.

Labor Participation Rates in India and Pakistan. Source: ILO/World Bank


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). 

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

Construction and manufacturing sectors in India have been shedding jobs while the number of people working in agriculture has been rising, according to CMIE. 

Pakistan Employment By Sectors. Source: PBS via Bilal Gilani

It is important to note that Pakistan’s economy has created 5.5 million jobs during the past three years – 1.84 million jobs a year, significantly higher than yearly average of new jobs created during the 2008-18 decade, according to the findings of Labor Force Survey (LFS) as reported by the Express Tribune paper. The biggest jump in share of employment (1.5%) was in the construction sector, spurred by Naya Pakistan construction incentives offered by the PTI government. 


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49 comments:

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.

Anonymous said...

Unemployment is not an issue - there is enough job in BJP IT cell. Even if lack of clean water and sanitation, there is cheap cell phone plans and youth in India can find solace in lies/hate/propaganda against Muslims

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...

Subramanian Swamy slams Modi for failing to achieve economic growth

https://telanganatoday.com/subramanian-swamy-slams-modi-for-failing-to-achieve-economic-growth


Hyderabad: BJP Rajya Sabha MP Subramanian Swamy on Tuesday lashed out at Prime Minister Narendra Modi for the latter’s failure to achieve targets of economic growth. Terming Modi ‘clueless’ about China, he felt that the national security has also weakened hugely.

“In 8 years in office we see that Modi has failed to achieve targets of economic growth. On the contrary, growth rate has declined annually since 2016. National security has weakened hugely. Modi inexplicably is clueless about China. There is scope to recover but does he know how? (sic)” he tweeted.

Subramanian Swamy’s latest attack on Modi came amidst mew report on the soaring inflation. India’s annual wholesale price-based inflation increased to a record 14.55% in March from 13.11% in February. He also criticised Modi even on China policy. He vehemently disagreed with the Prime Minister for the latter’s claims that China did not occupy Indian territory on eastern Ladakh in the Galwan valley.

When a netizen asked him why he was not advising the Prime Minister, Swamy replied, “Ancient rishis have advised that knowledge should be parted to those who have shradhha to receive it. (sic)”

The BJP Parliamentarian who is known for ‘calling a spade a spade’ as well as his wit, also differed with one of the Modi supporters who said that there was no better alternative to the current Prime Minister. Responding to him, Swamy said, “That is what the British Imperialist said: India will fall apart if British left.”


Riaz Haq said...

Eight-Hour #Power #Blackouts Hit #India After Hottest March on Record. #Coal shortage threatens to exacerbate #energy, #food #inflation. Nomura warns of ‘stagflationary shock,’ drop in factory output. #Modi #BJP #Hindutva #economy #Loadshedding https://www.bloomberg.com/news/articles/2022-04-21/eight-hour-blackouts-hit-india-after-hottest-march-since-1901

Riaz Haq said...

"Anti-Minority" Image Will Hurt #Indian Companies, Warns Ex RBI Gov Raghu Rajan the day after #bulldozers tore down #Muslim homes & businesses close to a #mosque in #Delhi's Jahangirpuri area. #Modi #BJP #Islamophobia #Hindutva #genocide https://www.ndtv.com/india-news/anti-minority-image-will-hurt-indian-companies-warns-raghuram-rajan-2908962 via @ndtv

Amid concerns over minorities being targeted in India, former Reserve Bank governor Raghuram Rajan on Thursday cautioned that an 'anti-minority' image for the country can lead to loss of market for Indian products and may also result in foreign governments perceiving the nation as an unreliable partner.
India enters the perception battle from a position of strength, the professor at Chicago's Booth School of Business said, alluding to credentials like democracy and secularism, but warned that this battle is "ours to lose".

The comments came a day after bulldozers tore down several concrete and temporary structures close to a mosque in Jahangirpuri as part of an anti-encroachment drive, days after the northwest Delhi neighbourhood was rocked by communal violence.

Speaking at the Times Network India Economic Conclave, Rajan said, "If we are seen as a democracy treating all our citizens respectfully, and, you know, relatively poor country, we become much more sympathetic. (Consumers say) 'I am buying this stuff from this country which is trying to do the right thing', and therefore, our markets grow."

He added that it is not just consumers who make such choices over whom to patronise, but warmth in international relations too is decided by such perceptions, as governments take a call on whether a country is a "reliable partner" or not, based on how it handles its minorities.

The outspoken academic added that China has been suffering from such image problems because of its treatment of Uighurs and to an extent the Tibetans as well, while Ukraine has seen huge support because President Volodymyr Zelenskyy is seen as someone standing up to defend ideas that a democratic world believes in.

The services sector export presents a large opportunity for Indians and the country will have to seize it, Rajan said, adding that we need to be very conscious of the West's sensitivities on privacy.

One of the opportunities which can be leveraged is in the medical sector, Rajan said, warning that being perceived as a country which does not satisfy data security and privacy concerns can make it difficult to succeed.

He also said undermining the constitutional authorities like the Election Commission, Enforcement Directorate or the Central Bureau of Investigation (CBI) erodes the democratic character of our country.

In other comments on domestic affairs, Rajan said the Indian administration will have to grapple with the challenges of governance by discussing changes with key stakeholders to avoid instances like the three farm laws. The three legislations were repealed last year after protests by farmers.

Meanwhile, Union Minister of State for Information Technology, Rajeev Chandrasekhar, who also spoke at the event, blamed IT companies for poor planning, saying this lack of foresight has led to wage inflation in the over USD 230 billion sector.

He also said getting high-quality connectivity to every corner through both wired and wireless connectivity is a policy priority and the ministry is working towards the same.

Riaz Haq said...

#Indian lawmaker arrested after tweet criticizing Narendra #Modi. Jignesh Mevani accused prime minister of idolizing Nathuram Godse, killer of Mahatma #Gandhi. #Hindutva #BJP #Islamophobia #India #RSS https://www.theguardian.com/world/2022/apr/22/indian-lawmaker-arrested-after-tweet-criticising-narendra-modi?CMP=share_btn_tw

A state lawmaker in India was arrested for criticising the prime minister, Narendra Modi, in a tweet, officials have said, raising concerns over freedom of speech in the world’s largest democracy.

His arrest coincided with the arrival of the British prime minister, Boris Johnson, in the country.

Jignesh Mevani, a prominent campaigner for India’s marginalised low-caste Dalit community, accused the Hindu nationalist leader of idolising Nathuram Godse, the assassin of India’s independence icon Mahatma Gandhi.

Some fringes of the Indian rightwing revere Godse as a hero for killing the man they blame for the partition of India and Pakistan – comments that Modi has criticised in the past.

But Mevani tweeted this week that Modi “worships and considers Godse as God”, accusing the prime minister of fomenting religious division.

He also demanded that Modi apologise for communal violence in Gujarat, where Mevani is a member of the state legislature.

He was arrested on Thursday on accusations of attempting to disturb “public tranquillity and peace”, the police said.

He was taken across the country to Assam in India’s north-east, where the complaint had been filed, and a court in Kokrajhar denied him bail, ordering him to be held in custody for three days.

Freedom of speech is enshrined in India’s constitution and Mevani’s lawyers called the arrest “illegal” and “unconstitutional”.

The tweet in question has been taken down by Twitter in India after a legal complaint.

The police have previously arrested social media users for “provocative” tweets that were critical of Modi or the rightwing government, sparking fears that the government was crushing dissent.

Mevani is believed to be the first elected politician detained on such grounds.

The activist-politician is a vocal critic of Modi’s right-wing politics and rose to national prominence after launching a protest campaign over the flogging of seven Dalits by cow vigilantes – zealots who target Muslims and Dalits to protect the bovines sacred to many Hindus.

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Sectarian violence and rightwing Hindu vigilantism have increased since Modi came to power in 2014, and critics allege the popular leader’s reluctance to condemn radical elements is emboldening them.


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More than a dozen Indian states have witnessed violent clashes between Hindus and Muslims over the past two weeks, with one person killed in Gujarat.

In the capital, Delhi, bulldozers have demolished the homes of Muslims accused of rioting.

Riaz Haq said...

"India Has Its Own Problems": Joe Biden's Side Note On Dictatorships. #Biden clubbed #India in the sentence, which also mentioned #dictatorships. #Russia #China #Modi #BJP #Hindutva #Islamophobia https://www.ndtv.com/india-news/in-joe-bidens-point-about-autocrats-dictatorships-a-comment-on-india-2912788 via @ndtv

US President Joe Biden spoke about things that "autocrats fear most" at a fundraising event in the United States on Friday. What stood out was the fact that he clubbed India in the sentence, which also mentioned dictatorships.
Joe Biden also spoke about China's Xi Jinping and Russia's Vladimir Putin. On China, he recalled how Xi Jinping once complained to him about the Quad alliance working in the Indo-Pacific in a way that is "against China".

On Putin, Joe Biden said how the Russian leader got "exactly what he didn't want" as "Finland and Sweden too now want to join NATO".

"I indicated to Xi Jinping that I was going to pull together the Quad: Australia, India, Japan, and the United States. He said, 'You're just doing that to affect us.' I said, 'No, it's because we're trying to put together those folks who have an opportunity to work together in the Indo-Pacific'," Biden said during a party fundraiser event at a private residence in Seattle.

"The point being that one of the things that the autocrats fear the most -- and India has its own problems; all those countries have their own problems -- is the notion that somehow we can work together in concert and contrary to what are essentially dictatorships, which a lot of countries have become, particularly not only China but Russia and many other countries...the Philippines," he said.


Joe Biden said when he got elected, Russian president Vladimir Putin thought that he would easily be able to break up NATO. "That's what part of his objective was from the very beginning. And I know I've been saying that for eight years, but it was part of his objective," he said.

"But the irony of all ironies to this...he got exactly what he didn't want. He was looking for the further Finlandisation of Europe. Instead, he got Finland and the President of Finland calling, wanting to see me, wanting to join NATO, and Sweden wanting to join NATO. His action is generating exactly the opposite of what he intended," Biden said.

"I'm not suggesting that that makes things all that easier. But the point is that we have a circumstance where the Ukrainian people are incredibly brave; they're incredibly resolved, not just the military that was trained but the people in the streets," he said.

"They are making a lie of Putin's theory that somehow because they're Slavic in background and many spoke Russian that somehow there would be a welcoming party. The exact opposite has happened," he added.

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.

Anonymous said...

Dear Sir

The justifications which Indians give about such unemployment in India is that they have huge population so it is not easy to accommodate every Indian at work . Sir what are your views on this justifications of Indians ?

Ahmed said...

Dear Sir

Indians justify their unemployment by saying that they have huge population so it is not easy to accommodate every Indian at work. What are your views about this justifications of Indians ?

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 #Muslims mark #Eid under attacks. #Islamophobia & attacks have surged across the country, including stone throwing during religious processions & subsequent demolitions by authorities of a number of properties belonging mostly to Muslims. #Modi
https://apnews.com/article/covid-health-lifestyle-prayer-eid-al-fitr-56f297b2c587c335f6a1eeb40c25d10c

SRINAGAR, India (AP) — Muslims across India marked Eid al-Fitr on Tuesday by offering prayers outside mosques, with the celebrations this year following a series of attacks against the religious minority during the month of Ramadan.

“We will not have the same kind of festivity” this year, said Mohammad Habeeb ur Rehman, a civil engineer in India’s financial capital, Mumbai. “This is the most painful Eid with the worst memories for Indian Muslims.”

Anti-Muslim sentiment and attacks have surged across the country in the last month, including stone throwing between Hindu and Muslim groups during religious processions and subsequent demolitions by authorities of a number of properties belonging mostly to Muslims.

The community, which makes up 14% of India’s 1.4 billion population, is reeling from vilification by hard-line Hindu nationalists who have long espoused an anti-Muslim stance. Some leaders of India’s ruling Hindu nationalist Bharatiya Janata Party have tacitly supported the violence, while Prime Minister Narendra Modi has so far been silent about it.

Eid al-Fitr is typically marked with communal prayers, celebratory gatherings around festive meals, and new clothes, but celebrations in India for the past two years have been marred by COVID-19 restrictions.

In the Indian-controlled portion of disputed Kashmir, the Muslim festival has been subdued for the past three years because of an unprecedented military lockdown after India stripped the region’s semi-autonomy in 2019, followed by the pandemic. The region also saw a rise in violence during Ramadan, with at least 20 militants, two civilians and five police and soldiers killed.

“As we prepare to celebrate Eid, a strong sense of collective loss jars at us,” said Bashir Ahmed, a businessman in Srinagar.

A violent insurgency against Indian rule in the Muslim-majority region and New Delhi’s brutal response have raged for over three decades. Tens of thousands of people have died in the conflict.

In India’s capital, New Delhi, hundreds assembled in the Jama Masjid, one of the country’s largest mosques, to offer Eid prayers there for the first time in over two years due to pandemic restrictions. Families came together early Tuesday morning and many people shared hugs and wishes.

Mohammed Hamid, a software engineer, said he was grateful to be offering prayers at the mosque again.

“It’s a good feeling because there was a lockdown for the past two years. With the grace of God, we are able to offer Eid prayers here with the children and we are thankful,” Hamid said.

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...

Cause of concern! Bank credit to manufacturing declines
Bank credit to 10 out of the 15 sectors declined in the last decade, an analysis by MVIRDC World Trade Centre (WTC) Mumbai shows.
By JOE MATHEW,  May 5, 2022 3 min read

https://www.fortuneindia.com/macro/cause-of-concern-bank-credit-to-manufacturing-declines/108032
The share of manufacturing sector in the total non-food bank credit declined from 24% to 13.5% in the last decade (2011-12 to 2020-21) due to banks' shift towards lending to personal loans, infrastructure, weaker sections and services sectors, an analysis by MVIRDC World Trade Centre (WTC) Mumbai shows. The outstanding bank credit to the manufacturing sector as a share of manufacturing GDP also declined from 16% in 2011-12 to 13% by 2020-21, it points out.

The analysis, based on Reserve Bank of India (RBI) data, also shows that bank credit to 10 out of the 15 sectors declined as a share of total bank credit. This includes sectors such as base metals, textiles, chemicals, food processing, engineering, automobiles and gems & jewellery.

Noting that the decline in bank credit exposure to manufacturing sector is also reflected in the slow growth in manufacturing investment in the country, WTC analysis says that gross capital formation (a proxy for investment in the economy) has grown at a tepid pace of 2% CAGR in the manufacturing sector during the last 10 years from 2011-12 to 2020-21, compared to a growth of 6% in overall investment in the economy. "The share of manufacturing in India's gross capital formation also shrunk from 17.2% in 2011-12 to 14.36% in 2020-21. On the other hand, sectors such as transport, storage, communication, trade repair, hotels and other services witnessed growth in their share of total capital formation in the economy," it says.

"The stagnancy in bank credit exposure to these core manufacturing sectors does not bode well for our Make in India and Aatmanirbhar program. It is welcome that the share of personal loans, credit to weaker sections and credit to the services sectors have been growing in the overall bank credit. At the same time, we need to promote bank lending to manufacturing sectors, especially in labour intensive segments such as leather, textile, food processing to prevent a situation of jobless growth," Vijay Kalantri, chairman at MVIRDC WTC Mumbai, says.

The analysis notes that in the last 13 years since 2008, the share of personal loans in total bank credit grew from 23% to 27%, while the corresponding figure for credit to weaker sections has grown from 4.8% to 7.5%. Similarly, the infrastructure sector witnessed higher share in overall non food credit, up from 9.3% to 10.2%. The WTC report says that as the central government establishes a dedicated financing institution for the infrastructure sector and as asset monetisation pipeline is implemented effectively, the burden of infrastructure financing on banks will reduce, which in turn may enable banks to focus more on funding to the manufacturing sector.


Riaz Haq said...

Sidharth Bhatia (India)
@bombaywallah
A banker friend, a strong supporter of the present regime, said last night, we (India) will be worse than Sri Lanka in five years. Not one economic indicator is doing well or is likely to improve, he said. "I'm not an alarmist, I'm just scared."

https://twitter.com/bombaywallah/status/1522820409971949568?s=20&t=hanYQlF0vOmpK0YYUDXofQ

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...

#Indian Rupee dropped 51 paise to an all-time low of 77.41, surpassing the previous low of 76.98 in March. #INR has been staggering since the beginning of the year. Foreign funds have pulled out $17.7 billion from Indian stock market this year already. https://www.businesstoday.in/latest/economy/story/rupee-hits-all-time-low-heres-how-it-may-impact-your-life-332831-2022-05-09

https://twitter.com/haqsmusings/status/1523714595122147329?s=20&t=6rTiyW9ZU8LVQb2TvTAD2Q

Rupee hit an all-time low against the US Dollar on Monday, bringing further bad news for the economy that is already reeling under high inflation. The Rupee dropped 51 paise to an all-time low of 77.41, surpassing the previous low of 76.98 in March.


The Rupee has been staggering since the beginning of the year. Foreign funds have pulled out $17.7 billion from Indian equities this year already.

Sharat Chandra, Vice President of Research and Development, Earth ID, said that taming inflation will be an uphill task in such a scenario. However, Heena Naik- Research Analyst - Currency, Angel One Ltd was more optimistic about the depreciating Rupee.

“This negative trend in Rupee is temporary as markets are expected to be braced by IPO-related inflows which shall provide support to the Indian Rupee,” said Naik.

Chandra, however said, "The depreciating Yuan has led to the fall of many Asian and emerging market currencies, but the Indian rupee hitting new lows is worrisome for the economy because India, one of the biggest importers of crude oil, is more vulnerable to rising crude oil prices. This would also increase the trade deficit resulting in an expected current account deficit of 3 per cent and impacting the balance of payments. RBI's data suggests that India's current account deficit (CAD) increased to US$ 23.0 billion (2.7 per cent of GDP) in Q3:2021-22 from US$ 9.9 billion. In this context, taming inflation is going to be an uphill task for RBI. High-interest rates may force Indian businesses to cut down on capital expenditure."

How it will impact your life

The depreciating Rupee is likely to have a direct impact on your spendings.

Imports: Importers need to buy Dollars to pay for imported items. With the dip in Rupee, importing items will get more expensive. Oil imports will get costlier, which can directly impact consumers.

Additionally, other imported items as well as components are also likely to get costlier, which will increase the prices for consumers. This means that cars and appliances are likely to get expensive.

Escalating prices might accelerate inflation, which is already high currently.

Loans: There is likely to be an indirect impact on loans. As Rupee depreciates, import prices go up, making items and commodities more expensive. This pushes inflation. Now, with rising inflation, RBI resorts to altering the repo rate – which has already been hiked by 40 bps to 4.40 per cent. High repo rates means banks increase their lending rates, making EMIs costlier. Banks have already increased their loan rates.

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.

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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.

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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

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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)

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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)

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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)

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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...

The world has been hit with a double whammy - on one hand there is a recessionary trend with demand falling, at the same time prices are going up. Central banks around the world took inflation too lightly, says Swaminathan Aiyar. Stagflation signs are around. While we (India) may not collapse like Sri Lanka or Pakistan but we are certainly in trouble, he believes.

https://economictimes.indiatimes.com/news/economy/policy/india-wont-collapse-like-sri-lanka-or-pakistan-but-we-are-certainly-in-trouble-swaminathan-aiyar/articleshow/91685298.cms

We are at highest rate of inflation in years. The wholesale price index for April had just come in at 15.05%. The consumer price index 7.8%. These are extraordinarily high rates and there is nothing special about India. In America where the target inflation is 2% their latest inflation rate 8.5%, it came down a little to 8.3%. So there is global inflation.

Prices of commodities, services, manufacturing - have been soaring in the last 12 months. The inflation began in 2021 and the Ukraine war has accelerated it. The world is caught in a huge inflationary trap right now . The physical shortage of a large number of commodities has been building up over time, and over and above that came the shock of war and the sanctions imposed on Russia, which is an important supplier of number of items. The Black Sea, which is one of the greatest supply routes out of Russia and Ukraine, has been blocked by the war.

On top of everything else China has committed a kind of hara-kiri by having a complete lockdown in an attempt to stomp out COVID - so there is a separate supply shock because there is no production going on in China. These different strands have all come together for a gigantic shock.

We are in a situation where on the one hand there is a recessionary trend, recession is coming because demand is falling, at the same time prices are going up. Some people call this stagflation.

In the case of India we have been hit both ways. We were expecting this to be a very good year for growth. The World Bank, IMF had said India would be the fastest growing major country, and perhaps that will still be the case but earlier they were hoping for 9% growth or things like that, now people say maybe 7%, 7.5%, maybe 6%. So, we are in a tough position right now with inflation is rising fast because inflation is rising everywhere else in the world and because of that we cannot escape it alone and the downtrend, the recessionary trend is also coming the world over and we cannot escape that. We are perhaps better positioned to withstand the problem that some other countries. We will not collapse like Sri Lanka or Pakistan but we are certainly in trouble

Riaz Haq said...

We (India) may not collapse like Sri Lanka or Pakistan but we are certainly in trouble, he (Swaminatham Aiyar) believes.

https://economictimes.indiatimes.com/news/economy/policy/india-wont-collapse-like-sri-lanka-or-pakistan-but-we-are-certainly-in-trouble-swaminathan-aiyar/articleshow/91685298.cms

Do you think the situation is under control. Can central banks control inflation just by raising the rates?
Raising interest rates is not going to solve the supply problem. Raising interest rates is a way of-- if there is an overheated economy with too much demand then you can say I want to slow down that demand by raising interest rates and making it difficult for people to buy but that is not the case today. India does not have an overheated economy where there is too much demand, in fact there is not enough. Take a look at the India Inc earnings - the auto sector is not in good shape, demand is low and so production is also being affected.

There is a shortage in areas like metals but even there the prices have come down very sharply. So right now, the problem of inflation cannot easily be solved by tightening the interest rates. It can be tightened in some cases, the government is trying to do it in the case of wheat by putting an export ban. If you look at the world price of wheat it costs about Rs 40 a kilo and if we freely allow the export of wheat and all our surplus buffer stocks we can have a huge export boom but then if the Indian price equates with the world price at Rs 40 a kilo there will be mayhem and there will be riots on the streets so the government has tried to do supply management by saying we will stop all exports of wheat.

This I think was a bad move, I mean it should have been more gradual and they should be allowing some exports but right now that is one thing that they can do. They have put a ban to improve the supply of wheat and this can help to reduce inflation on that front. Beyond that you will have to live with the global trends, you cannot wish away the global trends and just as Indonesia has put this restriction on edible oil, we are a very large importer of edible oil we are going to suffer.

The government up to a point can reduce import or excise duties on commodities like edible oil, crude oil, petrol, diesel - but all this would be limited amount of relief. It is not the case that prices will come down but you can you can limit the extent to which the prices rises beyond that you will have to wait for this war to play out and for this business cycle to play out, those are items beyond your control.

What do you think is the best course of action for the RBI now?
Central banks around the world, including the RBI, were too relaxed about inflation. They kept thinking this is some temporary delaying it will go away. Then they thought that some increase has taken place last year it will go away then they thought no, then when the war came then again people thought that this may be just temporary, there will be a quick solution to the war.

There is no quick solution to the war and it has now become very clear that inflation has gone out of control compared with what you expected it to be.

In America the target is 2% and it went to 3-4% they said you know okay it could come down again instead it has gone to 5%, 6%, 7%, 8%, 8.5% so panic has broken out there and they are tightening and tightening. The RBI cannot afford to be left out and therefore the RBI has been reluctant to raise interest rates but when everybody else is doing it they say we will have to do so because if we do not do so there can be an attack on the rupee.

You cannot have a situation where everybody else just raising the interest rates and India is not, if you do that huge amount of money can flow out of India so because of that the RBI reluctantly is increasing its rates and will continue to raise its rates there is no option and apart from protect any our foreign exchange reserves it will also help tame inflation up to a point.

Riaz Haq said...

Autonomous Hindutva could devour both India and the Bharatiya Janata Party
In a formally secular India, religion indeed seems to have become the opium of the people, a mass distraction from the transformative social agenda that the country needs

Last Updated at May 23, 2022 09:46 IST


Bharat Bhushan

https://www.business-standard.com/article/opinion/autonomous-hindtuva-could-devour-both-india-and-the-bharatiya-janata-party-122052300133_1.html

With the rapid radicalisation of sections of Hindu society, the Hindutva project has become dangerously autonomous. It is no longer possible to see it only as an electoral strategy of the Bharatiya Janata Party (BJP). Today one does not need to even presume the direct hand of the BJP or the Rashtriya Swayamsevak Sangh behind Hindutva’s every move.

Its exponential social growth may have placed it beyond their control. In a formally secular India, religion indeed seems to have become the opium of the people. When Marx described religion as “the sigh of the oppressed ...

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…


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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...

Tesla won’t set up manufacturing plant in India until allowed to first sell and service cars, Elon Musk says

https://techcrunch.com/2022/05/27/tesla-wont-set-up-manufacturing-plant-in-india-until-allowed-to-first-sell-and-service-cars-elon-musk-says/

Tesla won’t set up a manufacturing plant in India until it is first allowed to sell and service imported cars in the South Asian nation, the carmaker’s chief executive Elon Musk said Friday, more than a year after an Indian state said that the electric carmaker was planning to open a plant in the southern part of the country.

Responding to an individual on Twitter, who had asked for an update on Tesla’s manufacturing plant in India, Musk responded, “Tesla will not put a manufacturing plant in any location where we are not allowed first to sell & service cars.”

Tesla and the Indian government have been engaging for more than two years to evaluate a pathway for the electric carmaker to enter the world’s second most populous nation but are stuck in a deadlock.


The Indian government has insisted that Tesla commits to opening a manufacturing plant in the country, so that it can assemble cars locally in the nation, and follow high import duties until it does if it wishes to sell its vehicles.

The U.S. firm, on the other hand, is seeking lower import taxes in India so it can first test the market by selling cheaper imported electric vehicles before committing to a manufacturing base.

Tesla incorporated a subsidiary in India early last year and registered an office in the city of Bengaluru in Karnataka. The Southern Indian state of Karnataka said shortly afterwards that Tesla “will be opening an electric car manufacturing unit in Karnataka.”

But the two are now at a standstill.

“If Elon Musk is ready to manufacture Tesla in India, then there is no problem,” India’s Road Transport Minister Nitin Gadkari said at an event last month. But manufacturing cars in China and selling them in India is not a “good proposition,” he added.


Several global brands, including Mercedes-Benz, BMW, Toyota and Hyundai have expanded their businesses in India in recent years.

In a tweet earlier this year, Musk said that Tesla was “still working through a lot of challenges with the government.” Audi has expressed similar concerns.

Several Tesla executives in India were recently reassigned to focus on Indonesia and other Asian countries, newspaper Economic Times reported earlier this month.

In a separate tweet, Musk disclosed to another user that SpaceX was waiting for approval from the Indian government for launching Starlink in India.


The company had hired Sanjay Bhargava, a former PayPal executive, to lead Starlink’s operations in India last year. He said that the firm, which had briefly started taking pre-orders in India, planned to deploy more than 200,000 active terminals in over 160,000 districts in India by the end of December 2022.

Bhargava stepped down from his role weeks after New Delhi ordered the SpaceX division to stop taking orders for the devices, as it doesn’t have the license to operate in the South Asian market.

Riaz Haq said...

Kaushik Basu
@kaushikcbasu
One picture that sums up India’s biggest problem: youth unemployment. Sadly this is getting little policy attention. It can do lasting damage to the economy. We must shift focus from politics to correcting this.

https://twitter.com/kaushikcbasu/status/1530375519186915329?s=20&t=MA2l49YxA18VDmSg-kcDvw

--------

Youth (ages15-24) #unemployment in #India is 24.9%, the highest in #SouthAsia region. #Bangladesh 14.8%, #Pakistan 9.2%. Source: International Labor Organization & World Bank https://data.worldbank.org/indicator/SL.UEM.1524.ZS?locations=PK-IN-BD

https://twitter.com/haqsmusings/status/1530565654616477696?s=20&t=MA2l49YxA18VDmSg-kcDvw

Riaz Haq said...

Kaushik Basu
@kaushikcbasu
One picture that sums up India’s biggest problem: youth unemployment. Sadly this is getting little policy attention. It can do lasting damage to the economy. We must shift focus from politics to correcting this.

https://twitter.com/kaushikcbasu/status/1530375519186915329?s=20&t=MA2l49YxA18VDmSg-kcDvw

--------

Youth (ages15-24) #unemployment in #India is 24.9%, the highest in #SouthAsia region. #Bangladesh 14.8%, #Pakistan 9.2%. Source: International Labor Organization & World Bank https://data.worldbank.org/indicator/SL.UEM.1524.ZS?locations=PK-IN-BD

https://twitter.com/haqsmusings/status/1530565654616477696?s=20&t=MA2l49YxA18VDmSg-kcDvw

Riaz Haq said...

Elon Musk won't manufacture Tesla cars in India because government prohibits selling and servicing of EVs
Indian leaders have made multiple failed appeals for Musk to bring Tesla to India

https://www.foxbusiness.com/economy/elon-musk-manufacture-tesla-cars-india-government


Tesla CEO Elon Musk said the company will not manufacture cars in India if the country does not allow it to sell and service its electric vehicles.

When asked by a Twitter user Friday if Tesla would be manufacturing a plant in India in the future, Musk said the move cannot happen under the country's current rules.

"Tesla will not put a manufacturing plant in any location where we are not allowed first to sell & service cars," Musk tweeted.

The team Musk hired in India last year has since been instructed to focus on the Middle East and the larger Asia-Pacific markets.


Musk's comments come as the Indian government has yet to accept his demand to reduce import duties on Tesla cars.

Indian leaders have made multiple failed appeals for Musk to bring Tesla to India.

"Our request to him is to come to India and manufacture here. We have no problems. The vendors are available, we offer all kinds of technology and because of that, Musk can reduce the cost," Road Transport and Highways Minister Nitin Gadkari said during the Raisina Dialogue 2022 conference last month, according to TribuneIndia.com.


"India is a huge market and offers good export opportunities too. Musk can export Tesla cars from India," he added.

Gadkari said in February that Musk must first manufacture in India before Tesla cars can be driven on the roads.

Musk had tweeted in January that he could not release Tesla vehicles in India yet due to "challenges with the government." And last summer, the billionaire posted to Twitter that he would like to launch Teslas in India, but the country's import duties are "the highest in the world by far of any large country."

India currently levies a 100% tax on imported vehicles costing more than $40,000, inclusive of insurance and shipping expenses. Cars that cost less than $40,000 face a 60% import tax.

Musk also said on Twitter Friday that SpaceX is waiting on approval from the Indian government to provide the company's Starlink satellite internet to the south Asian country.

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...

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

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.

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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.

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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 World-Beating Growth Isn’t Creating #Jobs. #Unemployment rate is hovering around 7% or 8%, up from about 5% five years ago. The labor force participation rate has dropped to just 40% of the 900 million #Indians of legal age. #Modi #BJP #Hindutva

https://www.bloomberg.com/news/articles/2022-07-15/why-india-s-world-beating-growth-isn-t-creating-jobs-quicktake#xj4y7vzkg


No other major economy has been expanding as fast as India lately, beating both China and the US. But beyond the headlines lies the grim reality of rising unemployment. The nation of 1.4 billion people isn’t creating enough jobs for its growing workforce, despite campaign promises by Prime Minister Narendra Modi to make it a priority. Output is increasing as a result of pandemic-related government spending while the private sector sits on the fence, deterred by dim conditions for new investment. Meanwhile, pandemic-related disruptions and rising inflation are making it harder for everyone to get by. Tensions boiled over in June when angry youth facing bleak job prospects blocked rail traffic and highways in many states for days, even setting some trains on fire.

The unemployment rate in India has been hovering around 7% or 8%, up from about 5% five years ago, according to the Centre for Monitoring Indian Economy, a private research firm. At the same time, the workforce shrank as millions of people dejected over weak job prospects pulled out, a situation that was exacerbated by Covid-19 lockdowns. The labor force participation rate -- meaning people who are working or looking for work -- has dropped to just 40% of the 900 million Indians of legal age, from 46% six years ago, according to the CMIE. By comparison, the participation rate in the US was 62.2% in June.

Riaz Haq said...

#India’s #Employment Rate in June Lowest in Last One Year, Says CMIE. Employment shrank by 13 mln, including 10 mln staying out
Shrinkage entirely in rural areas, should improve with monsoon - Bloomberg

https://www.bloomberg.com/news/articles/2022-07-05/june-employment-lowest-in-last-one-year-cmie-s-vyas

India’s labor market showed fresh signs of weakness in June, with the employment rate falling to its lowest in two years, as patchy monsoon rains may have delayed deployment of agricultural workers in rural areas, the head of a private research firm said.

Writing in the Business Standard newspaper on Tuesday, Mahesh Vyas, who is chief executive officer at the Centre for Monitoring Indian Economy Pvt, said the employment rate fell to 35.8% in June, from 37.07% in May. The jobless rate climbed to 7.8% of the total workforce in June, from 7.1% in May.

The rise in the jobless rate was entirely led by a rise in rural unemployment, data showed. The unemployment rate in rural India increased to 8.03% from 6.62% in May, while in urban areas, the jobless rate eased to 7.30% in June from 8.21% a month ago.

Overall, employment shrank by 13 million to 390 million in June, against a gain of 8 million jobs in April and May, Vyas said. While around 13 million jobs were lost during the month, the count of the unemployed increased by only 3 million as the rest exited the labor force, Vyas wrote.

This shrinkage brought down labor force participation rate to 38.8%, against 40% in the preceding two months. While this drop in employment and an equally sharp deterioration in other labor market ratios were alarming, the jobs picture was not completely dire across the country, Vyas wrote.

He said that since monsoon rains were 32% below normal last month, it could have “slowed the deployment of labor into the fields.” Labor participation may improve as rainfall picks up in coming weeks, he added.

The agriculture sector shed nearly 8 million jobs in June, mostly connected to plantations, while crop cultivation added 4 million jobs, according to Vyas.

The data also pointed toward growing vulnerabilities for salaried workers with 2.5 million losing their jobs in June. The government shrunk the demand for armed forces while opportunities in private equity-funded new-world jobs have also started to shrink, Vyas wrote.

Riaz Haq said...

Kaushik Basu
@kaushikcbasu
India’s unemployment rate in August shot up to 8.3%. This is the highest in 12 months, according to CMIE data. This is causing extra hardship because it is happening amidst high inflation. This is where we need to focus all policy attention.

https://twitter.com/kaushikcbasu/status/1565898149415321603?s=20&t=j5lmShMm_PAikFk2kK1JhQ

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https://unemploymentinindia.cmie.com/

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India's unemployment rate surged to a one-year high of 8.3 per cent in August as employment sequentially fell by 2 million to 394.6 million, according to data from the Centre for Monitoring Indian Economy (CMIE).

During July, the unemployment rate was at 6.8 per cent and the employment was 397 million, the CMIE data added.

"The urban unemployment rate is usually higher at about 8 per cent than the rural unemployment rate, which is usually around 7 per cent. In August the urban unemployment rate shot up to 9.6 per cent and rural unemployment rate also increased to 7.7 per cent," CMIE managing director Mahesh Vyas told PTI.

Vyas further stated that erratic rainfall affected sowing activities and this is one of the reasons for the increase in unemployment in rural India.

The unemployment rate in rural India rose from 6.1 per cent in July to 7.7 per cent in August. More importantly, the employment rate fell from 37.6 per cent to 37.3 per cent.

"Going forward, the rural unemployment rate may come down as delayed monsoon will increase agricultural activities towards the end of the monsoon season. However, it is not clear how the urban unemployment rate will play out in the coming months. Currently, it is quite elevated," Vyas added.

During August, the unemployment was the highest in Haryana at 37.3 per cent followed by Jammu and Kashmir at 32.8 per cent, Rajasthan at 31.4 per cent, Jharkhand at 17.3 per cent and Tripura at 16.3 per cent, according to the data.

While the unemployment was the lowest in Chhattisgarh at 0.4 per cent followed by Meghalaya at 2 per cent, Maharashtra at 2.2 per cent and Gujarat and Odisha at 2.6 per cent each, the data showed.

https://www.business-standard.com/article/current-affairs/india-s-unemployment-rate-zooms-to-1-year-high-of-8-3-in-aug-cmie-122090101152_1.html

Riaz Haq said...

Kaushik Basu
@kaushikcbasu
Over 2020-22 India's annual GDP growth is 0.43%. This places India in the middle of the world's growth table. What's worrying is that a decade ago India was in the top 3. Also youth unemployment at 28.3% is the highest in decades. So the growth that's happening is all at the top.

https://twitter.com/kaushikcbasu/status/1571866854800461826?s=20&t=P-URklHraQMDwSq2jQguuQ

Riaz Haq said...

India's Economic Situation 'Bleak'; We Know the Issue but Not the Solution: Pronab Sen
In an interview with Karan Thapar, the country's former chief statistician said that India will miss the RBI's target of 7.2% growth for this financial year and that it'll come around 6-6.5%. (real growth going forward will be around 4%)

Pranab Sen: Demonetization and COVID lockdown dried up the informal credit and killed a large percentage of small and medium enterprises.

https://thewire.in/video/watch-indias-economic-situation-bleak-we-know-the-issue-but-not-the-solution-pronab-sen

https://youtu.be/p3avEIThSN8

In an interview where he paints a bleak and disturbing picture of the state of the economy, India’s former chief statistician professor Pronab Sen has said that we can identify the problems that are retarding growth but we don’t know how to tackle them.

Worse, professor Sen says he is not sure if the government has diagnosed the problems because it has not spoken about them and its silence can be variously interpreted. Consequently, he says that India will miss the RBI’s target of 7.2% growth for this financial year and that it will growth will only come in somewhere around 6-6.5%.

However, he points out, in real terms growth will actually be just 4% which, he adds, is at least 2.5% below the growth India needs to create jobs for its population. This means, professor Sen points out, we can boast of being the fastest growing economy but it’s equally true that we are considerably falling short of the rate of growth we need (6.57%) to create sufficient jobs for our people which, in turn, will boost consumption and spending and create incentives for investment.

In these circumstances, professor Sen said that first quarter growth of FY23 at 13.5% is clearly disappointing.

In a 42-minute interview to Karan Thapar for The Wire, professor Sen, who is currently the country director of the International Growth Centre, identified two critical areas where the Indian economy faces serious problems about which we are not sure what we should do.

The first is the MSME sector which, he added, has undoubtedly shrunk in size over the last two years. The problem is not a question of encouraging and helping existing MSMEs so much as creating the environment for new MSMEs to emerge. The specific problem is that the informal credit line on which they depend has dried up and we don’t know how to revive that credit line. The government does not have a clear way of doing so.

And, the problem afflicting MSMEs, professor Sen says, is the reason why manufacturing has only grown year-on-year by 4.8% and why joblessness and unemployment are an increasing concern. Most jobs are created by MSMEs or the wider unorganised sector and that seems to have stopped or, at least, is not happening in sufficient measure.

The second problem professor Sen identified is the critical services sector of trade, hotel, transport, communication and broadcasting services, which represent 30.5% of employment but is still 15.5% below pre-pandemic levels. Once again, he said we don’t know what we need to do to boost this sector back to pre-pandemic levels. He pointed out that many MSMEs work in this sector and its future is, therefore, directly linked to MSMEs.

Professor Sen also pointed out that the global situation will not be of much help to India. Interest rates are likely to remain high and exports, which have been a support to the economy until recently, will face problems in markets like Europe and America and, therefore, fail to provide the boost to growth they have previously given. However, he believes oil prices could come down.

He believes India is clearly locked into a K-shaped recovery and the arms of the K are moving further and further apart.

Whilst scoffing at commentators and newspapers that have called for broad-based reforms, without identifying what they would be, professor Sen said that the key reform needed would be credit lines that would service MSMEs and provide funds for new MSMEs to start up.

Riaz Haq said...

“The poverty in the country is standing like a demon in front of us. It is important that we slay this demon. That 20 crore people are still below poverty line is a figure that should make us very sad. As many as 23 crore people have less than Rs 375 income per day. There are four crore unemployed people in the country. The labour force survey says we have an unemployment rate of 7.6 per cent,” said Dattatreya Hosabale. Also Read - 23 Crore Indians Pushed Below Poverty Line Amid COVID-19 Pandemic, Says Study

https://www.india.com/business/23-cr-people-with-income-less-than-rs-375-day-rss-gen-secy-raises-poverty-unemployment-alarm-5665302/

He also spoke about the rising levels of economic inequality that the country is witnessing today. Acknowledging that India is among the top six economies of the world, he said top 1 per cent holds 1/5th (20 per cent) of the nation’s income. He added that 50 per cent of the country’s population has only 13 per cent of the country’s income. Hosabale went on to quote United Nations’ observations on the poverty and development in India. Also Read - Today Will be Your Last Working Day With Uber: Ride-hailing Firm Lays Off Nearly 3,700 Employees Via Zoom

“A large part of the country still does not have access to clean water and nutritious food. Civil strife and the poor level of education are also a reason for poverty. That is why a New Education Policy has been ushered in. Even climate change is a reason for poverty. And at places the inefficiency of the government is a reason for poverty.”


In his speech, Hosabale also stressed on the importance of creating an entrepreneurship-friendly environment apart from the need to carry skill-training from the urban to rural India.

“During Covid, we learnt that there is a possibility of generating jobs at the rural level according to local needs and using local talent. That is why the Swavalambi Bharat Abhiyan was launched. We don’t just need all-India level schemes, but also local schemes. It can be done in the field of agriculture, skill development, marketing etc. We can revive cottage industry. Similarly, in the field of medicine, a lot of Ayurvedic medicines can be manufactured at the local level. We need to find people interested in self-employment and entrepreneurship,” Hosabale said.