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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

https://www.business-standard.com/article/current-affairs/india-s-u...


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


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

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


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

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

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

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

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

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

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

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

https://economictimes.indiatimes.com/jobs/indias-labour-force-shrin...

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

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

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

https://www.cmie.com/kommon/bin/sr.php?kall=warticle&dt=2022041...

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

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

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

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

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

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

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

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

The fall in manufacturing jobs is surprising. After a disastrous 2020-21, manufacturing jobs had been recovering through most of 2021-22. Except in July 2021 when employment in manufacturing was lower than it was in the year ago month, and that was by a whisker, employment in all other months till February 2022 was higher than in the corresponding year ago month. March was expected to maintain the momentum. The fall in March 2022 is therefore surprising. The March 2022 employment was a 12.5 per cent fall over February (which had lesser days) and it was a 4.3 per cent fall over March 2021, which was on the eve of the second wave of Covid-19. The fall in March is also surprising because traditionally March was seasonally a far busier month than other months of the year.

The construction sector has recovered from the lockdown shocks. But, it has stagnated at employing about 64 million. It is unable to get back to its 68-72 million levels of employment in 2018. In March 2022, employment in the construction industry was down to less than 62 million. Employment in retail trade is comparable to construction. The trade employed a record 70 million in February 2022. This fell to 65.6 million in March.

The 1.4 million fall in employment in March translates into a fall in the employment rate as well. The employment rate, or the proportion of the working-age population that is employed, is the most important labour market indicator. The employment rate fell from 36.7 per cent in February 2022 to 36.5 per cent in March.

Data for March 2022 has revealed once again that the unemployment rate is an unreliable indicator of economic conditions.

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

https://www.business-standard.com/article/current-affairs/rss-stres...

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

https://economictimes.indiatimes.com/jobs/middle-income-households-...

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

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

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

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

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

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

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

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

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

https://auto.economictimes.indiatimes.com/news/industry/indias-auto...

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

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

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

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

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

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

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

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

First, the IMF’s estimation.

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

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

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

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

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

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

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

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

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

Another question arises from the use of the CPHS.

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

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


https://www.business-standard.com/article/economy-policy/india-s-jo...

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

CMIE: #India's #unemployment rate jumped to 7.83% in April from 7.60% in March. #Urban #jobless rate soared to 9.22% from 8.28% in March. #Modi #BJP #economy #Hindutva #Islamophobia https://www.business-standard.com/article/economy-policy/india-s-un...

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

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




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

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


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

"This is a good development," Vyas said.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

https://bmcpublichealth.biomedcentral.com/articles/10.1186/s12889-0...

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



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

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

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

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


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

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

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

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

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

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

Comparative performance: Global Hunger Index


https://www.theindiaforum.in/article/persistence-food-insecurity-ma...

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

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

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

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

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

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

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

https://www.india.com/lifestyle/diet-of-average-indian-lacks-protei...

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

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

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

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

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

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

Why is India's economy looking so bleak?

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

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


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

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

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

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

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

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

Biting the bullet

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


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

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

Why is India's economy looking so bleak?

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

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


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

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

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

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

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

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

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

Why is India's economy looking so bleak?

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

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

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

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

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

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

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

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

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

Why is India's economy looking so bleak?

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

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

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


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

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

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

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

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

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

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

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

https://scroll.in/article/1024582/as-the-wealthy-converge-on-davos-...


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


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


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

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

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

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

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

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

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

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

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

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

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

Modi Govt @ 8
SUBHASH CHANDRA GARG

https://www.moneycontrol.com/news/opinion/modi-govt-8-indian-econom...


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

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

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

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

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

Wobbly Second Term

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

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

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

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

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

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

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

The Way Ahead

India is in a state of policy stasis.

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

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

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

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

CNN GPS with Fareed Zakaria May 15, 2022


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



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

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

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

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

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

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

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

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

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

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

[10:45:10]

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

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

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

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

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

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


https://www.business-standard.com/article/economy-policy/earning-rs...

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

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

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

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

https://www.indiatimes.com/news/india/if-you-earn-rs-25000-per-mont...

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

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


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


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

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

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

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

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

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


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

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

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


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

What’s the Average Salary in Pakistan in 2022?

https://biz30.timedoctor.com/average-salary-in-pakistan/

The average salary in Pakistan is 81,800 PKR (Pakistani Rupee) per month, or around USD 498 according to the exchange rates in August 2021.

The Pakistan average is significantly lower than the US average (USD 7,900) but comparable to India (USD 430), Ukraine (USD 858), and the Philippines (USD 884). It’s one of the many reasons why Pakistan is a viable alternative to these popular outsourcing destinations.

However, you’ll need a more comprehensive analysis to understand the total expenditure on a Pakistani employee.

In this article, we’ll share vital figures and comparisons related to the average salary in Pakistan. We’ll also explore the country’s payroll rules and top reasons to outsource there.

Average Salary in Pakistan: Key Figures

The average salary figure for a country is the sum of the salaries of the working population divided by the total number of employees. It may also include benefits such as housing, transport allowance, insurance, etc., on top of the employee’s basic salary.

The average salary is usually a good indicator of the typical income of a working citizen in the country.

Here are some key salary figures for Pakistan according to Salary Explorer, a salary comparison website:

The average remuneration in Pakistan may vary between 20,700 PKR per month (average minimum salary) and 365,000 PKR per month (maximum average). Please remember that this is an average salary range, and the actual maximum salary may be higher.

The median salary in Pakistan is 76,900 PKR per month.

If we sort the employee salaries in Pakistan in ascending or descending order, the median represents the central point in the distribution. In other words, half the Pakistani employees earn more than 76,900 PKR per month, while the other half earn less.

These national average salary figures may give you a general estimate and help compare expenditure on employee salaries among different countries. 

But it won’t help you determine the exact remuneration for each employee in your company. 

For that, you’ll need to consider other factors like

• The type of industry.
• Years of experience and qualification of the employee.
• The kind of work: entry level, professional, etc.
• The mode of work: full-time, part-time, remote, etc.
• The region where you are operating.
• The cost of living in the country.

So let’s take a more comprehensive look at the salary information in Pakistan.

A. Average Salary by Industry

The average salary in a country may vary significantly with the type of industry. 

Pakistan is known for its cotton, textile, and agriculture exports, and these industries have a significant share in the country’s GDP. Due to this reason, the manufacturing sector usually employs a large portion of the Pakistani workforce. 

Here’s an industry-wise breakdown of the average salaries in Pakistan:

Source: salaryexplorer.com

B. Average Salary by Region

While the capital city of Islamabad is the administrative center of the country, Karachi and Lahore are the major commercial hubs in Pakistan. 

The average employee salary in the country depends on which city you’re operating in.

Here’s the salary report for major Pakistani cities:

Source: salaryexplorer.com

C. Salary Variations by Education

As a general rule of thumb, a Pakistani employee with higher educational degrees gets a higher pay scale than their peers with a lesser degree for the same type of work. 

But how does the pay scale change with the education level?

According to Salary Explorer:

• Employees with a diploma or certificate usually earn 17% more than those fresh out of high school.
• Employees with a bachelor’s degree have 24% higher average salaries than certificate and diploma holders.
• Professionals with post-graduate degrees enjoy a 29% salary gain over bachelor’s degree holders.
• Advanced degrees such as a Ph.D. fetches 23% more income than those with a master’s degree.

D. Salary Variations by Experience Level

The salary scale of a Pakistani employee also varies significantly with the years of experience they have.

Employees with experience between two to five years earn 32% more salary than freshers. The salary gain is even higher (36%) when employees reach the five-year experience mark.

The subsequent salary hikes at ten, fifteen, and twenty-year milestones are about 21%, 14%, and 9%, respectively.

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

https://www.pbs.gov.pk/sites/default/files/labour_force/publication...

Pakistan Labor Force Survey 2020-21

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

https://www.pbs.gov.pk/sites/default/files/labour_force/publication...

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

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

https://www.livemint.com/news/india/india-ranks-lowest-in-environme...

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Pakistan Rank 176 EPI Score 24.60 Ten Year Change 1.40

India Rank 180 EPI Score 18.90 Ten Year Change -0.60

Bangladesh Rank 177 EPI Score 23.10 Ten Year Change -1.90

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

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

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

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

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

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

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

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

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

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

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

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

https://www.southasiainvestor.com/2022/06/economic-survey-pakistani...

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


https://www.livemint.com/news/71-indians-can-t-afford-a-healthy-mea...

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

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

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

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

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

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

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

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

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

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

https://www.tbsnews.net/bloomberg-special/90-women-india-are-shut-o...

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

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

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

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

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

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

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

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

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

https://www.tbsnews.net/bloomberg-special/90-women-india-are-shut-o...

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

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

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


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

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

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

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

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

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

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

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

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

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

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

https://www.tbsnews.net/bloomberg-special/90-women-india-are-shut-o...

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

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

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

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

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

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

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

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

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

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


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

Pakistan Labor Force Survey 2020-21



Refined Activity (Participation) Rate (%)

Pakistan Total 44.9 Male 67.9 Female 21.4

Rural 48.6 Male 69.1 Female 28.0

Urban Male 65.9 Female 10.0

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

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

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

https://www.reuters.com/world/india/indias-female-labour-participat....

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

By Emily Schmall and Sameer Yasir

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

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

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

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

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

“Sometimes, during nights, I really get scared: What if I am not able to get anything?” she said. “All of my friends are suffering because of unemployment.”
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The struggles of working-class Indians, and the millions of unemployed, may eventually cause a drag on growth, economists say.
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NEW DELHI — On paper, India’s economy has had a banner year. Exports are at record highs. Profits of publicly traded companies have doubled. A vibrant middle class, built over the past few decades, is now shelling out so much on movie tickets, cars, real estate and vacations that economists call it post-pandemic “revenge spending.”

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

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

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

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

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

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

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

By Emily Schmall and Sameer Yasir

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



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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

https://scroll.in/latest/1018580/india-asked-washington-not-to-ment...


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

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

Juster, who was the envoy to India between 2017 and 2021, had said in January 2021 that Washington closely coordinated with Delhi amid its standoff with Beijing, but left it to India to provide details of the cooperation.
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Former United States Ambassador to India Kenneth Juster has said that Delhi did not want Washington to mention China’s border aggression in its statements.

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

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

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During the TV show, defence analyst Derek Grossman claimed that Moscow was not a “friend” of India, saying that Russian President Vladimir Putin met his Chinese counterpart Xi Jinping at the Beijing Olympics. Grossman told the news anchor that Putin and Xi had then said that their friendship had “no limits”.

He claimed that India’s strategy to leverage Russia against China did not have any effects. “In fact, Russia-China relations have gotten only stronger.”

To this, Shivshankar said that before passing any judgement on India and Russia’s relationship, he must ask if US President Joe Biden had condemned China’s aggression at the borders along the Line of Actual Control or mentioned Beijing in a joint statement with Prime Minister Narendra Modi.

Grossman said: “To my understanding, the US has asked India if it wanted us to do something on the LAC but India said no – that it was something that India can handle on its own.”

Juster then backed Grossman’s contention.

Why Multinational companies are quitting #India? 8 years after #Modi first urged foreign companies to “Make in India”, #Indian #economy is seeing thousands of foreign firms leaving. #MakeinIndia #Islamophobia #Hindutva #BJP #bigotry #violence #hate

https://www.deccanherald.com/business/business-news/why-mncs-are-qu...

Eight years after Prime Minister Narendra Modi first urged multinational companies to “Make in India”, Asia’s third-largest economy is seeing many foreign firms give up on the country

A slew of big names including German retailer Metro AG, Swiss building-materials firm Holcim, US automaker Ford, UK banking major Royal Bank of Scotland, US bikemaker Harley-Davidson and US banking behemoth Citibank have chosen to
pull the plug on their operations in India or downsize their presence here in recent years. That is a worrying trend at a time when India is trying to position itself as an alternative to China, in a post-Covid world where many MNCs are looking to diversify their supply chain.

A total of 2,783 foreign companies with registered offices or subsidiaries in India closed their operations in the country between 2014 and November 2021, Commerce and Industry Minister Piyush Goyal told Parliament late last year. That is not a small figure, given that there are only 12,458 active foreign subsidiaries operating in India.

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This might also explain why some of the world’s biggest chipmakers have not warmed up to India despite its government rolling out a red carpet for them by approving a $10 billion incentive plan last year to establish chip and display industries in the
in the country.

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When asked if he would consider setting up a factory in India, Tesla CEO Elon Musk tweeted last month that the automaker would not set up a manufacturing plant “in any location where we are not allowed first to sell & service cars”.

Musk will instead look for potential opportunities in Indonesia, known for its business-friendly policy and production of nickel, a critical ingredient in making EV batteries.

#India's emerging twin #deficit problem: Rising fiscal deficit & growing trade deficit. If unchecked, both deficits could cause a serious #economic crisis, including Balance of Payments crisis. #poverty #unemployment #hunger #Modi #BJP https://indianexpress.com/article/explained/everyday-explainers/ind... via @IndianExpress

In its latest ‘Monthly Economic Review’, the Ministry of Finance has painted an overall optimistic picture of the state of the domestic economy. “The World is looking at a distinct possibility of widespread stagflation. India, however, is at low risk of stagflation, owing to its prudent stabilization policies,” it states.

The economic growth outlook is likely to be affected by several factors owing to the trade disruptions, export bans and the resulting surge in global commodity prices —all of which will continue to stoke inflation — as long as the Russia-Ukraine conflict persists and global supply chains remain unrepaired. “However, the momentum of economic activities sustained in the first two months of the current financial year augurs well for India continuing to be the quickest growing economy among major countries in 2022-23,” states the Finance Ministry report.

But, given the uncertainties, the report highlights two key areas of concern for the Indian economy: the fiscal deficit and the current account deficit (or CAD).

The report states that “as government revenues take a hit following cuts in excise duties on diesel and petrol, an upside risk to the budgeted level of gross fiscal deficit has emerged”.

The fiscal deficit is essentially the amount of money that the government has to borrow in any year to fill the gap between its expenditures and revenues. Higher levels of fiscal deficit typically imply the government eats into the pool of investible funds in the market which could have been used by the private sector for its own investment needs. At a time when the government is trying its best to kick-start and sustain a private sector investment cycle, borrowing more than what it budgeted will be counter-productive.

The report underscores the need to trim revenue expenditure (or the money government spends just to meet its daily needs). “Rationalizing non-capex expenditure has thus become critical, not only for protecting growth supportive capex but also for avoiding fiscal slippages,” it states. “Capex” or capital expenditure essentially refers to money spent towards creating productive assets such as roads, buildings, ports etc. Capex has a much bigger multiplier effect on the overall GDP growth than revenue expenditure.

Current account deficit

The current account essentially refers to two specific sub-parts:

* Import and Export of goods — this is the “trade account”.

* Import and export of services — this is called the “invisibles account”.

If a country imports more goods (everything from cars to phones to machinery to food grains etc) than it exports, it is said to have a trade account deficit. A deficit implies that more money is going out of the country than coming in via the trade of physical goods. Similarly, the same country could be earning a surplus on the invisibles account — that is, it could be exporting more services than importing.

If, however, the net effect of a trade account and the invisibles account is a deficit, then it is called a current account deficit or CAD. A widening CAD tends to weaken the domestic currency because a CAD implies more dollars (or foreign currencies) are being demanded than rupees.

The Ministry’s worry is that costlier imports such as crude oil and other commodities will not only widen the CAD but also put downward pressure on the rupee. A weaker rupee will, in turn, make future imports costlier. There is one more reason why the rupee may weaken. If, in response to higher interest rates in the western economies especially the US, foreign portfolio investors (FPI) continue to pull out money from the Indian markets, that too will hurt the rupee and further increase CAD.

#Indian Stock market in bear territory. Its value is already down nearly 20% from its January peak of about $3.7 trillion. Foreign investors have been selling Indian stocks at a record pace, withdrawing about $32 billion since September 2021. #Modi #BJP https://www.business-standard.com/article/markets/three-charts-show...

As surging inflation and the end of global easy-money policies send Indian stocks spiraling down from all-time highs, three charts show the pain is unlikely to end anytime soon.

The S&P BSE Sensex Index has fallen more than 15% from its October high, nearing the 20% loss that denotes a bear market. The selloff comes as climbing costs and a record plunge in the rupee have forced the nation’s central bank to join global peers in raising interest rates.

The Indian stock market’s value is already down nearly 20% from its January peak of about $3.7 trillion dollars. The unsupportive economic backdrop combined with an unprecedented exodus of foreign investors and earnings estimates that appear poised to tumble cloud the outlook for a rebound.

“We expect the markets to further correct from here,” said Benaifer Malandkar, chief investment officer at Raay Global Investments Pvt. “Expectation is that by the second quarter, most negative news, the outcome of the Fed’s actions will get priced in.”

Foreigner Flight

Overseas investors have been selling Indian stocks at a record pace, withdrawing about $32 billion from the market since September. The retreat of foreigners is part of a wave hitting nations including South Korea and Taiwan as well.

“India is not in isolation since it’s part of the emerging market basket, and clearly the EMs are out of favor,” said Raay Global’s Malandkar. “Until the US Fed rate is at its peak, we will see redemptions happening across EMs.”

Rosy Estimates

The drop in Indian equities has mainly been caused by valuation contraction so far. Earnings estimates for the NSE Nifty 50 Index are yet to clock a meaningful decline like that seen in MSCI Inc.’s broadest measure for Asian equities.

Over the past few weeks, strategists at Sanford C. Bernstein Ltd., Bank of America Corp. and JPMorgan Chase & Co. have expressed concerns about the earnings optimism that has surrounded India. Pending any rebound in valuations, estimate cuts are likely to pull stocks down further.

Suffering Small-Caps

Smaller stocks have been hit harder by investor risk aversion, with gauges of small and mid-cap Indian shares having already entered bear markets. Market breadth has weakened, with just 16% of S&P BSE 500 Index stocks trading above their 200-day average level, the lowest level in two years.

Explained: What FPIs’ market exit means
Foreign portfolio investors have pulled out Rs 42,000 crore this month amid rising inflation and monetary policy tightening in the US. How does this impact the market and the rupee, and what should you do?

https://indianexpress.com/article/explained/fpi-exit-stock-market-g...

Sustained capital outflows from the capital market have unnerved the stock markets and led to a weakening of the rupee amid rising inflation across the globe. With the US Federal Reserve set to hike rates further, outflows are likely to continue, putting pressure on the Indian currency.

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Aggressive rate hike by the US Federal Reserve, coupled with elevated inflation and high valuation of equities continued to keep foreign investors at bay from the Indian stock market as they pulled out Rs 31,430 crore in this month so far. With this, net outflow by Foreign Portfolio Investors (FPIs) from equities reached Rs 1.98 lakh crore so far in 2022, data with depositories showed. Going forward, FPI flows to remain volatile in the emerging markets on account of rising geopolitical risk, rising inflation, tightening of monetary policy by central banks, among others, Shrikant Chouhan, Head - Equity Research (Retail), Kotak Securities, said. According to the data, foreign investors withdrew a net amount of Rs 31,430 crore from equities in the month of June (till 17th).

http://www.millenniumpost.in/business/fpis-withdraw-rs-31430-crore-...

The massive selling by FPIs continued in June too as they have been incessantly withdrawing money from Indian equities since October 2021. Shrikant attributed latest selling to rising inflation, tight monetary policy by global central banks and elevated crude oil prices. Global investors are reacting to increased risks of a global recession as the US Federal Reserve was forced to raise interest rates by 75 basis points due to persistently elevated inflation. Moreover, it also indicated to continue its aggressive stance to contain stubbornly high inflation. "Strengthening of the dollar and rising bond yields in US are the major triggers for FPI selling. Since the Fed and other central banks like Bank of England and Swiss central bank have raised rates, there is synchronised rate hikes globally, with rising yields. Money is moving from equity to bonds," V K Vijayakumar, Cheif Investment Strategist at Geojit Financial Services, said.

On the domestic side as well, inflation has been a cause for concern, and to tame that, RBI has also been increasing rates

#Indian startups laid off over 10,000 #employees in the first 6 months of 2022. At least 27 startups fired workers across #India. As investors put pressure on #startups in India to cut costs, employees are collateral damage. #Ola #Blinkit #Modi #BJP https://qz.com/india/2181236/ola-blinkit-and-others-laid-off-10000-...


In a widely-circulated 2020 memo, marquee investor Sequoia had warned portfolio companies to keep their staffing levels sustainable. US-based startup accelerator, Y Combinator, also asked founders of its portfolio companies to “plan for the worst.”

The startups, though, seem to have botched it up. They have mostly cited cost-cutting and extended cash runways as reasons for slashing headcount. Macroeconomic uncertainties surely didn’t help.

“War in Europe, impending recession fears, and Fed rate hikes have led to inflationary pressures with massive correction in stocks globally and in India as well,” Vamsi Krishna, CEO of e-learning platform Vedantu, wrote in a May 18 blogpost. “Given this environment, capital will be scarce for upcoming quarters.”

There are myriad other ways to curb spending—a hiring freeze, curtailed marketing, saving on real estate—but laying off is evidently quick and easy. This is particularly so at tech startups which typically tend to over-hire while business is brisk.

Worryingly, the correction is far from over. Experts estimate that the layoff count will rise to 60,000 in the next six-to-nine months.

India’s Fintech Reckoning Arrives
Regulators are cracking down on financial technology firms—many backed by foreign capital—that were flourishing in the gray areas

https://www.wsj.com/articles/indias-fintech-reckoning-arrives-11655...

After a period of unbridled growth, India’s fintech industry faces a regulatory reckoning.

Things may not get as bad as they did in India’s rival China—but investors should still proceed with extreme caution until the dust settles.

On Monday, India’s central bank banned the loading of so-called prepaid payment instruments (PPIs)—essentially prepaid purchasing cards—using credit lines, jeopardizing several fintech buy-now-pay-later business models. Players such as Slice and Uni Cards—which are funded by Tiger Global, Accel, General Catalyst and Insight Partners—are likely to be affected.

Fintech players have issued hundreds of thousands of such cards with the aid of PPI licenses, and then loaded them using credit lines from banks and nonbanking financial institutions, according to brokerage Macquarie. These new-age credit cards—essentially a way to make an end run around strict credit card regulations—were targeted toward younger Indians, many of whom don’t have a long credit history.

Monday’s move indicates that the Reserve Bank of India is solidly against such a rent-a-license model where fintech startups tie up with banks and nonbanking financial institutions to sell products—a common practice in India.

In the past 18 months, the country’s financial technology sector—which has become systemically important to India—has absorbed about $14 billion of investment capital, according to data shared by Tracxn. The top global venture-capital firms have exposure—including Sequoia Capital, Y Combinator, AngelList, Accel and LetsVenture.

The RBI has in fact been advocating for tighter regulations for months: Earlier in 2022 it said it had formed a new fintech department. Monday’s circular is probably the beginning of a wider crackdown on fintech. And protecting vulnerable borrowers at a time of high inflation, tight liquidity and slowing growth is high on the RBI’s agenda. Companies in good standing with the regulator will likely emerge in better shape.

In the coming months, the Bank will likely introduce formal rules for India’s loosely regulated digital-lending ecosystem, including collection practices, data privacy, disclosures and capital-adequacy requirements. Fintech lending companies doubled disbursements in the financial year ending in March 2022 to a total of $2.3 billion, according to a report by the Fintech Association for Consumer Empowerment (FACE). Needless to say, all this will probably weigh on profitability.

Amid India’s tech IPO boom, shares of India’s top fintech company Paytm continue to languish. This is due not only to the lack of a sustainable and profitable business model but also to the RBI’s scrutiny. Several of Paytm’s peers will now appear likely to face much more scrutiny, too.

As investors in Chinese fintech recently discovered, once your industry gets on the bad side of regulators—even if a given company isn’t an initial target—things can go downhill fast. Investors would be wise to steer clear of any Indian fintech firms which have been bending the rules until there is more clarity on how far this crackdown will run.