World Inequality Report: Over 85% Of Indian Billionaires From Upper Castes, None From Scheduled Tribes


https://www.ndtv.com/india-news/world-inequality-report-over-85-of-...

India's income and wealth inequality, which declined post-independence, began to rise in the 1980s and has soared since the 2000s. Between 2014-15 and 2022-23, the increase in top-end inequality has been particularly striking in terms of wealth concentration. The top 1 per cent of income and wealth shares are now at their highest historical levels. Specifically, the top 1 per cent control over 40 per cent of total wealth in India, up from 12.5 per cent in 1980, and they earn 22.6 per cent of total pre-tax income, up from 7.3 per cent in 1980

This dramatic rise in inequality has made the "Billionaire Raj," dominated by India's modern bourgeoisie, more unequal than the British Raj. It places India among the most unequal countries globally. Current estimates indicate that it takes just ₹ 2.9 lakhs per year to be in the top 10 per cent of income earners and₹ 20.7 lakhs to join the top 1 per cent . In stark contrast, the median adult earns only about ₹ 1 lakh, while the poorest have virtually no income. The bottom 50 per cent of the population earns only 15 per cent of the total national income.

To fully grasp the skewed income distribution, one would have to be close to the 90th percentile to earn the average income. In terms of wealth, an adult needs ₹ 21 lakhs to be in the wealthiest 10 per cent and ₹ 82 lakhs to enter the top 1 per cent . The median adult holds approximately ₹ 4.3 lakhs in wealth, with a significant portion owning almost no wealth. The bottom 50 per cent holds only 6.4 per cent of the total wealth, while the top 1 per cent owns 40.1 per cent , and the top 0.001 per cent alone controls 17 per cent . This means fewer than 10,000 individuals in the top 0.001 per cent hold nearly three times the total wealth of the entire bottom 50 per cent (46 crore individuals).

1.6 Crore Jobs Lost Due To Note Ban, GST, Covid: India Ratings & Research Study


https://trak.in/stories/1-6-crore-jobs-lost-due-to-note-ban-gst-cov...

India’s informal sector has faced a series of macroeconomic shocks since 2016, leading to substantial economic losses. According to India Ratings and Research, the cumulative impact of these shocks, including demonetisation, the rollout of the Goods and Services Tax (GST), and the COVID-19 pandemic, has resulted in an estimated economic loss of ₹11.3 lakh crore or 4.3% of India’s GDP in 2022-23. This blog explores the severe impact on the informal sector, job losses, and the implications for India’s economy.

Impact of Macroeconomic Shocks
Demonetisation, GST, and COVID-19
The informal sector has been severely impacted by demonetisation, the GST rollout, and the COVID-19 pandemic. These shocks have disrupted the functioning of informal enterprises, leading to a decline in economic activity and job losses. Sunil Kumar Sinha, principal economist at India Ratings, noted that 63 lakh informal enterprises shut down between 2015-16 and 2022-23, resulting in the loss of about 1.6 crore jobs.

Decline in Economic Contribution
The Gross-Value Added (GVA) by unincorporated enterprises in the economy in 2022-23 was still 1.6% below the 2015-16 levels. Their compounded annual growth rate (CAGR) fell from 7.4% between 2010-11 and 2015-16 to a 0.2% contraction since then. The real GVA of unincorporated firms in manufacturing, trade, and other services (MTO) dropped significantly, with their share in India’s real MTO GVA falling from 25.7% in 2015-16 to 18.2% in 2022-23.

Employment Challenges
Job Losses and Sector Shrinkage
The informal sector has seen a significant decline in employment. The number of workers employed in the non-agricultural sector increased to 10.96 crore in 2022-23 from 9.79 crore in 2021-22. However, this was lower than the 11.13 crore people employed in the sector in the ‘pre-shock period’ of 2015-16. The manufacturing sector witnessed a notable decline in jobs, with employment dropping from 3.6 crore in 2015-16 to 3.06 crore in 2022-23.

Structural Shift Needed
India’s over 400 million informal labour market requires a structural shift to address the challenges posed by these macroeconomic shocks. The rise in the formalisation of the economy has led to robust tax collections, but the reduced unorganised sector footprint has implications for employment generation. The informal sector’s share in various sectors has decreased sharply, highlighting the need for measures to support and revitalise this critical part of the economy.

Future Prospects and Recommendations
Addressing the Decline
To mitigate the impact of these shocks and support the informal sector, India needs targeted policies and interventions. The government should focus on providing financial assistance, improving access to credit, and enhancing the business environment for informal enterprises. Additionally, measures to ensure job security and create new employment opportunities are crucial to addressing the challenges faced by the informal labour market.

Enhancing Economic Resilience
Strengthening the resilience of the informal sector is essential for sustained economic growth. Promoting digital literacy, enhancing skill development programs, and providing incentives for formalisation can help informal enterprises adapt to changing economic conditions. Ensuring social security and welfare measures for informal workers will also contribute to building a more inclusive and resilient economy.

Conclusion
India’s informal sector has borne the brunt of multiple macroeconomic shocks, resulting in significant economic losses and job reductions. Addressing these challenges requires a comprehensive approach that supports informal enterprises, enhances economic resilience, and promotes inclusive growth. By implementing targeted policies and interventions, India can mitigate the impact of these shocks and ensure the sustained growth of its informal sector.

India ‘clearly has a problem’ finding new drivers for economic growth, JPMorgan’s Jahangir Aziz says

https://www.cnbc.com/2024/07/24/india-clearly-has-a-problem-finding...

India “clearly has a problem” figuring out new drivers for its economic growth even as its economy expands at a fast clip, JPMorgan’s Jahangir Aziz said, following the country’s union budget.

India’s chief economic advisor V Anantha Nageswaran said Monday that the economy is expected to grow at 6.5% to 7% in financial year 2025, lower than the Reserve Bank of India’s 7.2% growth forecast.


India “clearly has a problem” figuring out new drivers for its economic growth even as its economy expands at a fast pace, JPMorgan’s Jahangir Aziz said, following the country’s union budget.

“If you look at India over the last two years post the pandemic, recorded growth has been strong. But if you look at the drivers of growth, it’s essentially these two: Public infrastructure and services export,” Aziz, chief emerging markets economist at JPM, told CNBC’s “Street Signs Asia” on Tuesday.

The country’s finance minister on Tuesday said capital expenditure for fiscal year 2025 will be 11.11 trillion Indian rupees ($133.9 billion) — or 3.4% of GDP — backing India’s ambitions to enhance its physical and digital infrastructure as it strives to become a developed nation by 2047.

According to estimates by the Ministry of Commerce and Industry, India’s services exports will likely hit $30.3 billion in June, compared with $27.8 billion in the same month last year.

“Services export is sort of stabilizing at a high level, it isn’t growing as fast as it was a couple years back,” Aziz said, adding that the government should focus on increasing private investments and boosting consumption.

“It is going to be very difficult for India to keep sustaining the 6% to 7% growth rate just on public infrastructure and on services export … The question is, can India broaden its growth drivers to consumption, but more importantly private investment? We haven’t seen that happen in a long, long time.”

India’s chief economic advisor V Anantha Nageswaran said Monday that the economy is expected to grow at 6.5% to 7% in financial year 2025, lower than the Reserve Bank of India’s 7.2% growth forecast.

According to the International Monetary Fund’s latest World Economic Outlook, the country’s growth is predicted to decline to 6.5% in 2025.

Although India’s large youth population is steering the country toward becoming the world’s third largest consumer market by 2027, consumption is unlikely to increase if high unemployment stands in the way, warned Raghuram Rajan, professor at the University of Chicago Booth School and former governor of the Reserve Bank of India.

The country’s unemployment rate climbed to 9.2% in June, from 7% the month before, according to the Centre for Monitoring Indian Economy.

“You’ve seen consumption growth relatively tepid over the last few quarters, and unless people feel more confident that they have jobs, that they are well paying jobs, you are going to see that be a drag on growth,” Rajan said.

He questioned the employment initiatives such as pledging to train 2 million young people over five years, and providing a month’s worth of wages of about 15,000 rupees ($179) to first-time employees entering the workforce, announced in Tuesday’s budget.

“Are they of the magnitude that India requires given the enormous concerns about joblessness?”