Sunday, November 21, 2021

Misery Index: Who's Less Miserable? India or Pakistan?

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

Hanke's Misery Index: 

Hanke's Annual Misery Index (HAMI) ranks Pakistan 49th (32.5) and India 39th (35.8) most miserable for year 2020. Bangladesh is significantly better than both India and Pakis­tan with a misery index of 14 and rank of 129. Venezuela ranks number 1 as the world's most miserable country followed by Zimbabwe 2nd, Sudan 3rd, Lebanon 4th and Suriname 5th among 156 countries ranked this year.  The rankings for the two South Asian nations are supported by other indices such as the World Bank Labor Participation data, International Labor Organization Global Wage Report, World Happiness Report, Food Affordability Index and Global Hunger Index.  

Hanke's Annual Misery Index 2021. Source: National Review

Employment and Wages:

Labor force participation rate in Pakistan is slightly above 50% during this period, indicating about 2% drop in 2020.  Even before COVID pandemic, there was a steep decline in labor force participation rate in India. It fell from 52% in 2014 to 47% in 2020. 

Labor Force Participation Rates in Pakistan (Top), India (bottom). Source: Trading Economics

The International Labor Organization (ILO) Global Wage Report 2021 indicates that the minimum wage in Pakistan is the highest in South Asia region. Pakistan's minimum monthly wage of US$491 in terms of purchasing power parity while the minimum wage in India is $215. The minimum wage in Pakistan is the highest in developing nations in Asia Pacific, including Bangladesh, India, China and Vietnam, according to the International Labor Organization.

Monthly Minimum Wages Comparison. Source: ILO

The impact on livelihoods of workers in developing nations during the COVID pandemic has varied depending on the size of the informal work forces, according to The Economist magazine

Workers in Informal Economy of Selected Developing Countries. Source: The Economist

Most countries with large informal work forces have recovered but India's jobs crisis has only deepened since the start of the COVID19 pandemic. Latest CMIE data indicates that employment rate in India was just 37.34% in November, 2021. 

Asian Employment Rates. 

Global Food Security:

Pakistan (with 52.6 points) has scored better than  Bangladesh (48.8), Nepal (48.3) and India (50.2 points) in terms of food affordability.  Sri Lanka scored higher with 62.9 points in this category on the GFS Index 2021,  according to a global report released by Economist Impact and Corteva Agriscience recently. 

Ireland, Australia, the UK, Finland, Switzerland, the Netherlands, Canada, Japan, France and the US shared the top rank with the overall GFS scores in the range of 77.8 and 80 points on the index. 

In overall food security, Pakistan ranked 75th with a score of 54.7, ahead of Sri Lanka (77), Nepal (79) and Bangladesh (84), but behind India ranked 71st with a score of 57.2 points on the GFS Index 2021 ranking 113 countries.

Pakistan improved its GFS score by 9 points (to 54.7 in 2021 from 45.7 in 2012) while India’s score improved only by 2.7 points to 57.2 in 2021 from 54.5 in 2012.  Nepal improved by 7 points (to 53.7 points in 2021 from 46.7 points in 2012) and Bangladesh by 4.7 points (to 49.1 in 2021 from 44.4 points in 2012). China’s score improved by 9.6 points to 71.3 in 2021 from 61.7 in 2012, the report said. “The GFSI looks beyond hunger to identify the underlying factors affecting food insecurity around the world,” said Tim Glenn, Executive Vice-President and Chief Commercial Officer, Corteva Agriscience.

The cost of living in Pakistan is the world's lowest despite recent inflationary trends, according to the Cost of Living Index for mid-2021 as published by Numbeo.  Numbeo Grocery Index reports that the food prices in Pakistan are the second cheapest in the world. 

History of Inflation in Pakistan. Source: Statista

Global Hunger Index:

Global Hunger Index 2021 report has ranked Pakistan 92nd, ahead of India ranked 101st among 116 countries.  Pakistan's other South Asian  neighbors are ranked better: Nepal (76), Bangladesh (76), Myanmar (71). 

Hunger Trends in South Asia. Source: Global Hunger Index 

Pakistan has been reducing hunger at a faster rate than India but slower than other South Asian neighbors like Bangladesh and Nepal.  

World Happiness Index: 

Amid the COVID19 pandemic, Pakistan's World Happiness ranking has dropped from 66 (score 5.693) among 153 nations last year to 105 (score 4.934) among 149 nations ranked this year. Neighboring India is ranked 139 and Afghanistan is last at 149. Nepal is ranked 87, Bangladesh 101, Pakistan 105, Myanmar126 and Sri Lanka129. Finland retained the top spot for happiness and the United States ranks 19th. 

Pakistan Happiness Index Trend 2013-2021

One of the key reasons for decline of happiness in Pakistan is that the country was forced to significantly devalue its currency as part of the IMF bailout it needed to deal with a severe balance-of-payments crisis. The rupee devaluation sparked inflation, particularly food and energy inflation. Global food prices also soared by double digits amid the coronavirus pandemic, according to Bloomberg News. Bloomberg Agriculture Subindex, a measure of key farm goods futures contracts, is up almost 20% since June. It may in part be driven by speculators in the commodities markets. These rapid price rises have hit the people in Pakistan and the rest of the world hard. In spite of these hikes, Pakistan remains among the least expensive places for food, according to recent studies. It is important for Pakistan's federal and provincial governments to rise up to the challenge and relieve the pain inflicted on the average Pakistani consumer.  

Pakistan's Real GDP: 

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

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

Related Links:

Haq's Musings

South Asia Investor Review

Pakistan Among World's Largest Food Producers

Naya Pakistan Housing Program

Food in Pakistan 2nd Cheapest in the World

Pakistan's Pharma Industry Among World's Fastest Growing

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

Pakistan's 2012 GDP Estimated at $401 Billion

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

Coronavirus, Lives and Livelihoods in Pakistan

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

Pakistani-American Woman Featured in Netflix Documentary "Pandemic"

Incomes of Poorest Pakistanis Growing Faster Than Their Richest Counterparts

Can Pakistan Effectively Respond to Coronavirus Outbreak? 

How Grim is Pakistan's Social Sector Progress?

Pakistan Fares Marginally Better Than India On Disease Burdens

Trump Picks Muslim-American to Lead Vaccine Effort

Democracy vs Dictatorship in Pakistan

Pakistan Child Health Indicators

Pakistan's Balance of Payments Crisis

Panama Leaks in Pakistan

Conspiracy Theories About Pakistan Elections"

PTI Triumphs Over Corrupt Dynastic Political Parties

Strikingly Similar Narratives of Donald Trump and Nawaz Sharif

Nawaz Sharif's Report Card

Riaz Haq's Youtube Channel


Riaz Haq said...

The currency in circulation (CIC) has increased to over Rs. 7 trillion in Pakistan, representing the growth in the size of the economy and the traditional use of cash among the citizens as money.

According to the State Bank of Pakistan (SBP), the currency in circulation has increased to Rs. 7.4 trillion by the end of the financial year 2020-21 as compared to the previous level of the last financial year in which it stood at Rs. 6.7 trillion, showing a double-digit growth of 10.4 percent year-on-year.

The currency in circulation is the overall currency consisting of various denominations of banknotes being used as money in an economy for the exchange of goods and services and informal savings, excluding the financial sector.

The size of Pakistan’s economy has increased significantly, which showed the double-digit growth in currency in circulation, said Tahir Akbar, Head of Research at Arif Habib Limited. It is pertinent to mention here that Pakistan’s GDP grew by 3.94 percent, which was well above the target set for the financial year 2020-21 of 2.1 percent, and COVID-19 induced contraction of 0.47 percent in FY20.

Accordingly, the banking regulator issued currency notes in order to meet the requirements of the local economy. The banknote printing charges of SBP increased to Rs. 15.762 billion in FY21 from Rs. 13.325 billion in FY20, thereby registering an increase of 18 percent mainly due to larger volumes of printing and an increase in printing rates.

The CIC of the country stands from 28 to 30 percent viz-a-viz the volume of broad money size, he further said. This is the average percentage of CIC when Pakistan is compared with similar economies. On the other hand, the CIC percentage is less than 20 percent of the broad money in most of the developed countries, where the digitization of the economy is much higher than in Pakistan.

Besides, the currency in circulation stands at Rs. 7.4 trillion, the value of money deposits maintained by the banking system of the country stood at Rs. 19.2 trillion, which is in addition to the value of assets and investments made by the country.

Financial Inclusion and Digitization of Banking System

The higher currency in circulation also means that the size of Pakistan’s undocumented economy is huge. Besides, the cash available in the economy also causes a factor of money-led inflation.

Since the last decades, the banking regulator along with the private sector has been working aggressively towards the financial inclusion of the economy through introducing various new avenues such as branchless banking, mobile and internet banking, payment cards, payment gateway operators, POS operators, digital wallets, QR payments, etc.

The use of digital means for the transaction of money has increased tremendously, but there is a big room for improvement, which needs customers’ confidence over these tools on the one hand, whereas the literacy of electronic banking is also needed on the other hand.

A senior banker and founder of branchless banking in Pakistan, Nadeem Hussain, told ProPakistani,

Yes, the cash in circulation is increasing because the parts of our economy which are not under the tax net usually accept cash and the volumes are growing. This means the service sector especially real estate , Kiryana stores, freelancers , plumbers/dentists/electricians,

He pointed out that the country’s service sector constitutes 50 percent of the economy and the bulk of it is cash-based.

In FY20, the volume of paper-based transactions within the banking sector stood at Rs. 151 billion as compared to transaction volume through electronic or digital banking standing at Rs.86 billion. The electronic banking transactions registered year-on-year growth of 31.1 percent, which implies an increase in the adoption of digital means for payments.

Anonymous said...

We are living beyond our means. Borrowing to consume is not sustainable. Crisis after crisis is the future.

Mahmood Hasan said...

Very interesting data! Thank you.

samir sardana said...

The Beauty on Duty,is as under:

PPP per capita,is higher than India - which obviously means that,people in Pakistan are happier and economically better off
PPP Wages are higher,than in India - which means that labour is happy,content,can self-invest and save
BUT NOMINAL WAGES in India,are HIGHER than in Pakistan - which makes Pakistan,a LOWER COST EXPORTER
Half the GDP,is neither captured nor taxed.In a way,that half is a SEZ,which self regulates. If the state taxed it - the taxes would be lost in corruption,and there would be no quid pro quo,for the tax assessee.As of today,this sector self regulates and manages,its needs.
Rebasing the GDP and boosting it,will make Pakistan lose its LDC status,and aid packages from several OECD nations

So the Pakistan strategy,has the best,of all the worlds !


Chaiwala has also rebased the GDP,and redefined the mode of computation of GDP.

Net Result - No one believes the Chaiwala,and his numbers -and the Indian economy had been doomed since the rebasing and Chaiwala's deinition of GDP ! dindooohindoo

After Chaiwala's illiterate redefinition,as is wont,with sons of dishwashers,the Bania started hallucinating,with the corollary delusions of grandeur - and THEN EMPEROR XI,SHOWED THE CHAIWALA,AND HIS MONKEY BRIGADE - HIS TRUE WORTH.

Jiye Jiye Pakistan !

That Crazy Guy said...

After devaluations and severe IMF restrictions, growth will be slow for next 4-5 years.

Meanwhile, because of pkr downfall, per capita income in USD is now below 1000$. This is almost HALF of Bangladesh.

Bangladesh taka (bdt) is now worth twice as much as Pak rupee.

What is going on?

What is Imran doing?

Riaz Haq said...

TCG: "Meanwhile, because of pkr downfall, per capita income in USD is now below 1000$. This is almost HALF of Bangladesh"

Please read the last section of this blog post:

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

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

samir sardana said...

Pakistan should rebase its economy only after the potential of the state is unlocked.

Unlocking will take place,after the following,are commissioned :

Thar Coal
Reko Copper
Saudia Refinery
Other SEZs

Once the above are done,Pakistan will have low cost coal and liquid fuels for surplus and low cost power.Reduction in power costs to the grid,will then build the impetus to wipe out power theft,by among others,bring the unorganised sector,into the ambit of regulation and fiscal levies

Low cost power and abundant power,gas and liquid fuels (from the Saudia refinery),will ignite the economy,and lower the cost of enterprise operations.

CPEC will,by itself,lead to a quantum leap in the GDP,and an appreciation of the PKR.

Until the 5 prongs are unleashed - Pakistan has to sell the LDC story,and soak in the funds from IMF/WB/SDC/OECD/DANIDA.KFW/GTZ .............Reduce the Guilt of the White man,by reducing the weight of money bags,on the back on the White man.

Once the above 5 prongs are commissioned,then the GDP can be rebased - to give a shock to Chaiwala and his monkey brigade.A rebased Pakistan GDP and per capital - will provide AN OPTION TO INDIAN MUSLIMS, and and all Islamic nations in Central Asia,Africa and GCC, and will prove THAT JINNAH WAS RIGHT,AND THAT PAKISTAN HAS SUCCEEDED,AND INDIA HAS FAILED !



The Biggest advantage,is that,it will lower the NPA % to GDP,and the KSE market capitalisation to GDP ratio, and MOST IMPORTANTLY,THE DEFENSE BUDGET AS A % to the GDP. That will double the bank stocks and KSE in less than 6 months.Chaiwala and his monkey brigade,never fail to point out,the defense budget of Pakistan,and the Military state syndrome.This is also an issue,raised by several donors ! dindooohindoo

In any case,the defense budget should be a Top secret - and in Pakistan,the architecture of Ordinance entities,and other military procurement,and dual purpose corporates (serving civilian and military purposes).So the personnel cost of the Military,can be booked in several corporates and military procurements,can be split into tech know how purchased - booked in dual purpose corporates etc. - and the Pakistan defense budget to GDP,as a %,can be lower,than that of Nauru.Civilian Military procurements and infra costs can be booked in several non-military account heads.

All in all,Pakistan is all set to be a super power - and one might see an Islamic Federation from Pakistan,Persia,Afghan to Central Asia - with a GDP,in Trillions of USD,in a few years time.Inshallah !

Jiye Jiye Pakistan !

Riaz Haq said...

Akar Patel: India’s economic growth has been falling for 42 months now, but the government has not spoken about why that is so and what went wrong

It is not easy to find good news in India and has not been easy for a long time now. A recent report said that the Indian economy is contracting again in this quarter, between April and June, by more than double digits.

This report from one agency was carried in multiple media outlets but it was not refuted or commented upon by others, including by the government. It was just assumed to be true. After 24 months of slowdown starting in January 2018 before the Covid-19 pandemic, and then 18 months of collapse since January 2020, we have turned into the world’s worst performing economy.

India’s economic growth has been falling for 42 months now, but the government has not spoken about why that is so and what went wrong or what it plans to do to correct it. Former Prime Minister Manmohan Singh in an interview last year offered five points to correct course, but he also added that a course-correction was possible only after one had acknowledged that there was a problem.

Since we have not accepted that anything is wrong, we will continue.

CMIE, the only body offering regular employment data (the Narendra Modi government has little data and says that it is conducting some surveys, whose results will come around the end of the year) says that unemployment in India is at 11 per cent, higher than Pakistan and Bangladesh.

Inflation is high though demand is low, and wholesale prices are at their highest since 1992. Petrol is around Rs.100 a litre, diesel is almost there and the price of crude oil is expected to rise another 20 per cent by the end of the year. Exports are at the same level as they were in 2014 and in seven years under Narendra Modi have shown no growth, though in the same period Bangladesh and Vietnam have grown and China has held onto its share.

Eighty crore Indians are being given free food for seven months from May till November. Five kilos of wheat or rice per person per month and one kilo of dal. In May, 16 lakh tonnes of wheat and 15 lakh tonnes of rice was distributed.
Sixty per cent of Indians depend on free food. This should tell you more than enough about the state of poverty in India today.

When Mr Modi took over in 2014, he said MGNREGA was a monument to the failure of the Manmohan Singh government. He would give people real jobs, and not MGNREGA jobs. The MGNREGA programme’s size last year was three times what it was under UPA rule because crores of people have lost their jobs and fallen into poverty and now depend on MGNREGA and free foodgrains. The Gujarat government put out a statement last week which said that MGNREGA was a lifesaver.

Elsewhere, it has been a year since the clash in Ladakh. China has stopped its disengagement. This means India has to keep tens of thousands of troops in that area almost permanently.

China has also told us that it is demoting the level of talks, and now only area commanders will discuss specific issues rather than general disagreement. Our soldiers still cannot patrol in the Depsang Plain but the government has not acknowledged that or held a single press briefing on Ladakh since the crisis began a year ago. Opacity is the hallmark of dictatorships and not democracies, but this is the status of our national security.

India was supposed to be the Vaccine Guru and Vaccine Factory for the world. Instead, India has wrecked the world’s vaccination programme by stopping the delivery of vaccines others already paid for in advance and which were manufactured in India. Our government has begun taking over those stocks while the world waits. Even with that, India has only managed to fully vaccinate only three per cent of its population against the world’s average of nine per cent. Why? We have not been told.

samir sardana said...

How Crazy is Mr Crazy Guy ?

What is FX ?

A nation with a USD 100 Billion GDP, and population of 100 Billion - will have a per capital nominal GDP of ONE USD !

But that nation exports oil and gas and rare earths,and has a trade surplus of 99 Billion,and no foreign debt. THEREFORE,its FX RATE WILL BE 1 UNIT = 10 USD !?

What does prove !?

Take Ghana ! It has a GDP of 70 Billion !
1 USD = 6 Ghana units !

What does that prove ?

The Answer = NOTHING !

What does Per Capita prove ?

Take a nation which exports oil and gold - sold by a state canalised agency.The nation's GDP is 100 Billion USD,and Population is 10 million - and the state canalised exports are 90 Billion !

So per capita income = 10000 USD - which is bunk,as 90% of GDP comes from 1 ENTITY, which employs,say 20000 people,across the supply chain !

In any case,GDP is NOT INCOME,and 10000 USD,is per capita GDP,and NOT per capita Income !

Pakistan is on the path to salvation of its Islamic Destiny,under IMK !

samir sardana said...

The Concept of GDP,as defined by Eco-no-Mists,needs a review,especially in pathetic nations like India !

Take Chaiwala - who sells Chai,at a temp kiosk,on the road,for which the milk is inhouse from a cow,and it has no sugar,and the ginger is also inhouse,and it has some home grown leaves (not tea leaves).So nothing is bought,by the Chaiwala.This activity will NOT be captured by the GDP.Even the buyers are paying for Chai,in petty cash - and the GDP,on the expenditure model,will also not capture it

Take the Dishwasher mother of Chaiwala who is paid for her services,in petty csh.She uses water and no soaps or destergents (only organic plant based free of cost detergents) - so there is no GST expense in the activity.This activity will NOT be captured by the GDP.The mother of the Chaiwala needs carbs for all the work she has done,and that comes from her home crops and Gau Mata.Gau Mata is fed free of cost agri waste (as it is swapped for the Gau Mutram and Milk from the Cow),and the cow is fed no vet medicines (only herbs).Surplus milk and dung,is swapped for agri waste and food crops.

So none of the activities,of the mother of Chaiwal,ais captured by the GDP,on the production value or expenditure model.dindooohindoo

Which is Y poor,backward nations like Hindoosthan,with 500 million people living as poor farmers and scavengers,need a new model of GDP DEFINITION,COMPOSITION AND COMPUTATION.

Chaiwala has to know the worth of Hindoosthan !

Riaz Haq said...

From Twitter:

Kamran Khan

پاکستانی رپے کی ڈالر مقابل قدر میں یقینناً بڑی کمی ہوئی مگر پورے سال 2021 کا جائزہ لیں
توکئی کلیدی کرنسیز کے مقابلے میں پاکستان رپے کی 8.3 فیصد کمی بہت چونکا دینے والی نہیں ترکی کا لیرا 42 فیصد ارجنٹائن پیسو 16.2 جاپانی ین 10.2 ہنگری پولینڈ وغیرہ کی کرنسی قدر لگ بھگ اتنی ہی گریں

Anonymous said...

I think we should stop comparing ourselves to India. That is not a helpful comparison, because India is not a Muslim country.

Instead, we should now compare ourselves to Bangladesh. After all, we were once part of the same country. We are both Muslim countries. We both have excellent relations with China. We are both members of OIC and get help from Saudi Arabia. We are both suffering from global rise in Islamophobia.

So it looks like a Pak-Bangla comparison (competition) woul be more appropriate.

What do you think? Do you disagree?

Riaz Haq said...

#India has 46, #China 42, #Pakistan 6 & #Bangladesh 4 cities among the top 100 most polluted cities in the world. #Lahore ranks third behind #Dhaka, the capital of #Bangladesh, and #Mongolia’s capital #Ulaanbaatar on the #pollution index. #AirQuality

Every year, a thick smog covers India’s capital New Delhi. Last week, it got so bad for the 20 million residents that authorities shut schools.

New Delhi’s concentration of PM2.5 particles, which damage people’s lungs, is 34 times the World Health Organization’s (WHO) acceptable levels. The toxic haze is especially bad during the winter as farmers burn stubble left in their fields.

Air quality is determined by the levels of air pollutants PM2.5, PM10, ozone, nitrogen dioxide, sulfur dioxide, and carbon monoxide.

Particulate matter (PM) comprises tiny particles that negatively impact health. PMs vary in size, most damaging are PM2.5 and PM10 – with a diameter of less than 2.5 μm and 10μm respectively. A human hair’s diameter is 50-70 μm.

PM2.5 levels lower than 12 are considered good, 55-150 unhealthy and 250 or above is hazardous.

In 2020, India had 46 of the world’s 100 most polluted cities, followed by China (42), Pakistan (6), Bangladesh (4), Indonesia (1), and Thailand (1), according to air quality tracker IQAir. All these cities had a PM2.5 air-quality rating of more than 50.

Nine out of the top 10 most polluted cities are in India.

Hotan, in western China’s Xinjiang, had the worst average air quality in 2020, with 110.2.

In 2019, 1.67 million deaths in India were caused by air pollution, according to the Lancet.

While replacing solid fuels with alternatives has lowered deaths linked to household air pollution since 1990, deaths related to ambient PMs have increased.

Fifteen of the 20 most polluted cities are in India, mostly in the north. Stubble burning spikes pollution in autumn and winter. Vehicle emissions, industry, and burning rubbish also contribute to high levels of PM2.5 and other pollutants.

Some Indian and Chinese cities have installed smog towers to try to tackle air pollution

New Delhi installed two after an order by India’s Supreme Court – one is in a busy shopping area.

The $2m 25-metre (82-foot) high tower’s 40 fans take in particle-laden air at 1,000 cubic metres (35,000 cubic feet) per second and pass it through filters.

The smog tower works within a one kilometre (0.6-mile) radius, supposedly cutting PM2.5 levels by 50 percent. But questions remain over how efficient they really are.

According to the WHO, some 7 million people die annually as a result of air pollution. More than 90 percent of the world’s population lives in areas where air pollution exceeds WHO limits.

Air pollution is linked to a number of illnesses including asthma, diabetes, and heart disease.

Riaz Haq said...

"Pakistan’s ..demonstrated access to external financing...offset rising external risks from a widening current-account deficit..reforms...could create positive momentum for the sovereign’s ‘B-’ rating, which we affirmed in May 2021 with a Stable Outlook"

Fitch Ratings-Hong Kong-24 November 2021: Fitch Ratings believes Pakistan’s recent policy adjustments and demonstrated access to external financing, as well as its commitment to a market-determined exchange rate, offset rising external risks from a widening current-account deficit. Ongoing reforms, if sustained, could create positive momentum for the sovereign’s ‘B-’ rating, which we affirmed in May 2021 with a Stable Outlook.

Increases in global energy prices and a strong domestic recovery from the initial Covid-19 pandemic shock have put additional strains on Pakistan’s external position. The current-account deficit in the fiscal year to June 2022 is set to be wider than our previous forecast of 2.2%. The State Bank of Pakistan (SBP) on 19 November 2021 raised its policy rate by a significant 150bp to 8.75%, pointing to rising risks related to the balance of payments and inflation.

We think external liquidity pressures should be manageable in the near term, despite the wider current-account deficit, given Pakistan’s adequate foreign-exchange reserves and success in accessing financing.

Official reserve assets nearly doubled to USD24.1 billion by end-September 2021 from USD12.6 billion two years ago. However, liquid foreign-exchange reserves have dropped since mid-September, which we believe may partly reflect debt repayment.

Pakistan’s near-term financing efforts have been supported by Saudi Arabia, which plans to place USD3 billion on deposit with the SBP and provide an additional USD1.2 billion oil-financing facility under a one-year support package. Its foreign reserves also received a USD2.8 billion boost in August from the IMF’s one-off global allocation of Special Drawing Rights.

Funding from these sources followed Pakistan’s successful international debt issuance through a USD2.5 billion bond in March 2021 and a follow-on USD1 billion bond as part of its global medium-term note programme. Pakistan aims to tap debt markets more regularly through the scheme, which could reduce the costs of coming to market. The authorities also plan new sukuk issuance in 2021.

Ahmed said...

Dear Sir Riaz

Thanks for sharing this great and wonderful post, Sir inspite of all these factual data which you have just posted in your post, still Indians proudly claim that their economy is far superior to the economy of Pakistan.

They feel proud over their foreign exchange reserves and they also feel proud about their GDP growth. When will Indians realize that how Indian government actually fudges the GDP growth and changes the official figures of it?


Ahmed said...


You said:
I think we should stop comparing ourselves to India. That is not a helpful comparison, because India is not a Muslim country.

Instead, we should now compare ourselves to Bangladesh. After all, we were once part of the same country. We are both Muslim countries. We both have excellent relations with China. We are both members of OIC and get help from Saudi Arabia. We are both suffering from global rise in Islamophobia.

So it looks like a Pak-Bangla comparison (competition) woul be more appropriate.

What do you think? Do you disagree?

My comment:

I don't agree with you, I am not sure about Sir Riaz, pls note that as far as I know ,government of India is not completely following Shariah(Islamic Law), and this is the same case with Pakistan.

2ndly Islamophobia is not as serious as the media of Pakistan tries to show, Islamophobia is only increasing in some of the European countries as far as I know but it is not increasing every where in Europe. Still their are very tolerant and civilized countries in the West.

Riaz Haq said...

The country’s economy rebounded during the fiscal year 2021-21 with real GDP growth rising to 3.9%, reported the State Bank of Pakistan (SBP).

Pakistan’s economy rebounded during FY21: SBP
In its annual report titled ‘State of Pakistan’s Economy’ — which reviewed FY21 — the central bank stated that the expansion in economic activity was accompanied by a 10-year low current account balance that contributed to a significant build-up in foreign exchange reserves.

“The fiscal deficit also edged down despite COVID-related spending, leading to an improvement in the public debt-to-GDP ratio, unlike the experience of most countries across the world,” a statement issued by the SBP read.

Inflation eased
Per the report, headline inflation — based on the consumer price index (CPI) — also eased during the year mainly due to “relatively stable prices of non-food and non-energy items.” However, overall price levels, especially of food items, remained high owing to supply-side challenges.

Furthermore, average headline CPI inflation fell to 8.9% in FY21 — within the SBP’s forecast range of 7-9%.

“The resurgence in domestic demand did not translate into inflationary pressures amidst the presence of some spare capacity in the economy,” it stated.

It is pertinent to mention here that the inflation remained volatile during the year, because of the impact of the increase in fuel prices and power tariffs.

The report notes that the economic turnaround was facilitated by management of the COVID health pandemic, as well as a prompt and targeted monetary and fiscal response to counter its impact on economic growth and livelihoods.

The SBP’s liquidity support amounted to around 5% of GDP by the end of FY21, featuring a combination of policy rate cuts as well as several targeted and time-bound measures, such as the Temporary Economic Refinance Facility (TERF) for promotion of new investment, Rozgar payroll financing scheme to prevent layoffs, the Refinance Facility to Combat COVID to provide concessional financing to construct hospitals and facilities to fight against COVID, and temporary loan deferments and restructurings to provide temporary liquidity relief to small and big businesses as well as individual borrowers.

The report highlights that a broad-based recovery in real GDP growth was recorded. Led by the favourable supply and demand dynamics as well as a low base effect from the COVID-led contraction in FY20, large-scale manufacturing posted a 14.9% increase in FY21.

It further revealed that although the growth in agriculture was slightly lower than in FY20, the production of wheat, rice and maize rose to historic levels.

“The cumulative increase in the production of these crops offset the decline in cotton production," it noted.

"The improvement in the commodity-producing sectors and a surge in imports led to a sharp recovery in wholesale and trade services in FY21,” the statement read.

The central bank’s report also notes that the economic rebound was achieved without a worsening of macroeconomic imbalances, as the overall policy mix was “still prudent”.

The current account deficit reduced substantially amid record-high workers’ remittances and export receipts and contributed to the $5.2 billion increase in the SBP’s foreign exchange reserves during the year. The country also retained access to sizable external financing, with inflows received from the IMF and other multilateral and bilateral creditors; the issuance of Eurobonds after a long hiatus; and deposits and investments from non-resident Pakistanis via the Roshan Digital Accounts.

The central bank points out that the recovery in exports was driven by the “continued adherence to the market-based exchange rate system; provision of subsidised inputs; lower duties on imported raw materials; and the fast-tracking of GST refunds”.

Riaz Haq said...

The country’s economy rebounded during the fiscal year 2021-21 with real GDP growth rising to 3.9%, reported the State Bank of Pakistan (SBP).

During FY21, the higher exports partially offset a significant rise in import payments, which surged amidst the upswing in economic activity; supply-side challenges in wheat, sugar and cotton; and elevated international commodity prices.

“These pressures became more prominent towards the end of the year, leading to a 3% depreciation of the Pakistani rupee against the US dollar during the fourth quarter (July-March),” the central bank reported, noting that the local currency had appreciated 10%, mainly due to the “accumulated current account surpluses”.

Meanwhile, the fiscal deficit reduced to 7.1% of GDP, from 8.1% in FY20. “Restrained non-interest current expenditures allowed for undertaking spending on social safety nets, the economic stimulus package and provision of targeted support to various sectors of the economy,” said SBP.

Tax collection improved
On the revenue side, the Federal Board of Revenue’s tax collection improved sharply, in the wake of the economic rebound, a surge in imports, and efforts to streamline tax administration.

The report noted that with the containment of the twin deficits and currency appreciation, the public debt-to-GDP ratio declined to 83.5% in FY21.

Riaz Haq said...

Modi’s Reform Momentum Has Hit a Wall in #India. Big chunks of #Modi’s #economic agenda could get delayed or scrapped. The reversal of #FarmLaws and a possible stalling of the new #labor codes could be the beginning of two years of inertia. #economy #BJP

Investors must be wondering what promise New Delhi will break next as the ruling party tries to win upcoming state elections. First, the government made a U-turn on the three laws that Prime Minister Narendra Modi wanted to use to shake up the stagnant farm economy. Next, he may delay implementing the four codes that have been billed as the “biggest labor reforms in independent India,” as Bloomberg News reported. Has the Modi momentum finally come up against a wall?

Take the labor laws passed by parliament in September last year. So far, only 10 out of India’s 28 states have followed through by finalizing rules on industrial relations, wages, social security and workplace safety. Considering Modi’s party is in power in 17 states, politicians clearly fear resistance.

It’s been a longtime demand by the business community that industrial units with fewer than 300 workers shouldn’t require government permission to fire employees. (The federally mandated limit currently affects factories employing more than 100 workers, acting as a perverse incentive against growth, though some states have relaxed the rules.) Still, codifying this concession won’t exactly win votes. Similarly, giving a legal boost to retirement nest-eggs — as the new rules demand — will ultimately benefit employees. Yet they won’t be thrilled if it means lower take-home pay now.

Why is it so hard for a powerful — and, after more than seven years in the top job, still highly popular — leader to enforce his will? Modi promised sweeping, productivity-enhancing changes to factors of production — land, labor and capital. He also pledged a revamp of crucial commodity markets like food. In each instance, being perceived as pro-big business was the undoing of his policies.

The first setback was land. The previous government, battling popular anger for allowing land grabs in the name of special economic zones, had passed an acquisition law in 2013 that big business found too restrictive. Within a year of becoming prime minister, Modi tried to tilt the balance so that village plots could be acquired more easily for infrastructure or affordable housing. But opposition leader Rahul Gandhi mocked him in parliament for favoring crony capitalists dressed in “suits and boots.” Modi gave up the idea.

Ditto the controversial agriculture laws. Modi backed them to the hilt against relentless protests by farmers. But since the overall package gave the impression that the state was going to retreat from grain procurement, leaving farmers at the mercy of large business groups, it became too hot a potato to hold through next year’s state elections in Uttar Pradesh and Punjab. So Modi dropped his ambitious plan, closing the door at least for some years on reforms of the subsidy-ridden farm and food economy. Now it looks like the new labor codes are going into cold storage, too.

Meanwhile, reforms to improve capital allocation in the economy are a mixed bag. Despite opposition from bank employees’ unions, a bill — to be introduced in the upcoming winter session of parliament — will pave the way for privatizing two state-run lenders. Investors will pay attention to the fate of this law. They should also closely watch the government’s 6 trillion rupees ($80 billion) asset recycling plan. This, too, could potentially become a political minefield.

Riaz Haq said...

ExplainSpeaking: How policymakers in UP, rest of India are underestimating the unemployment crisis
Merely looking at the traditional metric of the unemployment rate is misleading. Here’s why policymakers should look at ‘employment rate’ if they want to accurately assess the scale of joblessness


In India, as the virus abates, a hunger crisis persists

“The hunger crisis is, in fact, fundamentally reflective of the livelihood crisis,” said Jayati Ghosh, a development economist. People do not have money to buy food, she said, and “that’s both our employment and food systems failing.”

The unemployment rate in April to June of 2020, at the height of the first lockdown, was nearly 21 percent in urban areas, according to government figures. Even as the economy showed signs of revival this year, 15 million jobs were lost in May when a devastating second wave killed hundreds of thousands and brought the health-care system to near collapse.

Nearly 80 percent of India’s workforce makes a living in the informal sector, which economists say was the worst hit. The problem is more pronounced in urban areas like Mumbai, where such workers subsist on their daily income for survival and lack networks or resources such as agricultural land in their home villages.

Sonawane’s work and life came to a sudden halt with the two lockdowns. The five jobs she worked — cleaning and cooking at upscale homes in the high-rise buildings visible from her cramped shanty — disappeared immediately.

Her husband, who worked as a delivery person for a gas company, stayed home. So did her three children, including her youngest son, 7, who would repeatedly ask her in the early days when school would reopen. Now, she said, he has forgotten much of what he had learned, as primary schools in the city have remained shut since the initial closures in March 2020.

After the lockdowns were lifted, Sonawane went back to work. But the world outside had changed.

Two of the families she worked for had left the city, and another told her not to return over coronavirus concerns. Her pre-pandemic income of $160 a month shrank by half. Her husband’s company laid him off.

“We never had food shortages at home” before this, Sonawane said. “We always earned enough to feed the family.”

Right to food
India’s food security law aims to provide free or subsidized food grains to two-thirds of the country’s population, making it the largest safety net in the country. But experts say gaps, its reliance on biometric authentication and a narrow scope have hindered its efficacy.

During the lockdown, the government expanded benefits by providing an extra five kilograms (about 11 pounds) of rice or wheat every month to those eligible, a program that was recently extended to March 2022.

But economists say the law’s coverage needs to account for the increase in population over the past decade, which could bring an additional 100 million people under its purview.

Not far from Chembur, where Sonawane lives, is the working-class neighborhood of Govandi, framed by the country’s largest landfill. In one of the narrow streets is the home of 31-year-old Farhan Ahmad, a father of two, who worked as a driver and is one of the millions of migrants who have fallen through the cracks in the food law.

The five years before the pandemic had been good for Ahmad, who had moved to Mumbai from his village hoping to make a life in the city.

Ahmad signed up to drive with Ola, an Indian multinational ride-hailing company, when a friend lent him a car if he agreed to pay back the loan on it. By the time the coronavirus arrived, he had a small sum set aside in savings. He and his wife debated buying a refrigerator.

“Forget about affording a fridge now,” said Ahmad. “On most days I can’t buy enough food.”

Riaz Haq said...

Center for Monitoring Indian Employment (CMIE)

Indian Employment data disappoints in November 2021

Headline data on employment in November 2021 is mildly encouraging but the details underlying these are quite disappointing. The encouraging signs are that the unemployment rate declined from 7.8 per cent in October to 7 per cent in November; the employment rate rose by a whisker from 37.28 per cent to 37.34 per cent. This translated into employment increasing by 1.4 million, from 400.8 million to 402.1 million in November 2021.

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

The fall of October and November seems to suggest that the recovery in the LPR from its recent drop to 39.6 per cent in June 2021 following the second wave of the Covid-19 pandemic has run out of steam. And, a secular decline may set in again. This is what had happened after the recovery from the first wave of the Covid-19 pandemic. LPR crashed from nearly 43 per cent before the first wave of Covid-19 to about 36 per cent. It recovered quickly to 41 per cent and then lost steam. Then, it started sliding slowly to hover just above 40 per cent before the second wave dragged it below 40 per cent during the quarter ended June 2021. The LPR recovered steadily in the second quarter of the fiscal to reach 40.7 per cent by September 2021. But then it slid back to 40.4 per cent in October and then to 40.2 per cent in November.

The two pandemic shocks have lowered the LPR structurally. And, the declining trend has continued at the lowered levels. India now has an LPR which is close to 40 per cent compared to about 43 per cent before the pandemic.

India’s LPR is much lower than global levels. According to the World Bank, the modelled ILO estimate for the world in 2020 was 58.6 per cent

Riaz Haq said...

Center for Monitoring Indian Employment (CMIE)

Indian Employment data disappoints in November 2021

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

CMIE’s definition of employment and therefore of LPR is more stringent than what is recommended by the ILO. This definition informs that the LPR in India is much worse than what the international comparisons tell us. It is therefore a matter of greater concern than illustrated by an international comparison. Worse still, the LPR has been falling. The data for October and November tell us that it continues to fall even after the recent shocks that shaved off several percentage points off the LPR.

The second disappointment in the November data is also related to a structural damage in the trend seen in the employment data. Employment is falling in urban areas at a faster pace than in rural areas. As a result, the share of urban employment has been falling. During 2016-17 through 2018-19, urban employment accounted for 32 per cent of total employment in India. In 2019-20, the year just before the pandemic struck India, the share of urban employment dropped to 31.6 per cent. In 2020-21, it fell to 31.3 per cent. In November 2021, its share fell further to 31.2 per cent. In the first half of 2021-22, the share of urban employment was down to 31 per cent. There was an improvement in October to 31.5 per cent, but the rate has slid back to 31.2 per cent in November 2021, indicating continuing weakness in urban jobs.

Urban jobs arguably provide better wages and have a greater share of what are called the organised sectors. Their decline implies a decline in the overall quality of jobs in India.

In November 2021, while India generated 1.4 million additional jobs, its urban regions saw employment fall by 0.9 million. This was compensated by a 2.3 million increase in rural jobs.

A third and related disappointment in the November employment data is the fall in salaried jobs and a fall in the count of entrepreneurs. Salaried jobs fell by 6.8 million. Entrepreneurs declined by 3.5 million. These were compensated by an 11.2 million increase in employment among daily wage labourers and small traders. This again points to deterioration in the quality of employment. Salaried jobs, at 77.2 million, were 9.7 per cent lower in November 2021 than they were in November 2019.

Of all the disappointments in the employment data, the continuing fall in the LPR should be considered as the most worrisome.

Riaz Haq said...

India’s Stalled Rise: As the #COVID19 #pandemic spread in 2020, #India's #economy withered, shrinking by more than seven percent, the worst performance among major developing countries. Reversing a long-term downward trend, #poverty increased substantially

To answer the question of whether India is back, it is important to first understand when and why India went away. The answer lies in plans that went badly wrong. During the boom years after the turn of the millennium, Indian firms invested heavily, on the assumption of continued rapid growth. So when the financial crisis brought the boom to an end, causing interest rates to soar and exchange rates to collapse, many large companies found it difficult to repay their debts. As companies began to default, banks were saddled with nonperforming loans, exceeding ten percent of their assets.

In response, successive governments launched initiative after initiative to address this “twin balance sheet” problem, initially asking banks to postpone repayments, later encouraging banks and firms to resolve their problems through an improved bankruptcy system. These measures gradually alleviated the debt problem, but they still left many firms too financially feeble to invest and banks reluctant to lend. And with lackluster investment and exports, the economy was unable to recover its former dynamism.

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

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


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


Disaffection is also manifest in politics. The national government in New Delhi has been bickering with the country’s state governments for more than a year over the sharing of revenue from the GST. Several states have imposed new residency requirements on job seekers over the past two years, thus directly challenging the principle of a common national labor market. There has also been a revival of the policy of “reservation,” India’s version of affirmative action, in which some jobs are reserved for people from traditionally disadvantaged social groups.

Riaz Haq said...

#India #Unemployment: Modi gov't said in December that 9% of all MSMEs had shut down because of #COVID19. In May, another survey of over 6,000 MSMEs and startups found that 59% were planning to shut shop, scale down or sell before the end of 2021. #economy

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

Kumar could not care less.

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

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

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

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

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

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


“The decimation of MSMEs is why we’re seeing core inflation, and we should be very worried,” said economist Pronab Sen, former chief statistician of India, referring to an inflation measure that leaves out food and energy because of their volatile price shifts. India’s core inflation stood at more than 6 percent in October. The level of competition in the market has also dramatically shrunk, he said. “Pricing power has shifted to a small number of large companies,” Sen told Al Jazeera. “And it is their exercise of this power that is leading to core inflation.”

When fuel prices rise globally – and subsequently in India – some inflation is unavoidable. But a competitive market usually forces companies to absorb much of that burden in their margins. Without that competition, Sen said, it is easier for firms to pass more of the increased costs on to consumers.

MSMEs have long been the backbone of the Indian labour market, employing 110 million people. Their struggles are a key reason for India’s failure to reduce unemployment rates, Sen added.

Riaz Haq said...

#India reports first death linked to #Omicron #coronavirus variant.the western state of #Rajasthan. Omicron cases in the country have now risen to 2,135, #Indian #health official told a small group of reporters in #NewDelhi. #Pandemic #BJP #Modi #Covid_19

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

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

Riaz Haq said...

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

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

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

Need-to-Know Research

Minimum Monthly Wage levels in selected countries:

Pakistan: $491

Nepal: $396

Vietnam: $388

China: $353

Afghanistan: $306

Sri Lanka: $247

India: $215

Solomon Islands: $213

Bangladesh: $48

Riaz Haq said...

#WorldHappinessReport: #India among unhappiest nations, languishes at 136th spot. In #SouthAsia, only Taliban-ruled Afghanistan fared worse than India. #Afghanistan was named the most unhappy country in the world, ranking last on the index of 146 countries

India continued to fare poorly in the world happiness index, with its position marginally improving to 136 as against last year’s 139.

Among the South Asian nations, only Taliban-ruled Afghanistan fared worse than India. Afghanistan was named the most unhappy country in the world, ranking last on the index of 146 countries. Nepal (84), Bangladesh (94), Pakistan (121) and Sri Lanka (127) managed to get better ranks in the list.

Finland topped the list for the fifth time in a row, according to the 10th edition of the World Happiness Report.

Finland was followed by Denmark, Iceland, Switzerland, and the Netherlands. Among other western countries, while the United States managed to bag the 16th position, Britain was ranked 17th and France 20th.

The Happiness report also stated that India was one among the countries that witnessed, over the past 10 years, a fall in life evaluations by more than a full point on the 0 to 10 scale.

Riaz Haq said...

Pakistan Labor Force Survey 2020-21

Refined Activity (Participation) Rate (%)

Pakistan Total 44.9 Male 67.9 Female 21.4

Rural 48.6 Male 69.1 Female 28.0

Urban  Male 65.9 Female 10.0

Riaz Haq said...

#India #currency in circulation up 9.9% to over ₹31 lakh crore in FY22. Share of ₹500 and ₹2,000 notes together rose to 87.1% of total value of banknotes in circulation, despite #Modi's #DigitalIndia and #fintech. #Demonetization #BJP

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

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

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

Riaz Haq said...

India’s retail inflation basket needs to be revised to improve the efficacy of monetary policy, according to a paper by a New Delhi-based economic policy think-tank.

“Higher the weightage of food in overall CPI, the more cumbersome it is for monetary policy to contain inflation,” economists including Deepak Mishra and Ashok Gulati wrote. “The structure of headline inflation in India is quite different from the advanced economies which limits the efficacy of monetary policy in India,” they wrote.

Food and beverages constitute nearly 46% of India’s CPI basket. This is in contrast to many advanced economies where food weights are much lower, such as UK’s 9.3%, US’ 13.2% and Canada’s 15.94%.

The Reserve Bank of India uses retail inflation as a benchmark to set borrowing costs and targets inflation between 2%-6%. Prices have stayed above its mandated range since the beginning of the year, raising a clamor to update the consumer price inflation basket that has not been revised for over a decade.

“This corroborates the urgency to revise CPI with the latest consumption survey weights,” the researchers said. Policy measures need to focus on various supply-side bottlenecks, especially in food items which could be managed by increasing productivity by investing in research and development in agriculture, they said.