tag:blogger.com,1999:blog-5848640164815342479.post3213708617595985623..comments2024-03-18T16:01:13.871-07:00Comments on Haq's Musings: India in Crisis: Unemployment and Hunger Persist After Waves of COVIDRiaz Haqhttp://www.blogger.com/profile/00522781692886598586noreply@blogger.comBlogger159125tag:blogger.com,1999:blog-5848640164815342479.post-11430229611884426492023-08-15T20:29:59.973-07:002023-08-15T20:29:59.973-07:00Ritesh Kumar Singh
@RiteshEconomist
India's pr...Ritesh Kumar Singh<br />@RiteshEconomist<br />India's premature #deindustrialisation: 12 out of the 23 #manufacturing industries that make up the IIP (Index of Industrial Production) are at levels lower than 7 years ago<br />@moneycontrolcom<br /><br />https://twitter.com/RiteshEconomist/status/1691499535170674698?s=20<br /><br /><br />-----------------<br /><br />India's industrial growth falls to 3.7% in June<br /><br /><br />https://www.moneycontrol.com/europe/?url=https://www.moneycontrol.com/news/business/economy/indias-industrial-growth-falls-to-3-7-in-june-11161921.html#:~:text=At%203.7%20percent%2C%20the%20latest,12.6%20percent%20in%20June%202022.<br /><br /><br /><br />India's industrial output grew by 3.7 percent in June, according to data released by the Ministry of Statistics and Programme Implementation on August 11.<br /><br />At 3.7 percent, the latest industrial growth figure as per the Index of Industrial Production (IIP) is at a three-month low. It is also below the consensus estimate of 5 percent.<br /><br />Industrial growth had come in at 5.2 percent in May - now revised to 5.3 percent - and was 12.6 percent in June 2022.<br /><br />For the first quarter of 2023-24, IIP growth stood at 4.5 percent, down from 12.9 percent in April-June 2022 when the data was boosted by a favourable base effect.<br /><br />Industrial growth in June was dragged down by a weaker increase in the manufacturing output, which rose by 3.1 percent year-on-year compared to 5.8 percent in May.<br /><br />The performance of the manufacturing sector has an outsized impact on the headline industrial growth number as the sector accounts for more than three-fourths of the IIP.<br /><br />While manufacturing output grew at a slower pace, that of mining and electricity rose at a faster clip. In June, mining output rose by 7.6 percent, up from 6.4 percent in May, and electricity production was up 4.2 percent. In May, electricity production was up a mere 0.9 percent.<br /><br />The improved performance of mining and electricity sectors was down the low rainfall in June as drier conditions allow increased mining activity.<br /><br />"IIP growth print in June has disappointed," said Suman Chowdhury, chief economist and head of research at Acuité Ratings & Research.<br /><br />"Clearly, the manufacturing sector has not been able to sustain the growth trend that had been seen in the first two months of the last quarter. The manufacturing output grew only by 3.1 percent and actually saw a sequential contraction of almost 1 percent," Chowdhury added.<br /><br />"Within manufacturing, output in metals exhibited a healthy performance while export-intensive categories such as textiles and wearing apparel continued to remain pressured," noted Rajani Sinha, chief economist at CareEdge.<br /><br />In terms of the use-based classification of goods, there were some big shocks. While production of primary and intermediate good rose at a greater rate in June - 5.2 percent and 4.5 percent, respectively - there were weaknesses in other spheres, with output of consumer durables falling 6.9 percent in June after rising for the for the first time in six months in May.<br /><br />Capital goods' output was up just 2.2 percent - down from 8.1 percent in May - while that of consumer non-durables rose a mere 1.2 percent. in May, it had posted a growth of 8.4 percent.<br /><br />Output of infrastructure goods grew by 11.3 percent - the same as in May.<br /><br />According to Aditi Nayar, ICRA's chief economist, the performance of most high-frequency indicators improved in July relative to June, although there were some laggards in the form of vehicle registrations and finished steel consumption.<br /><br />"Based on these trends, ICRA expects the IIP growth to witness an uptick to 4-6 percent in July," Nayar said.<br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-44837093499403801112023-08-06T19:13:36.554-07:002023-08-06T19:13:36.554-07:00Only a cheaper rupee can spur Indian growth
http...Only a cheaper rupee can spur Indian growth<br /><br /><br />https://www.ft.com/content/c3a28628-5b92-4db7-a8c2-0f41bea05969<br /><br /><br />Elite interest favours a strong currency, to the detriment of the nation<br />ASHOKA MODY<br /><br />Sadly, the nominal depreciation was not enough. According to the Bank for International Settlements, between 1994 and now, India’s domestic costs of export production have risen by about 60 per cent relative to competitors. As a result, the real exchange rate, which determines international competitiveness, has strengthened by 12 per cent. Vietnamese manufactured exports, following the East Asian playbook, are poised to exceed India’s manufactured exports.<br /><br />India’s accumulated cost-of-production disadvantage requires the rupee to drop to about Rs90 per dollar; Rs100 per dollar would provide an ideal cushion. But Indian authorities continue to avoid an activist exchange rate policy, and rely on dodgy policy tools: tax cuts and subsidies for corporate India, tariff barriers to shield inefficient producers and weaker labour protections. Such measures simply make the rich richer, while doing little for low-skilled workers. An exchange value of Rs100 per dollar would temporarily give Indian exports a much-needed boost. The time to act is now.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-74906739839740985782023-08-06T19:13:01.213-07:002023-08-06T19:13:01.213-07:00Only a cheaper rupee can spur Indian growth
http...Only a cheaper rupee can spur Indian growth<br /><br /><br />https://www.ft.com/content/c3a28628-5b92-4db7-a8c2-0f41bea05969<br /><br />Elite interest favours a strong currency, to the detriment of the nation<br />ASHOKA MODY<br /><br /><br />While other Asian policymakers, such as those in South Korea and China, have strategically used sizeable depreciations of their currencies to bolster export competitiveness, Indian elites bemoan every infinitesimal decline in the rupee’s value as a national humiliation. A unique economic and political confluence first entrenched this bogus pride in the country’s psyche in the mid-1960s. And since the 1990s, the country’s corporate leaders and new rich have wanted to maintain a strong rupee. As a result, the country’s export-based growth has suffered, as have jobs for low-skilled workers.<br /><br /><br />India is triply handicapped in exporting manufactured goods: it has a poorly educated workforce, few women in its factories and an overvalued currency. Education and female labour force participation are key to raising productivity, but take years to achieve. Today, only a much cheaper currency — about 100 rupees per dollar rather than the current 82 — can spur Indian exports. It is low-hanging fruit.<br /><br />In a rare sane moment in 1949, a newly independent India devalued the rupee from Rs3.3 to Rs4.8 per dollar, bringing relief to its uncompetitive economy. Indian manufacturers could earn profits even when they lowered dollar sale prices, which helped increase exports. Costlier imports slowed import growth, helping reduce the current-account deficit. But the task was never completed. With low productivity and high inflation, India could not match countries such as Japan in labour-intensive manufactured exports. The World Bank and the IMF financed India’s large current account deficit, creating the illusion that it did not need currency devaluation.<br /><br />When those two institutions finally threatened to stop financing that deficit, the country’s officials foolishly negotiated the rate to Rs7.5 per dollar in June 1966. This too-little-too-late devaluation did not compensate for the rise in domestic production costs. Taiwan and South Korea raced ahead, helped by currency devaluations; Indian exports languished.<br /><br />The perceived failure of the 1966 devaluation to spur exports forever tarnished Indian belief in an activist exchange rate policy. Rather than encouraging more aggressive nominal devaluation to offset the rise in production costs and thus achieve real depreciation, devaluation “by stealth” was always too little, too late. In the 1980s, China used aggressive exchange rate depreciation as key to its monumental export push.<br /><br /><br /><br />India’s 1991 financial crisis was another all too brief moment of sanity. Authorities devalued the rupee in July 1991 and let it float in March 1993. But new forces strengthened the currency. Software exports and remittances from workers in the Middle East had a bolstering effect. More importantly, once global money managers began funding large Indian companies, a strong rupee helped that small elite minimise the costs of repaying international creditors and investors. A strong rupee also helped aspirants to elite status shop for fast cars and handbags, often in Milan and Singapore.<br /><br /><br /><br />Reflecting the national sense of pride and elite preference, political gamesmanship conditioned policymakers to focus on stemming the currency’s decline. In 2013, prime ministerial candidate Narendra Modi bemoaned the fall in the currency, saying: “Our rupee has been admitted into the ICU.” After Modi became prime minister, hot money flowed in and the rupee appreciated briefly. But when it fell again, leaders of the opposition trolled the government by repeating Modi’s phrase: the rupee was in the ICU.<br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-10544616419361734502023-07-22T10:12:15.166-07:002023-07-22T10:12:15.166-07:0072% of MSMEs stagnant since past 5 years: Survey |...72% of MSMEs stagnant since past 5 years: Survey | The Indian Express<br /><br /><br />https://indianexpress.com/article/business/72-percent-of-msmes-stagnant-since-past-5-years-survey-8447589/<br /><br />Over three-fourth of the micro, small and medium enterprises (MSMEs) are of the view that their business remained either stagnant or decreased or wound up during the last five years, a survey said. The survey by industry body Consortium of Indian Associations of 1,08,500 entrepreneurs also stated that 76 per cent of the respondents are not making profit and access to bank finance remains a big issue.<br /><br />“During the last 5 years, the performance of 72% of the respondents is either stagnant or<br />decreasing or stopped or wound up. Only 28% of the respondents have confirmed that they are growing. This is a warning sign. 76% of the respondents have said they are not making a profit,” it said.<br /><br />--------------<br /><br /><br />Jawhar Sircar<br />@jawharsircar<br />Modi’s economics —<br />where Demonetisation destroys MSMEs —<br />who provide 90% of jobs in India.<br />Corporates, esp Cronies make profit —<br />but no jobs are created.<br />Low tax helps corporate — obviously, nothing comes free —<br />which may explain BJP’s money power and godi media support<br /><br />https://twitter.com/jawharsircar/status/1682747158020374528?s=20Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-91233566923942175442023-07-17T18:32:42.127-07:002023-07-17T18:32:42.127-07:00Bhavika Kapoor ✋
@BhavikaKapoor5
𝑷𝒓𝒐𝒑𝒂𝒈𝒂𝒏�...Bhavika Kapoor ✋<br />@BhavikaKapoor5<br />𝑷𝒓𝒐𝒑𝒂𝒈𝒂𝒏𝒅𝒂:<br />- 5th largest economy 🚩<br />- 5 trillon economy 🐄<br /><br />𝑻𝒓𝒖𝒕𝒉:<br />𝗜𝗻𝗱𝗶𝗮'𝘀 𝗦𝗲𝗰𝘁𝗼𝗿𝘀 𝗼𝗳 𝗚𝗗𝗣 𝘁𝗵𝗮𝘁 𝗛𝗮𝘃𝗲 𝗖𝗼𝗻𝘀𝗶𝘀𝘁𝗲𝗻𝘁𝗹𝘆 𝗣𝗲𝗿𝗳𝗼𝗿𝗺𝗲𝗱 𝗣𝗼𝗼𝗿𝗹𝘆 𝗦𝗶𝗻𝗰𝗲 𝟮𝟬𝟭𝟰:<br /><br />𝗠𝗮𝗻𝘂𝗳𝗮𝗰𝘁𝘂𝗿𝗶𝗻𝗴: The manufacturing sector has grown at an average rate of just 3.5% per year since 2014. This is well below the average growth rate of average 6% for the overall economy. The slow growth of the manufacturing sector is a major concern, as it is a key driver of job creation and economic growth. Poor performance of manufacturing in GDP is one of the major reasons of massive unemployment in India<br /><br />𝗜𝗻𝗳𝗿𝗮𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲: The infrastructure sector has also performed poorly in recent years. The growth rate of the infrastructure sector has averaged just 2% per year since 2014. This is below the average growth rate of 6% for the overall economy. The slow growth of the infrastructure sector is a major constraint on economic growth, as it limits the ability of businesses to expand and create jobs.<br /><br />𝗔𝗴𝗿𝗶𝗰𝘂𝗹𝘁𝘂𝗿𝗲: The agriculture sector has also performed poorly in recent years. The growth rate of the agriculture sector has averaged just 2% per year since 2014. This is below the average growth rate of 6% for the overall economy. The slow growth of the agriculture sector is a major concern, as it is a key source of livelihood for millions of Indians.<br /><br />𝗖𝗼𝗻𝘀𝘁𝗿𝘂𝗰𝘁𝗶𝗼𝗻:<br />The construction sector has grown at an average rate of just 2.5% per year since 2014. This is well below the average growth rate of 6% for the overall economy. The slow growth of the construction sector is a major concern, as it is a key driver of job creation (as it gives employment to unskilled workforce too) and economic growth.<br /><br />𝗕𝗮𝗻𝗸𝗶𝗻𝗴 𝗮𝗻𝗱 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗦𝗲𝗿𝘃𝗶𝗰𝗲𝘀:<br />India's banking and financial services sector has faced a multitude of challenges, primarily in the form of non-performing assets (NPAs) and the resulting stress on bank balance sheets. The burden of NPAs, coupled with regulatory issues, limited credit availability, and risk-averse lending practices, has impacted the sector's ability to fuel economic growth. Additionally, the sector has witnessed instances of fraud and mismanagement, eroding investor confidence.<br /><br />𝗣𝗼𝘄𝗲𝗿 𝗮𝗻𝗱 𝗘𝗻𝗲𝗿𝗴𝘆:<br />Despite efforts to improve power generation and distribution, India's power and energy sector has struggled to keep pace with the growing demand. Issues like inadequate infrastructure, transmission losses, fuel supply constraints, and pricing challenges have hampered the sector's progress. The heavy reliance on fossil fuels has also posed environmental challenges, requiring a shift towards cleaner and renewable energy sources.<br /><br />In summary, addressing the above highlighted issues will require a comprehensive approach, involving policy reforms, infrastructure development, skill enhancement, and investment in research and development. However, I don't think Modi government has the talent, vision and political willingness to handle such complex issues.<br /><br />https://twitter.com/BhavikaKapoor5/status/1680910458742767616?s=20Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-42764962886269279652023-07-17T16:45:15.462-07:002023-07-17T16:45:15.462-07:00One-tenth of India's population escaped povert...One-tenth of India's population escaped poverty in 5 years - government report<br />By Manoj Kumar<br /><br />https://www.reuters.com/world/india/one-tenth-indias-population-escaped-poverty-5-years-government-report-2023-07-17/<br /><br /><br />NEW DELHI, July 17 (Reuters) - Nearly 135 million people, around 10% of India's population, escaped poverty in the five years to March 2021, a government report found on Monday.<br /><br />Rural areas saw the strongest fall in poverty, according to the study, which used the United Nations' Multidimensional Poverty Index (MPI), based on 12 indicators such as malnutrition, education and sanitation. If people are deprived in three or more areas, they are identified as "MPI poor."<br /><br />"Improvements in nutrition, years of schooling, sanitation and cooking fuel played a significant role in bringing down poverty," said Suman Bery, vice-chairman of the NITI Aayog, the government think-tank that released the report.<br /><br />The percentage of the population living in poverty fell to 15% in 2019-21 from 25% in 2015/16, according to the report, which was based on the 2019-21 National Family Health Survey.<br /><br />A report by the United Nations Development Programme (UNDP) released last week said the number of people living in multidimensional poverty fell to 16.4% of India's population in 2021 from 55% in 2005.<br /><br />According to UNDP estimates, the number of people, who lived below the $2.15 per day poverty line had declined to 10% in India in 2021.<br /><br />India's federal government offers free food grain to about 800 million people, about 57% of country's 1.4 billion population, while states spend billions of dollars on subsidising education, health, electricity and other services.<br /><br />The state that saw the largest number moving out of poverty was Uttar Pradesh, with 343 million people, followed by the states of Bihar and Madhya Pradesh, according to the report.<br /><br />Reporting by Manoj Kumar; Editing by Conor HumphriesRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-61846815126360694722023-07-12T10:00:43.475-07:002023-07-12T10:00:43.475-07:00In the absence of real data, India's stats are...In the absence of real data, India's stats are all being manufactured by BJP to win elections. <br /><br /><br /><br />Postponing India’s census is terrible for the country<br /><br />But it may suit Narendra Modi just fine<br /><br /><br /><br />https://www.economist.com/asia/2023/01/05/postponing-indias-census-is-terrible-for-the-country<br /><br /><br /><br /><br /><br />Narendra Modi often overstates his achievements. For example, the Hindu-nationalist prime minister’s claim that all Indian villages have been electrified on his watch glosses over the definition: only public buildings and 10% of households need a connection for the village to count as such. And three years after Mr Modi declared India “open-defecation free”, millions of villagers are still purging al fresco. An absence of up-to-date census information makes it harder to check such inflated claims. It is also a disaster for the vast array of policymaking reliant on solid population and development data.<br /><br /><br /><br />----------<br /><br /><br /><br />Three years ago India’s government was scheduled to pose its citizens a long list of basic but important questions. How many people live in your house? What is it made of? Do you have a toilet? A car? An internet connection? The answers would refresh data from the country’s previous census in 2011, which, given India’s rapid development, were wildly out of date. Because of India’s covid-19 lockdown, however, the questions were never asked.<br /><br /><br /><br />Almost three years later, and though India has officially left the pandemic behind, there has been no attempt to reschedule the decennial census. It may not happen until after parliamentary elections in 2024, or at all. Opposition politicians and development experts smell a rat.<br /><br /><br /><br />----------<br /><br /><br /><br />For a while policymakers can tide themselves over with estimates, but eventually these need to be corrected with accurate numbers. “Right now we’re relying on data from the 2011 census, but we know our results will be off by a lot because things have changed so much since then,” says Pronab Sen, a former chairman of the National Statistical Commission who works on the household-consumption survey. And bad data lead to bad policy. A study in 2020 estimated that some 100m people may have missed out on food aid to which they were entitled because the distribution system uses decade-old numbers.<br /><br /><br /><br />Similarly, it is important to know how many children live in an area before building schools and hiring teachers. The educational misfiring caused by the absence of such knowledge is particularly acute in fast-growing cities such as Delhi or Bangalore, says Narayanan Unni, who is advising the government on the census. “We basically don’t know how many people live in these places now, so proper planning for public services is really hard.”<br /><br /><br /><br />The home ministry, which is in charge of the census, continues to blame its postponement on the pandemic, most recently in response to a parliamentary question on December 13th. It said the delay would continue “until further orders”, giving no time-frame for a resumption of data-gathering. Many statisticians and social scientists are mystified by this explanation: it is over a year since India resumed holding elections and other big political events.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-36590417117635635702023-07-03T13:43:08.912-07:002023-07-03T13:43:08.912-07:00Income of poorest fifth plunged 53% in 5 yrs; thos...Income of poorest fifth plunged 53% in 5 yrs; those at top surged | India News,The Indian Express<br /><br />https://indianexpress.com/article/india/income-of-poorest-fifth-plunged-53-in-5-yrs-those-at-top-surged-7738426/<br /><br />In a trend unprecedented since economic liberalisation, the annual income of the poorest 20% of Indian households, constantly rising since 1995, plunged 53% in the pandemic year 2020-21 from their levels in 2015-16. In the same five-year period, the richest 20% saw their annual household income grow 39% reflecting the sharp contrast Covid’s economic impact has had on the bottom of the pyramid and the top.<br /><br /><br />---------------<br /><br /><br />A new survey, which highlights the economic impact of the pandemic on Indian households, found that the income of the poorest 20 percent of the country declined by 53 percent in 2020-21 from that in 2015-16.<br /><br />https://www.thequint.com/news/india/poor-in-india-lose-half-their-income-in-last-5-years-rich-got-richer-survey#read-more<br /><br />The survey, conducted by the People's Research on India's Consumer Economy (PRICE), a Mumbai-based think tank, also shows that in contrast, the same period saw the annual household income of the richest 20 percent grow by 39 percent.<br /><br />Conducted between April and October 2021, the survey covered 20,000 households in the first stage, and 42,000 households in the second stage. It spanned over 120 towns and 800 villages in 100 districts.<br /><br /><br /><br />Income Erosion in All Households Except the Rich Ones<br />The survey indicated that while the poorest 20 percent households witnessed an income erosion of 53 percent, the lower-middle-class saw a 39-percent decline in household income. The income of the middle-class, meanwhile, reduced by 9 percent.<br /><br />However, the upper-middle-class and richest households saw their incomes rise by 7 percent and 39 percent, respectively.<br />The survey also showed that the richest households, on an average, accumulated more income per household as well as pooled income in the past five years than any other five-year period since liberalisation.<br /><br />While the richest 20 percent accounted for 50.2 percent of the total household income in 1995, the survey shows that their share jumped to 56.3 percent in 2021. In contrast, the share of the poorest 20 percent dropped from 5.9 percent to 3.3 percent in the same period.<br /><br /><br /><br />While 90 percent of the poorest 20 percent in 2016 lived in rural India, the figure dropped to 70 percent in 2021. In urban areas as well, the share of the poorest 20 percent households went from 10 percent in 2016 to 30 percent in 2021.<br /><br />"The data reflects that casual labourers, petty traders, household workers, among others, in Tier 1 and Tier 2 cities got hit the most by the pandemic. During the survey, we also noticed that while in rural areas, people in the lower middle income category (Q2) moved to the middle income category (Q3), in the urban areas, the shift has been downwards, from Q3 to Q2. In fact, the rise in poverty level of the urban poor has pulled down the household income of the entire category," reported The Indian Express, quoting Rajesh Shukla, MD and CEO of PRICE.<br /><br />Most Middle-Class Breadwinners Are Illiterate or Have Primary Schooling<br />The survey further shows that while a majority of the breadwinners in 'Rich India' (top 20 percent) have completed high-school education (60 percent, of which 40 percent are graduates and above), nearly half of 'Middle India' (60 percent) only have primary education.<br /><br />As for the bottom 20 percent, 86 percent are either illiterate or just have primary education. Only 6 percent are graduates and above.<br /><br />(With inputs from The Indian Express, ICE360 2021 Survey.)<br /><br />(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)<br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-25880878747298005522023-07-02T19:15:58.055-07:002023-07-02T19:15:58.055-07:00Vulnerable employment, total (% of total employmen...Vulnerable employment, total (% of total employment) (modeled ILO estimate) - Pakistan, India | Data<br /><br /><br />Bangladesh 54%<br /><br />Pakistan 54%<br /><br />India 74%<br /><br />https://data.worldbank.org/indicator/SL.EMP.VULN.ZS?locations=PK-IN-BD<br /><br /><br />------------<br /><br />Sandeep Manudhane<br />@sandeep_PT<br />Why the size of the economy means little<br />a simple analysis<br /><br />1) We are often told that India is now a $3.5 trillion economy. It is growing fast too. Hence, we must be happy with this growth in size as it is the most visible sign of right direction. This is the Quantity is Good argument.<br /><br />2) We are told that such growth can happen only if policies are right, and all engines of the GDP - consumption, exports, investment, govt. consumption - are doing their job well. We tend to believe it.<br /><br />3) We are also told that unless GDP grows, how can Indians (on average) grow? Proof is given to us in the form of 'rising per capita incomes' of India. And we celebrate "India racing past the UK" in GDP terms, ignoring that the average Indian today is 20 times poorer than the average Britisher.<br /><br />4) All this reasoning sounds sensible, logical, credible, and utterly worth reiterating. So we tend to think - good, GDP size on the whole matters the most.<br /><br />5) Wrong. This is not how it works in real life.<br /><br />6) It is wrong due to three major reasons<br />(a) Distribution effect<br />(b) Concentration of power effect<br />(c) Inter-generational wealth and income effect<br /><br />7) First comes the distribution effect. Since 1991, the indisputable fact recorded by economists is that "rich have gotten richer, and poor steadily stagnant or poorer". Thomas Piketty recorded it so well he's almost never spoken in New India now! Thus, we have a super-rich tiny elite of 2-3% at the top, and a vast ocean of stagnant-income 70-80% down below. And this is not changing at all. Do not be fooled by rising nominal per capita figures - factor in inflation and boom! And remember - per capita is an average figure, and it conceals the concentration.<br /><br />8) Second is the Concentration of power effect. RBI ex-deputy governor Viral Acharya wrote that just 5 big industrial groups - Tata, Birlas, Adanis, Ambanis, Mittals - now disproportionately own the economic assets of India, and directly contribute to inflation dynamics (via their pricing power). This concentration is rising dangerously each year for some time now, and all government policies are designed to push it even higher. Hence, a rising GDP size means they corner more and more and more of the incremental annual output. The per capita rises, but somehow magically people don't experience it in 'steadily improving lives'.<br /><br />9) Third is the Inter-generational wealth and income effect. Ever wondered why more than 90% of India is working in unstructured, informal jobs, with near-zero social security? Ever wondered why rich families smoothly pass on 100% of their assets across generations while paying zero taxes? Ever wondered how taxes paid by the rich as a per cent of their incomes are not as high as those paid by you and me (normal citizens)? India has no inheritance tax, but has a hugely corporate-friendly tax regime with many policies tailor-made to augment their wealth. Trickle down is impossible in this system. But that was the spiel sold to us in 1991, and later, each year! There is no incentive for giant corporates (and rich folks) to generate more formal jobs, as an ocean of underpaid slaves is ready to slog their entire lives for them. Add to that automation, and now, AI systems!<br /><br />SUMMARY<br />Sadly, as India's GDP grows in size, it means little for the masses because trickle-down is near zero. That is because new formal jobs aren't being generated at scale at all (which in itself is a big topic for analysis).<br />So, our Quantity of GDP is different from Quality of GDP.<br /><br /><br />https://twitter.com/sandeep_PT/status/1675421203152896001?s=20Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-35130848753374147162023-06-23T20:35:41.137-07:002023-06-23T20:35:41.137-07:00Don’t Believe Modi's Indian Economic Success S...Don’t Believe Modi's Indian Economic Success Story<br /><br />https://foreignpolicy.com/2023/06/23/modi-india-economy-success-story/<br /><br />Modi’s deft use of direct benefit programs—such as the installation of toilets in homes, electricity hookups, and distribution of cooking gas—has certainly improved his citizen’s lives. While these programs do little to redistribute wealth or change India’s economic trajectory, the tangibility of these home-based benefits has redounded to Modi’s personal popularity and helps to explain his slight electoral edge with women.<br /><br />But these programs, together with Modi’s Hindu nationalist stunts—such as the construction of a massive Hindu temple on the remains of an ancient mosque, which was destroyed by Hindu nationalist mobs in 1992—also help to distract his supporters from his government’s myriad failures. This combination of institutionalized anti-minority violence, authoritarian crackdowns on free press and critics, youth unemployment, and soaring inequality, is explosive in Modi’s India.<br /><br />Modi’s Gujarat model of using capital-intensive infrastructure as a primary engine for growth has derailed—even for Gujarat. India is now stuck in a jobless growth trap that prioritizes capital but generates low labor participation and low human capital. As the economist R. Nagaraj concludes, “Never in the past seven decades has India witnessed such an economic reversal, and the gravity of the problem is perhaps yet to sink into the minds of policymakers and the public.”<br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-66942188289793074252023-06-23T20:34:29.217-07:002023-06-23T20:34:29.217-07:00Don’t Believe Modi's Indian Economic Success S...Don’t Believe Modi's Indian Economic Success Story<br /><br />https://foreignpolicy.com/2023/06/23/modi-india-economy-success-story/<br /><br />Though Modi promised to add 100 million manufacturing jobs, India actually lost 24 million of those jobs between 2017 and 2021. COVID-19 was only the last straw: 11 million jobs had already been lost before the pandemic hit, as state banks cloggedwith nonperforming assets followed by a shadow bank crisis led to a crunch in construction. In India, more people are out of work now than in 2011. Job prospects in cities are so dismal that agriculture now employs a greater share of workers than it did 5 years ago. In 2019, 12.5 million people applied for 35,000 railway jobs.<br /><br />The failure to add manufacturing jobs is especially stark when India is compared with similar economies in Vietnam and Bangladesh. Both nations doubled their share of manufacturing employment between 2000 and 2020, while India’s share barely rose 2 percent. Now, Vietnam exports approximately the same value in manufactured goods with its 100 million people as does India with its 1.4 billion.<br /><br />As for Modi’s bet on logistics and transport, it has largely failed to inspire domestic investment. Finance Minister Nirmala Sitharaman has pleadedwith Indian capitalists to invest in India, saying, “I want to hear from India Inc: what’s stopping you when countries and industries abroad think this is the place to be now?” Instead, they tend to offshore their profits and show a preference for financial assets.<br /><br /><br />Indian capitalists blame lack of demand for their refusal to invest. Modi’s crony capitalism has produced a massive upward distribution of wealth while failing to generate a middle-class consumer base large enough to entice investors to expand. Every index of private consumption of India’s vast working and middle class—sales of fast-moving consumer goods, two-wheelers, entry-level cars, even rail travel—has stagnated over the last decade, as Vivek Kaul has documented.<br /><br />As the Economist reported, private investment in 2019-20 was only 22 percent of GDP, down from 31 percent in 2010-11. Investors also privately admitted to fearing Modi’s unstable and capricious use of tax authorities, which his government uses to punish political foes.<br /><br />This is a development model that privileges huge, politically connected Indian incumbents—foreign firms have to seek partnerships with them to succeed. And contrary to its image of global economic openness, the government has also hikedtariffs on various goods—including goods from the United States, as highlighted by arguments over Harley Davidson during the courtship between Modi and the Trump administration.<br /><br />Pollution also shortens life expectancy for 248 million residents of northern India by an estimated eight years. Cleaning up pollution reduces morbidity and increases people’s productivity, making it a vital investment in economic growth. In 2019, the Modi government declared a so-called war on pollution but allocated a scant $42 million to the effort. Modi simply will not take steps employed in countries around the world to fight pollution by taking on powerful opponents. In contrast, China’s war on pollution, launched in 2014, has significantly cleaned up its air. The Indian government has even gone so far as to label environmental activists in Greta Thunberg’s Fridays For Future organization as terrorists, arresting them under India’s draconian sedition laws.<br /><br />Institutionalized sexism also severely hampersIndian economic growth. Female employment rates (ranging from formal work to self-employment to informal labor) have been dropping for over three decades, with only 7 out of 100 urban women now employed, placing the nation behind even Saudi Arabia in terms of female labor participation. The Modi government’s low funding of the Mahatma Gandhi National Rural Employment Guarantee Act in 2023 further hurts working women; conversely, boosting rural employment and creating urban employment guarantee schemes would be an easy growth (and electoral) win.<br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-54750514070780218962023-06-23T20:33:18.313-07:002023-06-23T20:33:18.313-07:00Don’t Believe Modi's Indian Economic Success S...Don’t Believe Modi's Indian Economic Success Story<br /><br />https://foreignpolicy.com/2023/06/23/modi-india-economy-success-story/<br /><br />While campaigning for the U.S. presidency, Joe Biden sharply criticized the Modi government’s human rights record, writing how two of its landmark laws are “inconsistent with the country’s long tradition of secularism and with sustaining a multi-ethnic and multi-religious democracy.” Today, Indian Prime Minister Narendra Modi leads a country that is suddenly at the center of U.S. strategy in Asia. And Biden has changed his tune, inviting the prime minister to a state visit this week.<br /><br />It’s widely understood that when U.S. elites refer to India having a functional free press, judiciary, and democracy, they are either dishonest or in denial about how the country’s political system has developed under Modi. But the same is true when they praise India’s economy. The U.S. government seems to be operating under the assumption that Modi’s India can sustain the country as it decouples from Chinese manufacturing. There is little reason to believe that is true.<br /><br />Modi’s “Gujarat model” shot him to the prime ministry in 2014. As chief minister in Gujarat, he had led a developmentalist state: midwifing new industries, repairing bureaucracies, and making huge electricity and infrastructure investments. The state’s growth rate boomed as subsidies were given to politically connected conglomerates and to state-owned players.<br /><br />But the model has failed when extended to the national stage. While Modi has succeeded in selling himself to his constituents and the world as India’s great modernizer, builder, and attractor of capital, the country’s growth under Modi has flagged. Heaps of praise from foreign India watchers might lead one to think otherwise. India’s boosters point to Modi’s “Make in India” 2014 electoral pledge to boost manufacturing to 25 percent of Indian GDP and his government’s all-in bet on capital investments in airports, along with roads and rail—11 percent of its 2023 budget—to create a larger internal market.<br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-75597779486654043172023-06-17T17:08:37.647-07:002023-06-17T17:08:37.647-07:00Excerpts of "India is Broken" by Princet...Excerpts of "India is Broken" by Princeton Economist Ashoka Mody<br /><br /><br />The Indian GDP growth story was nearly over. In its 2018 annual report on India, the IMF confirmed that the demonetization and GST implementation shocks had taken a significant toll on the Indian economy. Non-performing loans of banks (loans that were not being repaid on time) had risen from about 4 percent of all loans in late 2014, when RBI governor Rajan first rang the alarm bells, to about 9 percent in 2017. For government-owned banks, almost 12 percent of all loans in 2017 were non-performing (Figure 21.3). The government had done little to discipline big companies for not repaying their debts. Instead, the government once again used scarce taxpayer money to refill the hole that the defaults left in the capital of the banks they owned. These bank recapitalizations added up to about $13 billion in the fiscal year 2017–2018, with similarly large amounts anticipated in each of the next two years. Choked with bad loans, major government-owned banks drastically slowed their lending. The industrial sector, saddled with debt, virtually stopped borrowing. Although GDP growth remained mysteriously high—above a 7 percent annual rate—corporate investment was evaporating.32<br /><br /><br />Mody, Ashoka. India Is Broken (pp. 343-344). Stanford University Press. Kindle Edition.<br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-76561302640526830532023-06-17T17:06:55.576-07:002023-06-17T17:06:55.576-07:00Excerpts of "India is Broken" by Princet...Excerpts of "India is Broken" by Princeton Economist Ashoka Mody<br /><br /><br />The grim reality is that, to employ all working-age Indians, the economy needs to create 200 million jobs over the next decade, an impossible order after the past decade of declining employment numbers.1 Right from independence, the Indian economy produced too few jobs. For more than 80 percent of Indians, the informal sector employment became the safety net, where workers idled for long stretches, earning below- or barely-above-poverty wages. Demonetization in 2016, a poorly executed goods and services tax in 2017, and COVID-19 in 2020 and 2021 struck hammer blows on the informal sector while creating no new options. Indeed, technology accelerated job destruction, especially in retail and wholesale trade. More Indians just stopped looking for work.<br /><br />Set against this bleakness, many pundits and leaders look back to celebrate and draw hope from India’s high GDP growth rates of the 1990s and 2000s. That celebrated celebrated growth, however, was an outcome of unusually buoyant world trade, rampant natural resource use, and a domestic finance-construction bubble. Even as wealthy Indians accumulated astonishing riches, job creation remained weak. The most severe forms of poverty came down, but still afflicted over 20 percent of Indians; another 40 percent lived precariously, ever at risk of falling back into a dire existence. The median Indian lived in that vulnerable zone—and, looking through a government-induced data fog, still lives there.<br /><br />The unchanging problem through the post-independence years has been the lack of public goods for shared progress: education, health delivery, functioning cities, clean air and water, and a responsive and fair judiciary. Along with scarcity of jobs, the absence or poor quality of public goods makes the lived reality of vast numbers<br /><br /><br />Mody, Ashoka. India Is Broken (pp. 398-399). Stanford University Press. Kindle Edition.<br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-30921109126374486072023-06-17T17:05:41.261-07:002023-06-17T17:05:41.261-07:00Excerpts of "India is Broken" by Princet...Excerpts of "India is Broken" by Princeton Economist Ashoka Mody<br /><br /><br />And economic inequalities now had become much wider. With exquisite timing, on April 22, four weeks into the lockdown, Vogue India invited its readers into another Mumbai world, the twenty-seven-story Mumbai home of Mukesh Ambani, India’s reigning business tycoon and one of the world’s richest people. The Ambani home, located eleven kilometers (seven miles) away from cramped Dharavi, has ceilings so high that the structure is tall as an average sixty-story building. It is equipped with three helipads, a theater that can accommodate eighty guests, a spa, and a garage for 168 vehicles. The “sun-kissed living area” offers a “breathtaking view of the sea.”11<br /><br />In the India of 2020, the Hindu-Muslim divide and egregious economic inequalities were reverberating echoes of Bengal in the 1940s. And disconcertingly, despite decades of economic progress, the echoes also sounded in the economic desperation of the reverse trek from the city to the village. The ongoing reverse trek revealed the continued risk of sudden income loss, health catastrophe, and the loss of even woeful living spaces: it revealed an India that was broken for hundreds of millions of Indians.12 This book is my attempt to explain why India, for so many, is broken.<br /><br />Mody, Ashoka. India Is Broken (p. 5). Stanford University Press. Kindle Edition.<br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-48037237615829153542023-06-17T17:05:33.867-07:002023-06-17T17:05:33.867-07:00Excerpts of "India is Broken" by Princet...Excerpts of "India is Broken" by Princeton Economist Ashoka Mody<br /><br /><br />And economic inequalities now had become much wider. With exquisite timing, on April 22, four weeks into the lockdown, Vogue India invited its readers into another Mumbai world, the twenty-seven-story Mumbai home of Mukesh Ambani, India’s reigning business tycoon and one of the world’s richest people. The Ambani home, located eleven kilometers (seven miles) away from cramped Dharavi, has ceilings so high that the structure is tall as an average sixty-story building. It is equipped with three helipads, a theater that can accommodate eighty guests, a spa, and a garage for 168 vehicles. The “sun-kissed living area” offers a “breathtaking view of the sea.”11<br /><br />In the India of 2020, the Hindu-Muslim divide and egregious economic inequalities were reverberating echoes of Bengal in the 1940s. And disconcertingly, despite decades of economic progress, the echoes also sounded in the economic desperation of the reverse trek from the city to the village. The ongoing reverse trek revealed the continued risk of sudden income loss, health catastrophe, and the loss of even woeful living spaces: it revealed an India that was broken for hundreds of millions of Indians.12 This book is my attempt to explain why India, for so many, is broken.<br /><br />Mody, Ashoka. India Is Broken (p. 5). Stanford University Press. Kindle Edition.<br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-85601172650333400662023-06-16T16:31:19.829-07:002023-06-16T16:31:19.829-07:00Blow for TCS! Transamerica Life Insurance cuts sho...Blow for TCS! Transamerica Life Insurance cuts short $2 billion contract with Indian IT giant<br /><br /><br />https://www.businesstoday.in/latest/corporate/story/blow-for-tcs-transamerica-life-insurance-cuts-short-2-billion-contract-with-indian-it-giant-385873-2023-06-16<br /><br />The deal between TCS and Transamerica Insurance was signed in January 2018, as per a release by the IT services company. The deal ensured that TCS earned at least $200 million in annual revenue.<br /><br />India’s largest IT services company, Tata Consultancy Services (TCS), has confirmed that its 10-year deal with Transamerica Life Insurance Company, which was signed in 2017, has been ended before completion due to the current macro-economic environment. The 10-year deal was worth $ 2 billion.<br /><br />The company said in a statement, “Considering the current macro environment and respective business priorities, Transamerica and TCS have mutually agreed to end the administration arrangement for Transamerica life insurance, annuities and supplemental health insurance, and other employee benefit products.”<br /><br />The deal between TCS and Transamerica Insurance was signed in January 2018, as per a release by the IT services company. The deal ensured that TCS earned at least $200 million in annual revenue. The release from January 2018 also highlighted that TCS was signed to simplify the service of more than 10 million policies into a single integrated modern platform.<br /><br />“Transamerica and TCS will work together to ensure a smooth transition of the administration of these products to a new servicing model, which we expect to take approximately 30 months,” they added.<br /><br />For the financial year 2022-23, TCS has reported a 14.8 percent year-on-year (YoY) increase in consolidated net profit. The profit for the quarter ended March 31, 2023 stood at Rs 11,392 crore.<br /><br />The consolidated revenue from operations of the IT company came in at Rs 59,162 crore, up 16.9 per cent, from Rs 50,591 crore YoY. In the December quarter of FY23, it stood at Rs 58,229 crore.<br /><br />The revenue rose 10.7 per cent year-on-year (YoY) in constant currency (cc) terms. Earnings before interest and taxes (EBIT) stood at Rs 14,488 crore with EBIT margin contracting 0.5 per cent YoY to 24.5 per cent. Net margin came in at 19.3 per cent.<br /><br />This development comes as the IT services company's new CEO, K Krithivasan, started his term on June 1.<br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-72800181772937708872023-06-15T18:49:21.581-07:002023-06-15T18:49:21.581-07:00JP Morgan on Indian IT sector: Shares of most IT s...JP Morgan on Indian IT sector: Shares of most IT services companies were under pressure on Wednesday after foreign brokerage JP Morgan reiterated its negative stance on the entire IT services universe. The brokerage said it expects every IT firm to disappoint the street in Q1 and H2FY24. Further, it has placed Infosys, TCS, and Mphasis on 'Negative Catalyst Watch', as reported by Zee Business.<br /><br /><br />https://www.zeebiz.com/markets/stocks/news-jp-morgan-indian-it-sector-infosys-tcs-mphasis-lti-mindtree-persistent-systems-us-recession-239897<br /><br />The brokerage has maintained an 'underweight' rating on Infosys with a target price of Rs 1,150. On TCS, too, JP Morgan is underweight and has set the target price at Rs 2,700. As regards Mphasis, the target price is set at Rs 1,550. That's an 18 per cent decline from the previous close of Rs 1,898. Moreover, it has downgraded Persistent Systems to underweight from neutral and cut the target to Rs 4,100 from Rs 4,200 earlier. The brokerage said it finds the stock expensive given slowing growth in a tough macro environment.<br /><br />The brokerage mentioned that EPAM recently cut its guidance from +3% growth in CY23 to -2% and the cuts were led by a cut in discretionary digital engineering spending. Persistent Systems has the highest exposure to discretionary spending at 83 per cent as compared to peers' 40-75 per cent. Further, it has maintained an underweight stance on Tech Mahindra, but the target price has been raised to Rs 950 from Rs 900 earlier.<br /><br />At the time of writing this news, the S&P BSE Information Technology index was trading nearly half a per cent lower at 29,087.66 levels. KPIT Tech was the biggest loser on the index (down nearly 5 per cent). Persistent Systems was next on the list with a 2.62 per cent loss. Cigniti, Ramco Systems, LTI Mindtree, and Mastek were also among the losers. However, the stocks trimmed their losses later. At close, the IT index stood at 29,174.47, down 0.17 per cent.<br /><br />Nirmal Bang Securities is also cautious about the sector. In its latest report, the brokerage said it continues to remain cautious on the IT sector with an 'underweight' (UW) stance and "will wait for better valuations or evidence that the worst is behind us. Only capitulation by the US consumer would, in our view, signal that we are close to the end of the current cycle of pain."<br /><br />The brokerage further said, "Management commentary/data points across global IT services players and cloud/SaaS players in the June 2023 quarter-to-date (QTD) as well as from the recent meetings we have had in Bengaluru with a few Tier-1 players suggest that the June 2023 quarter is likely to be weak for Tier-1 players as has been widely expected. The situation for Tier-2 players will be much more company-specific."<br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-11803678363454687762023-05-31T07:36:12.487-07:002023-05-31T07:36:12.487-07:00#India’s #economy grew 6.1% in the fourth quarter,...#India’s #economy grew 6.1% in the fourth quarter, but the #unemployment rate also jumped to 8.1% in April, the fourth consecutive month of higher #jobless rates. #Jobs #Modi #BJP<br />https://www.wsj.com/articles/indias-gdp-grows-6-1-amid-strong-domestic-demand-2edd9ef4?st=fq39w5xk9xdj9d7 via @WSJ<br /><br />India’s economy grew 6.1% in the fourth quarter compared with the same period last year, as domestic demand for goods and services picked up and consumer confidence, while still lower than before the Covid-19 pandemic, continued to strengthen.<br /><br />The South Asian country also reported gross-domestic-product growth for the full fiscal year of 7.2% compared with the previous year. India’s central bank in April raised its growth forecast for the current fiscal year to 6.5% from 6.4%.<br /><br />Authorities have been working to combat elevated food prices that have increased costs for households around the world since Russia’s invasion of Ukraine last year. Inflation eased in the January-to-March quarter to between 5.5% and 6.5%, after hitting 7.8% in April 2022.<br /><br />“Domestic demand in India is doing better than the rest of the world,” said Sujan Hajra, chief economist at Anand Rathi Securities in Mumbai. The reason, he said, was improved income growth and higher consumer spending.<br /><br />Hajra said that since India, unlike other major economies, didn’t implement large-scale fiscal stimulus programs during the pandemic, it has avoided the negative impact from the withdrawal of those programs.<br /><br />Many economists predict that India will continue to be one of the world’s fastest-growing economies, but creating jobs for its millions of unemployed people remains a major challenge.<br /><br />The unemployment rate jumped to 8.1% in April, the fourth consecutive month of higher jobless rates, according to the Centre for Monitoring Indian Economy, an independent think tank in Mumbai. Prime Minister Narendra Modi is seeking to expand manufacturing jobs as global supply chains shift and companies diversify out of China.<br /><br />“Its growth story will be determined on how well it can create such opportunities,” Hajra said.<br /><br />Kavita Lama, who runs two salons in New Delhi, said her business has faced many shocks in recent years. Covid restrictions in 2020 and 2021 severely hit her income. Even after the pandemic waned and curbs eased, many customers held back on spending amid rising inflation and financial insecurity.<br /><br />Now, clients are back, said Lama. She has raised prices for services like hair cuts, hair coloring and manicures three times in the past two months, she said.<br /><br />“They don’t want to save anymore,” she said. “They are ready to spend more even if the services are getting costlier.”<br /><br />A monthly survey by India’s central bank shows consumer confidence has improved. In March, 75% of those surveyed said they had boosted their spending, compared with 64.1% in the same month a year earlier.<br /><br />Sales of vehicles, which is a key indicator of consumer demand, have also grown. India’s total passenger-vehicle sales volume grew 17% in January, 11% in February and 4.7% in March from the same period a year ago, according to the Society of Indian Automobile Manufacturers.<br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-29534758229804808762023-05-28T18:32:53.147-07:002023-05-28T18:32:53.147-07:00Unemployment in India
https://www.cnn.com/2023/0...Unemployment in India<br /><br /><br />https://www.cnn.com/2023/05/27/economy/india-economic-miracle-issues-youth-intl-hnk-dst<br /><br />High #Unemployment in #India: While people under the age of 25 account for more than 40% of India’s population, almost half of them – 45.8% – were unemployed as of December 2022. #Modi #BJP #economy #poverty #hunger Hindutva #Islamophobia<br /><br /><br />Too few jobs, too many workers and ‘no plan B’: The time bomb hidden in India’s ‘economic miracle’<br /><br />Sunil Kumar knows all about working hard to achieve a dream. The 28-year-old from India’s Haryana state already has two degrees – a bachelor’s and a master’s – and is working on a third, all with a view to landing a well-paid job in one of the world’s fastest growing economies.<br /><br />“I studied so that I can be successful in life,” he said. “When you work hard, you should be able to get a job.”<br /><br />Kumar does now have a job, but it’s not the one he studied for – and definitely not the one he dreamed about.<br /><br />He has spent the past five years sweeping the floors of a school in his village, a full-time job he supplements with a less lucrative side hustle tutoring younger students. All told, he makes about $85 a month.<br /><br />It’s not much, he concedes, especially as he needs to support two aging parents and a sister, but it is all he has. Ideally, he says, he’d work as a teacher and put his degrees to use. Instead, “I have to do manual labor just to be able to feed myself.”<br /><br />Kumar’s situation is not unusual, but a predicament faced by millions of other young Indians. Youth unemployment in the country is climbing sharply, a development that risks undermining the new darling of the world economy at the very moment it was expected to really take off.<br /><br />India’s newfound status as the world’s most populous nation had prompted hopes of a youthful new engine for the global economy just as China’s population begins to dwindle and age. Unlike China’s, India’s working age population is young, growing, and projected to hit a billion over the next decade – a vast pool of labor and consumption that one Biden administration official has called an “economic miracle.”<br /><br />But for young Indians like Kumar, there’s a flip side to this so-called miracle: too few jobs and too much competition.<br /><br />In contrast to China, where economists fear there won’t be enough workers to support the growing number of elderly, in India the concern is there aren’t enough jobs to support the growing number of workers.<br /><br />While people under the age of 25 account for more than 40% of India’s population, almost half of them – 45.8% – were unemployed as of December 2022, according to the Centre for Monitoring Indian Economy (CMIE), an independent think tank headquartered in Mumbai, which publishes job data more regularly than the Indian government.<br /><br />Some analysts have described the situation to CNN as a “time bomb”, warning of the potential for social unrest unless more employment can be created.<br /><br />Kumar, like others in his position, knows all too well the frustrations that can build when work is scarce.<br /><br />“I get very angry that I don’t have a successful job despite my qualifications and education,” he said. “I blame the government for this. It should give work to its people.”<br /><br />The bad news for people like Kumar, and the Indian government, is that experts warn the problem will only get worse as the population grows and competition for jobs gets even tougher.<br /><br />Kaushik Basu, an economics professor at Cornell University and former chief economic adviser for the Indian government, described India’s youth unemployment rate as “shockingly high.”<br /><br />It’s been “climbing slowly for a long time, say for about 15 years it’s been on a slow climb but over the past seven, eight years it’s been a sharp climb,” he said.<br /><br />“If that category of people do not find enough employment,” Basu added, “then what was meant to be an opportunity, the bulge in that demographic dividend, could become a huge challenge and problem for India.”<br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-52085240841881393972023-05-14T13:11:29.814-07:002023-05-14T13:11:29.814-07:00India: What the smartphone market tells us about i...India: What the smartphone market tells us about its economy - BBC News<br /><br /><br />https://www.bbc.com/news/business-65491090<br /><br />According to research firm the International Data Corporation (IDC), 31m smartphones were shipped in India during the first three months of this year.<br /><br />That was 16% lower than in the same period of 2022 and the lowest first-quarter shipments in four years.<br /><br />IDC highlighted that the sluggish demand came amid an uncertain economic outlook and as stockpiles of handsets remain high.<br /><br />It also said that India's overall smartphone market will be flat this year after three quarters in a row of falling sales.<br /><br />At the same time some analysts have pointed to the growing trend of "premiumisation" - when wealthier consumers move towards more expensive products.<br /><br />"The premium segment's share almost doubled" in the first three months of this year compared to a year ago, according to Prachir Singh from technology market research firm Counterpoint.<br /><br />However, as brands like Apple and Samsung benefit from this trend, demand for cheaper handsets made by companies like China's Xiaomi and Realme has been hit by the tough economic environment.<br /><br />That end of the market is suffering as users take longer to upgrade their handsets, experts say.<br /><br />The stark contrast between Apple's fortunes and the shrinking market for cheaper devices also reflects an uneven post-pandemic recovery in Asia's third largest economy.<br /><br />"The K-shaped recovery is not allowing the consumption demand to become broad-based nor helping the wage growth especially of the population belonging to the lower half of the income pyramid," India Ratings and Research said.<br /><br />"As a result, while there is visible demand for high-end automobiles, mobile phones and other luxury items, demand for items of mass consumption is still subdued," it added.<br /><br />For example, sales of entry-level scooters were down by almost 20% in April this year, compared to the same month in 2019, before the pandemic hit.<br /><br />This indicates that lower income customers "were are still hesitant to upgrade," according Manish Raj Singhania, the president of the Federation of Automobile Dealers Associations.<br /><br />It also reflects the on-going problems in India's rural economy, which have been worsened by extreme weather events.<br /><br />Lack of demand in rural areas has also been driving the decline in the consumer goods, like snacks and fizzy drinks, where growth has dropped to single figures after a year and a half of double-digit increases.<br /><br />Household spending on goods and services, which had grown 20% year on year in March 2022, has also slowed sharply this year.<br /><br />That came as India's consumers have been squeezed by rising interest rates and stubbornly high inflation.<br /><br />Overall, the country's economic growth slowed to 4.1% for the first three months of 2023, the lowest growth for a year, official figures show.<br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-68056757627166825182023-04-28T08:01:01.430-07:002023-04-28T08:01:01.430-07:00#India's now most populous! In 1990 India &...#India's now most populous! In 1990 India & #China had about the same per capita annual income of $350. China’s is now 6X as large as India’s: $12,550 to $2,250. On #Modi’s watch India now lags farther. Can India now reap the #demographic dividend? @WSJ https://www.wsj.com/articles/can-india-cash-in-on-its-growing-population-aging-family-growth-decline-demographics-manufaturing-modi-beijing-af54b4a7<br /><br />For the first time since the mid-18th century, China isn’t the world’s most populous nation. According to United Nations projections, India claims that mantle this month as its population touches 1.425 billion.<br /><br />Many in the West would like India to catch up economically with China and emerge as a powerful democratic counterweight in Asia. But for this dream to become reality, India must do a better job of educating its people and industrializing its economy.<br /><br />--------<br />Not long ago, educated Indians largely considered the country’s burgeoning population a liability, not an asset. But many now argue that India’s young population gives it an edge over China that will persist for decades. China’s population has already begun to decline. The United Nations projects India’s to peak at 1.7 billion in 2064.<br /><br />------<br />To a large extent, optimism about India hinges on the idea of a “demographic dividend.” The theory, Mr. Eberstadt explains, is that this is a once-in-history chance for a population to move swiftly from short life expectancy and big families to long life expectancy and small families. In India, the labor force is growing more rapidly than the total population, which could translate into higher savings and investment rates and more rapid economic growth. South Korea and Taiwan are examples of Asian countries that swiftly made this transition from poor to rich.<br /><br />Before India can dream of emulating their success, or China’s, it must acknowledge the size of the challenges it faces. Only about three-fourths of India’s population is literate, a level that China surpassed about 40 years ago. According to Mr. Eberstadt, this makes India the only country in history to have a vast pool of college graduates living amid hundreds of millions of working-age people who have never been to school. Moreover, over the past three decades regional disparities have widened. Kerala in the south has human-development indicators akin to Brazil. Bihar in the north looks worse than Cambodia.<br /><br />Or take female labor-force participation, another measure of economic development. In China it’s more than 60%—roughly the same as in the U.S. and other wealthy countries. In India it has declined from 28% in 1990 to 23% in 2021. More than two-thirds of Chinese live in cities, which tends to boost productivity. India remains overwhelmingly rural—only about a third of the population lives in cities.<br /><br />Industrialization also matters. Apart from a few resource-rich countries like Qatar and Saudi Arabia, all rich nations have successfully moved large numbers of people from farms to factories as they developed. Despite Mr. Modi’s calls to “Make in India,” manufacturing as a percentage of Indian gross domestic product declined from 16% in 2011 to 14% in 2021. As a proportion of employment, India’s industrialization peaked in 2002. Almost half of the Indian workforce makes subsistence livings on small family farms, compared with only about 25% of Chinese and 1% of Americans. In 2019, amid persistent protests, Mr. Modi rolled back ambitious agricultural reforms that would have helped modernize farms.<br /><br /><br />On the upside, India has massive room for improvement. If the country gets everything right it could grow robustly for decades. But to catch up it will need to redress many of its failures. “The critical thing to remember,” Mr. Eberstadt says, “is that demographic dividends don’t always get cashed.”<br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-47234104553355470512023-04-18T11:35:03.713-07:002023-04-18T11:35:03.713-07:00Worthless Degrees Are Creating an Unemployable Gen...Worthless Degrees Are Creating an Unemployable Generation in India<br /><br /><br />https://www.bloomberg.com/news/articles/2023-04-17/india-s-worthless-college-degrees-undercut-world-s-fastest-growing-major-economy#xj4y7vzkg<br /><br /><br /><br />Anil Swaroop, former secretary of school education, estimated in a 2018 article that of the 16,000 colleges offering bachelor’s qualifications for teachers, a sizeable number exist only in name.<br /><br />“To call such so-called degrees useless would be an understatement,” said Anil Sadgopal, former dean of education at Delhi University and former member of the Central Advisory Board of Education that guides the federal government. “When lakhs of youth become unemployed every year, the whole society becomes unstable.”<br /><br />All this is a challenge for big business. A study by HR firm SHL found that only 3.8% of engineers have the skills needed to be employed in software-related jobs in start-ups.<br /><br />“The experience everyone has in the IT industry is that graduates need training,” said Mohandas Pai, former chief financial officer and board member of Infosys Ltd. and co-founder of private equity firm Aarin Capital. Pai, one of the Manipal Education and Medical Group companies, “trains a lot of people for banking. They are not job ready, they need to be trained.”<br /><br />Even though companies are looking to recruit in areas such as electric vehicle manufacturing, artificial intelligence and human-machine interfaces, smaller Indian universities still teach older material such as the basics of the internal combustion engine, Patial said. “There’s a gap between what the industry is seeing and the curriculum they’ve gone through.”<br /><br />India has regulatory bodies and professional councils to regulate its educational institutions. While the government has announced plans for a single agency to replace all existing regulators, it is still at the planning stage. The Education Department did not respond to a request for comment.<br /><br />The Modi administration is also trying to address the shortcomings of the education sector in its new education policy of 2020, committed to improving the quality of its institutions. It has also started the process of allowing leading foreign universities to set up campuses in the country and award degrees.<br /><br />Meanwhile, finding work remains a challenge for this generation. According to the World Bank, unemployment is a ticking time bomb as nearly a third of the country’s youth are not working, studying or undergoing training. Some are getting involved in crime and violence. Last year, angry youths facing bleak job prospects blocked rail traffic and highways, even setting some trains on fire.<br /><br />Pankaj Tiwari, 28, says he paid Rs 100,000 for a master’s degree in digital communication because he wanted a job and a higher status in society. It was a huge outlay for his family, which has an annual income of Rs 400,000. Though his college had promised campus placements, no company turned up and he is still unemployed after four years.<br /><br />“Had I gotten some training and skills in college, I might have been in a different situation. Now I feel like I wasted my time.’ “I have obtained certificates only on paper, but they are of no use.”Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-47934841785968390922023-04-18T11:34:07.532-07:002023-04-18T11:34:07.532-07:00Worthless Degrees Are Creating an Unemployable Gen...Worthless Degrees Are Creating an Unemployable Generation in India<br /><br /><br />https://www.bloomberg.com/news/articles/2023-04-17/india-s-worthless-college-degrees-undercut-world-s-fastest-growing-major-economy#xj4y7vzkg<br /><br /><br />There is a bustling market place in the heart of Bhopal with training institutes for civil services, engineering and management. The students said that they had enrolled for these courses to upgrade their skills and boost their career opportunities after regular degree, as they did not get jobs of their choice.<br /><br />A Bhopal educational institution in particular hit the headlines in recent years because it was involved in a case that went all the way to the Supreme Court of India. In 2019, the Supreme Court barred the Bhopal-based RKDF Medical College Hospital and Research Center from admitting new students for two years for allegedly using fake patients to meet the requirements of the medical college. The college initially argued in court that the patients were genuine, but later apologized after an investigative panel found that the alleged patients were not in fact sick.<br /><br />“We have noticed a disturbing trend of some medical colleges in projecting bogus faculty and patients to obtain permission for admission of students,” the court said in its judgement. The medical college did not respond to a request for comment.<br /><br />The Medical School is part of the RKDF Group, a well-known name in Central India with a wide network of colleges in fields ranging from Engineering to Medicine and Management. The group faced another controversy last year. In May last year, police in the southern city of Hyderabad arrested the vice-chancellor of the RKDF group’s Sarvepalli Radhakrishnan University as well as his predecessor for their alleged involvement in awarding fake degrees. Still, a flood of students could be seen in many RKDF institutes in Bhopal. One branch had posters of their “bright stars”—students who got jobs after graduation.<br /><br />SRK University and RKDF University of RKDF Group did not respond to multiple requests for comment. On its website, the group says that it provides quality education by imparting teaching and practical skills while striving to provide robust infrastructure and facilities.<br /><br />Elsewhere in Bhopal, another college was functioning in a small residential building. One of the students who studied there said that it was easy to secure admission and get a degree without attending classes.<br /><br />India’s education industry is projected to reach $225 billion by 2025 from $117 billion in 2020, according to the India Brand Equity Foundation, a government trust. This is still very small compared to the US education industry, where spending is estimated to exceed $1 trillion. In India, public spending on education has remained stagnant at around 2.9% of GDP, well short of the 6% target set in the government’s new education policy.<br /><br />The problems at the colleges have spread across the country, with a range of institutions in different states under official scrutiny. In some parts of India, students have gone on hunger strike to protest against the lack of teachers and facilities in their institutions. In January, charges were filed against the Himachal Pradesh-based Manav Bharti University and its promoters for allegedly selling fake degrees, according to a press release from the Enforcement Directorate. Manav Bharati University did not respond to a request for comment.<br /><br />While institutes promote campus placements for students, many are not able to deliver on this promise. In 2017, an institute in the eastern state of Odisha offered fake job offers during campus placements, prompting students to protest.<br /><br />Anil Swaroop, former secretary of school education, estimated in a 2018 article that of the 16,000 colleges offering bachelor’s qualifications for teachers, a sizeable number exist only in name.<br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-82604755357874310322023-04-18T11:33:07.735-07:002023-04-18T11:33:07.735-07:00Worthless Degrees Are Creating an Unemployable Gen...Worthless Degrees Are Creating an Unemployable Generation in India<br /><br /><br />https://www.bloomberg.com/news/articles/2023-04-17/india-s-worthless-college-degrees-undercut-world-s-fastest-growing-major-economy#xj4y7vzkg<br /><br />Business is booming in India’s $117 billion education industry and new colleges are popping up at breakneck speed. Yet thousands of young Indians are finding themselves graduating with limited or no skills, undercutting the economy at a pivotal moment of growth.<br /><br />Desperate to get ahead, some of these young people are paying for two or three degrees in the hopes of finally landing a job. They are drawn to colleges popping up inside small apartment buildings or inside shops in marketplaces. Highways are lined with billboards for institutions promising job placements.<br /><br />Around the world, students are increasingly considering the return on degree versus cost. Higher education has often sparked controversy globally, including in the US, where for-profit institutions have faced government scrutiny. Yet the complexities of education in India are clearly visible.<br /><br />It has the world’s largest population by some estimates, and the government regularly highlights the benefits of having more young people than any other country. According to a study by talent assessment firm Wheebox, half of all graduates in India are unemployed in the future due to problems in the education system.<br /><br />Many businesses say they have difficulty recruiting because of the mixed quality of education. This has kept unemployment at a high level of over 7%, even though India is the fastest growing major economy in the world. Education is also becoming a big issue for Prime Minister Narendra Modi as he tries to attract foreign manufacturers and investors from China. Modi vowed to create lakhs of jobs in his campaign speeches, and the issue is likely to be hotly debated in the 2024 national elections.<br /><br />“We face a challenge in hiring as the specific skill sets required by the industry are not readily available in the market,” said Yashwinder Patial, Director, Human Resources, MG Motor India.<br /><br />The complications of the country’s education boom are visible in cities like Bhopal, a metropolis of about 2.6 million in central India. Huge hoardings of private colleges are ubiquitous, promising degrees and jobs to young people. One such advertisement said, “Regular classes and better placements: We need to say more.”<br /><br />It is difficult to resist such promises for millions of young men and women dreaming of a better life in India’s dismal job scenario. Higher degrees, once accessible only to the wealthy, hold a special hold for young people from middle- and low-income families in India. Students interviewed by Bloomberg cited a variety of reasons for investing in more education, ranging from attempting to boost their social status to improving their marriage prospects to applying for government jobs, for which applicants are required to pay. Degree certificate is required.<br /><br />Twenty-five-year-old Tanmay Mandal, a Bhopal resident, paid $4,000 for a bachelor’s degree in civil engineering. He was convinced that a degree was a path to a good job and a better lifestyle. He was not bothered by the high fees for his family, whose monthly income is only $420. Despite the cost, Mandal says he learned almost nothing about construction from teachers who appeared to have insufficient training themselves. He could not answer technical questions in job interview and is unemployed for the last three years.<br /><br />Mandal said, ‘I wish I had studied in a better college.’ “Many of my friends are also sitting idle without jobs,” Mandal said. He still hasn’t given up. Even though he did not find his final degree useful, he wants to avoid the stigma of being unemployed and sitting idle. So, he has signed up for a master’s degree in another private institution as he believes that more degrees can at least raise his social status.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.com