Comment by Riaz Haq on November 14, 2022 at 10:54am

India’s entrenched north-south divide is growing as its population changes, with serious social and political consequences

Hannah Ellis-Petersen in Delhi
Mon 14 Nov 2022 01.30 EST


https://www.theguardian.com/world/2022/nov/14/india-faces-deepening...

In Bihar’s poverty stricken area of Kishanganj, which has one of the highest rates of fertility in India, women said they had only recently begun to learn about the benefits of a having fewer children.

The urge to have sons, who in parts of India are still considered much more desirable than daughters, remained a key motivator for women in the village. Surta Devi, 36, said she had six children in order to make sure she had two sons to “carry on our lineage”.

“It was only after I gave birth to all my children that doctors told me about family planning,” said Devi.

Phullo Devi, 55, an illiterate labourer who had six children before she opted for sterilisation, said she wished she had done things differently. “If I had less children, I would have been able to raise them better and been able to educate them,” she said.

But Devi said things were slowly changing in the village. “Now health workers campaign house-to-house and make people aware about contraception and condoms. I absolutely want my sons and daughters to have less children so they don’t have to live in poverty,” she said.


The ‘youth bulge’
A particular demographic challenge, widespread across India but particularly concentrated in poorer northern states, is that of the “youth bulge”. The median age of an Indian is 29 and the country is grappling with a vast, ambitious and increasingly restless young population, the majority of whom are unskilled, and for whom there are not enough schools, universities, training programmes and most of all, not enough jobs. Across India, youth unemployment is 23% and only one in four graduates are employed. While female literacy is growing, only 25% of women in India participate in the workforce.

Advertisement

In Uttar Pradesh, where the median age is 20, there are over 3.4 million unemployed young people. Earlier this year, riots broke out in Bihar after more than twelve million people applied for 35,000 positions in the Indian Railways.

Vishu Yadav, 25, from Ghazipur district in Uttar Pradesh, has a masters degree, an education diploma and passed a teacher eligibility test, but is unemployed, with teaching jobs scarce and over a million people now applying for officer positions in the state civil service. “It’s a depressing, hopeless situation. I am eligible to become a teacher but I can not secure a position. There are too many young people with qualifications and not enough jobs,” he said.

Poonam Muttreja, the executive director of Population Foundation India, said there was still time for this young population to work to India’s benefit.

“India has a fantastic window of opportunity but it will only be there for approximately the next two decades,” said Muttreja. “We have the capacity to tap into the potential of the youth population but we need to invest in adolescent education, health and sexual health right away if we want to reap the benefits.

“Otherwise, our demographic dividend could turn into a demographic disaster.”

Muttreja said India’s youth risk fuelling population growth unless contraception and family planning services are improved, describing the situation as “woefully inadequate”.

Female sterilisation is still the most widely used contraceptive method in India, and that’s mostly by older married women. Of India’s tiny health budget, only 6% is put aside for family planning, and just 0.4% of that is invested in temporary methods such as the contraceptive pill or condoms.

“Currently we have almost 360 million young people, the majority of whom are at a reproductive age, and that number is only going to increase over the next few decades,” Muttreja said.

Comment by Riaz Haq on November 18, 2022 at 9:03pm

India will become the world’s most populous country in 2023
China is now suffering from a demographic slump

https://www.economist.com/the-world-ahead/2022/11/14/india-will-bec...


China has been the world’s most populous country for hundreds of years. In 1750 it had an estimated 225m people, more than a quarter of the world’s total. India, not then a politically unified country, had roughly 200m, which ranked it second. In 2023 it will seize the crown. The un guesses that India’s population will surpass that of China on April 14th. India’s population on the following day is projected to be 1,425,775,850.

The crown itself has little value, but it is a signal of things that matter. That India does not have a permanent seat on the un Security Council while China does will come to seem more anomalous. Although China’s economy is nearly six times larger, India’s growing population will help it catch up. India is expected to provide more than a sixth of the increase of the world’s population of working age (15-64) between now and 2050.

China’s population, by contrast, is poised for a steep decline. The number of Chinese of working age peaked a decade ago. By 2050 the country’s median age will be 51, 12 years higher than now. An older China will have to work harder to maintain its political and economic clout.

Both countries took draconian measures in the 20th century to limit the growth of their populations. A famine in 1959-61 caused by China’s “great leap forward” was a big factor in persuading the Communist Party of the need to rein in population growth. A decade later China launched a “later, longer, fewer” campaign—later marriages, longer gaps between children and fewer of them. That had a bigger effect than the more famous one-child policy, introduced in 1980, says Tim Dyson, a British demographer. The decline in fertility, from more than six babies per woman in the late 1960s to fewer than three by the late 1970s, was the swiftest in history for any big population, he says.

It paid dividends. China’s economic miracle was in part the result of the rising ratio of working-age adults to children and oldsters from the 1970s to the early 2000s. With fewer mouths to feed, parents could invest more in each child than they otherwise would have. But having more parents than children, an advantage when the children are young, is a drawback as the parents age. The country will now pay a price as the economic-boomer generation retires and becomes dependent on the smaller generation following behind it.

India’s attempt to reduce fertility was less successful. It was the first country to introduce family planning on a national scale in the 1950s. Mass-sterilisation campaigns, encouraged by Western donors, grew and were implemented more forcefully during the state of emergency declared by Indira Gandhi, the prime minister, in 1975-77. Under the direction of her son Sanjay, the government forced men into vasectomy camps on pain of having their salaries docked or losing their jobs. Policemen nabbed poor men for sterilisation from railway stations. Around 2,000 men died from bungled procedures.

Comment by Riaz Haq on November 18, 2022 at 9:03pm

India will become the world’s most populous country in 2023
China is now suffering from a demographic slump

https://www.economist.com/the-world-ahead/2022/11/14/india-will-bec...


Forced sterilisations ended after Indira Gandhi lost an election. Though brutal, the campaign was not thorough enough to cause a dramatic drop in India’s birth rate. India’s fertility has dropped, but by less, and more slowly than China’s. With a median age of 28 and a growing working-age population, India now has a chance to reap its own demographic dividend. Its economy recently displaced Britain’s as the world’s fifth-biggest and will rank third by 2029, predicts State Bank of India. But India’s prosperity depends on the productivity of its youthful people, which is not as high as in China. Fewer than half of adult Indians are in the workforce, compared with two-thirds in China. Chinese aged 25 and older have on average 1.5 years more schooling than Indians of the same age.

That will not spare China from suffering the consequences of the demographic slump it engineered. The government ended the one-child policy in 2016 and removed all restrictions on family size in 2021. But birth rates have kept falling. China’s zero-covid policy has made young adults even more reluctant to bear children. The government faces resistance to its plans to raise the average retirement age, which at 54 is among the lowest in the world. The main pension fund may run out of money by 2035. Yet perhaps most painful for China will be the emergence of India as a superpower on its doorstep.

Comment by Riaz Haq on November 21, 2022 at 8:19am

India's growth to slow in 2023 on fading reopening impact-Goldman Sachs

https://www.reuters.com/world/india/indias-growth-slow-2023-fading-...

Goldman Sachs expects India's economic growth to slow to 5.9% next year, from an estimated 6.9% growth in 2022, as the boost from the post-COVID reopening fades and monetary tightening weighs on domestic demand.

"We expect growth to be a tale of two halves in 2023, with a slowdown in the first half (due to dwindling reopening effects)," Santanu Sengupta, India economist at Goldman Sachs, said in a note on Sunday.

India's growth in the seven months since March 2022, which Goldman Sachs considers the post-COVID reopening, was faster than most other emerging markets in the first seven months after they reopened, the U.S. investment bank said.

"In the second half, we expect growth to re-accelerate as global growth recovers, the net export drag declines, and the investment cycle picks up," Sengupta said.

The Reserve Bank of India (RBI), last week, pegged the domestic growth rate at 7% for 2022-23.

Sengupta expects the government to continue its focus on capital spending and sees signs of the nascent investment recovery continuing, with conducive conditions helping the economy pick up in the second half.

Goldman Sachs expects headline inflation to drop to 6.1% in 2023, from 6.8% in 2022, saying government intervention was likely to cap food prices and that core goods inflation had probably peaked.

"But upside risks to services inflation are likely to keep core inflation sticky around 6% year-on-year," Sengupta added.

Goldman expects the RBI to hike the repo rate by 50 basis points (bps) in December 2022 and by 35 bps in February, taking the repo rate to 6.75%. The forecast is more hawkish than the market consensus of 6.50%.

On India's external position, Sengupta reckons the worst is over, with the dollar likely near the peak. He expects the current account deficit to remain wide due to weak exports, but said growth capital may continue to chase India.

Sengupta pegs the USD/INR INR=IN at 84, 83, and 82 over 3-, 6- and 12-month horizons, respectively, compared with 81.88 currently.

Comment by Riaz Haq on November 22, 2022 at 12:22pm

From Times of India:


The decline in India’s rankings on a number of global opinion-based indices are due to "cherry-picking of certain media reports" and are primarily based on the opinions of a group of unknown “experts”, a recent study has concluded.
A new working paper titled "Why India does poorly on global perception indices" found that while such indices cannot be ignored as "mere opinions" since they feed into World Bank’s World Governance Indicators (WGI), there needs to be a closer inspection on the methodology used to arrive at the data.

https://timesofindia.indiatimes.com/india/indias-declining-rank-in-...

The findings were published by Sanjeev Sanyal, member of the Economic Advisory Council to the Prime Minister and Aakanksha Arora, deputy director of (EAC to PM).

In the report, the authors conducted a case study of three o ..

In the report, the authors conducted a case study of three
opinion-based indices: Freedom in the World index, EIU
Democracy index and Variety of Democracy.
They drew four broad conclusions from the study:
1) Lack of transparency: The indices were primarily based on
the opinions of a tiny group of unknown “experts”.

2) Subjectivity: The questions used were subjective and
worded in a way that is impossible to answer objectively
even for a country.

3) Omission of important questions: Key questions which
are pertinent to a measure of democracy, like “Is the head of
state democratically elected?”, were not asked.

4) Ambiguous questions: Certain questions used by these
indices were not an appropriate measure of democracy
across all countries.

Here's a look at the three indices examined by the study:
Freedom in the World Index

India’s score on the US-based Freedom in the World Index —
an annual global report on political rights and civil liberties
— has consistently declined post 2018.

It's score on civil liberties was flat at 42 till 2018 but dropped
sharply to 33 by 2022. It's political rights score dropped from
35 to 33. Thus, India’s total score dropped to 66 which places
India in the “partially free” category – the same status it had
during the Emergency.

The study found that only two previous instances where
India was considered as Partially Free was during the time of
Emergency and then during 1991-96 which were years of
economic liberalisation.

"Clearly this is arbitrary. What did the years of Emergency,
which was a period of obvious political repression,
suspended elections, official censoring of the press, jailing of
opponents without charge, banned labour strikes etc, have
in common with period of economic liberalisation and of
today," the study asked.
It concluded that the index "cherry-picked" some media
reports and issues to make the judgement.
The authors further found that in Freedom House's latest
report of 2022, India’s score of the Freedom in the World
Index is 66 and it is in category "Partially Free".
"Cross country comparisons point towards the arbitrariness
in the way scoring is done. There are some examples of
countries which have scores higher than India which seem
clearly unusual. Northern Cyprus is considered as a free
territory with a score of 77 (in 2022 report). It is ironical as
North Cyprus is not even recognised by United Nations as a
country. It is recognised only by Turkey," the authors noted.
Economist Intelligence Unit
In the Economist Intelligence Unit (EIU) Democracy Index,
published the research and consulting arm of the firm that
publishes the Economist magazine, India is placed in the
category of “Flawed Democracy”.
Its rank deteriorated sharply from 27 in 2014 to 53 in 2020
and then improved a bit to 46 in 2021. The decline in rank
has been on account of decline in scores primarily in the
categories of civil liberties and political culture.
The authors found that list of questions used to determine
the outcome was "quite subjective", making objective

Comment by Riaz Haq on November 25, 2022 at 6:42pm

India needs to jump-start manufacturing. Here’s how to do it.
By Dhiraj Nayyar

https://www.washingtonpost.com/opinions/2022/11/24/modi-india-econo...

If the Indian economy has an Achilles’ heel, it is the country’s manufacturing sector. Despite rapid economic growth since pro-market reforms began in 1991, the share of manufacturing in India’s gross domestic product has remained stubbornly low, at about 15 percent. (In China, it has been about 30 percent in recent years.) Indian growth has been driven by services, most famously in information technology.

The lack of a large, competitive manufacturing sector has consequences. One statistic more than any other captures the consequence of an underdeveloped manufacturing sector: Just over 40 percent of India’s total workforce is still employed in agriculture and allied activities that account for only 18 percent of GDP. Unlike advanced economies, India does not have an unemployment problem; instead, it struggles with underemployment. In the absence of significant social security, people cannot afford to go without jobs, so they are forced to content themselves with low-productivity, low-wage jobs in farming. Services have not been able to absorb this excess low-skill workforce. In fact, they have not done so in any country that has become rich.

Now that three decades of rapid growth have raised the expectations of the population, there are increasing calls for high-quality jobs. Ironically, China might lend a helping hand. Beijing’s strict “zero covid” policy is severely disrupting global supply chains. The recent shortage of iPhone supplies is just the most prominent example. China now poses a bigger risk to supply chains than at any point during its rise as the factory of the world over the past three decades. Xi Jinping’s consolidation of unchallenged control at last month’s Chinese Communist Party congress marks a firm break with the moderate era initiated by Deng Xiaoping. The deepening authoritarianism in Beijing translates into great unpredictability in the actions of the world’s second-largest economy. The world looks on with growing concern.

The problems don’t end there. Many critical supply chains outside China, for example, are in the neighboring East Asian region, where China has outsize influence. Over 80 percent of leading-edge technology semiconductors are manufactured in just two locations: Taiwan and South Korea, both of which face permanent threats in the form of China and North Korea.

The United States seems to have recognized the risks. Last month, the Biden administration announced what is in effect a “tech war” on China by banning the export of semiconductor chips as well as the technology and equipment used to manufacture them. U.S. allies that have access to similar know-how might follow suit. Given that the Trump administration also cracked down on trade with China, it is fair to assume there is now a bipartisan consensus in the United States on the need to contain Beijing and diversify critical supply chains.

Comment by Riaz Haq on November 25, 2022 at 6:43pm

India needs to jump-start manufacturing. Here’s how to do it.
By Dhiraj Nayyar

https://www.washingtonpost.com/opinions/2022/11/24/modi-india-econo...

India is notorious for missing geopolitical opportunities — but this time might be different. In contrast to his predecessors, who mostly hailed from the agricultural heartland of North India, Prime Minister Narendra Modi comes from the western coastal state of Gujarat, which has long given priority to manufacturing. In Gujarat, manufacturing contributes 30 percent to the state’s GDP, a level comparable to China’s.

Having served as chief minister of Gujarat for nearly 13 years before he became prime minister, Modi is acutely aware of what manufacturing needs to thrive. Since he became prime minister in 2014, Modi has tried to make life easier for businesses by cutting regulations and incentivizing bureaucrats to speed up approval processes. Now, in his second term in office, he is going further by embracing industrial policy.

India’s long history of failed state intervention has made politicians wary of industrial policy. Yet in recent years, as manufacturing continues to lag, Modi has opted to intervene. His production-linked incentives program is designed to reward domestic and foreign-owned firms across 13 chosen sectors, from automobiles to pharma to advanced batteries. The aim is to ensure global competitiveness by achieving greater scale in production. The program is set to distribute about $25 billion to industry over four years.

The second intervention is his program for manufacturing semiconductor and display factories, which offers up to $10 billion in the form of capital subsidy to potential investors. (Disclosure: My company, Vedanta, has applied for subsidies from this program as part of its investment in a semiconductor and display manufacturing joint venture with Taiwan’s Foxconn.) Interestingly, the subsidy program was announced before Congress passed its Chips and Science Act this year.

Modi’s embrace of industrial policy is a gamble — but it might be India’s best hope. Subsidies on their own won’t be enough. Success depends on whether the Indian manufacturing sector can prove its ability to compete in global markets. That will likely require a whole host of other structural reforms — a huge challenge in India’s noisy democracy, where a multitude of vested interests complicates the withdrawal of protections and unproductive subsidies. This will require all of Modi’s considerable political skills (and perhaps a third term in office starting in 2024).

But the country’s manufacturers have no time to waste. Right now, firms exiting China are looking for other options. India needs to do everything to ensure it is the first choice.

Comment by Riaz Haq on November 26, 2022 at 12:53pm

Aakar Patel
@Aakar__Patel
manufacturing share of gdp has fallen after launch of make in india

a report by ashoka ceda’s ankur bhardwaj showed jobs in manufacturing in india had halved after 2017

the beauty of new india is that popularity is dissociated from performance/governance

https://twitter.com/Aakar__Patel/status/1596395004733202432?s=20&am...

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

CEDA-CMIE Bulletin No 4: May 2021

With the second wave of the coronavirus pandemic battering India at present, the Indian economic outlook looks bleak for the second year in a row. In 2020-21, India’s real GDP growth is estimated to be minus 8%. This would also put pressure on India’s employment numbers. In previous bulletins, we have analyzed the impact of Covid-19 pandemic on employment, individual and household incomesand expenditures in 2020.

In this CEDA-CMIE Bulletin, we try to take a longer-term view of sector-wise employment in India. We base this on CMIE’s monthly time-series of employment by industry going back to the year 2016. For this bulletin, we have focused on seven sectors, viz. agriculture, mines, manufacturing, real estate and construction, financial services, non-financial services, and public administrative services. These sectors make up for 99% of total employment in the country.

https://ceda.ashoka.edu.in/ceda-cmie-bulletin-manufacturing-employm...

Comment by Riaz Haq on December 6, 2022 at 10:30am

How Modi Led India Into a COVID Catastrophe - World News

https://www.haaretz.com/world-news/2021-04-27/ty-article-opinion/.h...

Apr 27, 2021 — Narendra Modi's attempts to censor the news and massage death rates can’t hide his failure to prepare India for its disastrous second COVID wave. Indians are dying, and so is the prime minister's 'strongman' image

India's Covid crisis delivers a blow to brand Modi - BBC News

https://www.bbc.com/news/world-asia-india-56970569

May 8, 2021 — Back in 2002, more than 1,000 people, mostly Muslims, died in riots that erupted in Gujarat state after 60 Hindus were killed in a train fire.

India's excess deaths during pandemic up to 4.9 mln, study ...

https://www.reuters.com/world/india/indias-30093-new-covid-19-cases...

Jul 20, 2021 — July 20 (Reuters) - India's excess deaths during the COVID-19 pandemic could be as high as 4.9 million, a new study shows, providing further ...

The India Fix: Job riots in UP-Bihar bring home the urgency of India's unemployment crisis

https://scroll.in/article/1016276/the-india-fix-job-riots-in-up-bih...

Jan 31, 2022 — These job riots are an urgent wake up sign for India's politicians. 

Burning Trains Reveal Wrath of Millions Without Jobs in India

https://www.bloomberg.com/news/features/2022-07-07/burning-trains-s...

Jul 7, 2022 — Violent protests by the unemployed turn the spotlight on Modi's campaign pledge to create millions of jobs.

At 75, India seeks way forward in big but job-scarce economy

https://apnews.com/article/technology-india-economy-ca599ec7f67e2c8...

Aug 10, 2022 — NEW DELHI (AP) — As India’s economy grew, the hum of factories turned the sleepy, dusty village of Manesar into a booming industrial hub, cranking out everything from cars and sinks to smartphones and tablets. But jobs have run scarce over the years, prompting more and more workers to line up along the road for work, desperate to earn money.

Role Of Agriculture In Indian Economy 2022 - Know All Facts

https://pasandhai.in/role-of-agriculture-in-indian-economy/#:~:text....

Due to the large population of India being associated with agriculture, many jobs come out of it. Talking about the employment generated from agriculture in India, according to the data of 2022, 41.49% people get employment from agriculture.

India Rural Population 1960-2022 | MacroTrends

https://www.macrotrends.net/countries/IND/india/rural-population

India rural population for 2021 was 900,239,774, a 0.25% increase from 2020.

India GDP sector-wise 2021 - StatisticsTimes.com

https://statisticstimes.com/economy/country/india-gdp-sectorwise.php

Comment by Riaz Haq on December 11, 2022 at 8:19am

India Can’t Dethrone China as the World’s Manufacturing Power

https://nationalinterest.org/blog/buzz/india-can%E2%80%99t-dethrone...

Due to its insufficient labor quality and infrastructure investment, fractured society, market restrictions, and trade protectionism, the South Asian nation is unlikely to replace China.


With everything seemingly going right for India, can it really replace China on the global supply chain? Unfortunately for India, due to its insufficient labor quality and infrastructure investment, fractured society, market restrictions, and trade protectionism, the South Asian nation is unlikely to replace China in the global manufacturing supply chain anytime soon.

To begin with, India’s labor quality and infrastructure availability fall far behind China’s. Many people consider India’s low labor costs a key advantage vis-à-vis China. Indeed, India’s daily median income in urban areas in 2017 was $4.21, roughly sixteen years behind China’s, which was $12.64. However, what good are low labor costs if the benefits are also relatively low? Despite India’s laudable development achievements in the past few decades, its capability enhancements have lagged far behind China’s. India’s share of stunted children today is roughly the same as China’s over two decades ago, its life-expectancy growth is twenty-five years behind China’s, and its adult literacy rate is roughly three decades behind.


Not to mention, India’s state capacity is less extensive than China’s, and many Indians who grow up in slums live their entire lives without government files. Therefore, India’s lag in labor capability enhancement behind China is likely worse than what official data suggest. These factors affect workers’ efficiency on factory floors and their ability to advance their careers in manufacturing over the long term. Low labor costs might not make up for these low labor qualities. In fact, if India cannot deal with these capability deficits effectively, its surging population might undermine India’s social stability, although the Modi administration has done well so far in this respect.

Besides labor, manufacturing also requires capital, especially infrastructure. Few developing countries can compete with China in this regard, and India is no exception. To be clear, when foreign investors chose China to be their manufacturing hub, it was, to a certain extent, a coincidence. In 1994, China reformed its tax system to enhance the central government’s control over the country’s fiscal revenues. The reform forced local governments to look for new sources of tax income and ultimately resort to local government financing vehicles (LGFVs). Because the land appreciation tax went to local governments, they began to encourage construction, sell rights to land use, and use tracts of land as collateral to fund infrastructure in the form of LGFVs. The LGFVs led to an abundance of investments and many empty industrial parks. When Western investors started to look overseas for places to build factories around the same period, China seemed especially appealing due to its availability of capital.

-------

Despite its many advantages and Western countries’ support, it is unlikely that India can replace China in the global manufacturing supply chain for the foreseeable future. Economically, despite its low labor costs, the low quality of India’s labor pool that stems from its deficits in capability development offset its labor advantages, and inadequate infrastructure investments put India at a disadvantage regarding capital costs. Socially, India’s fractured multi-dimensional society creates different economic demands for various groups, undermining the advantages of India’s large population. Politically, India’s market restrictions make its business environment less favorable and decrease its industrial labor supply. Meanwhile, protectionist traditions hinder India’s ability to adopt an export-oriented growth model and integrate itself into the global supply chain.

Comment

• ‹ Previous
• 1
• …
• 11
• 12
• 13
• 14
• 15
• …
• 19
• Next ›
• Page