Comment by Riaz Haq on September 4, 2022 at 7:50pm

Protests in #India over rising #food and #fuel bills, as #unemployment soars. Opposition leader Rahul Gandhi has accused Prime Minister Narendra #Modi of allowing food and fuel prices to rocket by up to 175%. #BJP #Hindutva #economy #Islamophobia #hunger https://news.sky.com/story/protests-in-india-over-rising-food-and-f...

Mr Gandhi suggested the price of petrol, diesel, cooking gas and essential food items including wheat have rocketed between 45% and 175% since Mr Modi took control eight years ago in 2014.

The politician - whose father, Rajiv, was a former prime minister of India - addressed crowds at a rally in Ramlila Maidan, traditionally used to hold religious festivals and events, in capital New Delhi on Sunday.

He told his 21.4million Twitter followers: "Congress party unites the country. Only Congress can bring the country on the path of progress.


"We will go straight to the public and tell them the truth, whatever is in their heart, they will understand."

Earlier, he had tweeted: "Today, people have to think ten times before buying what they need.

Comment by Riaz Haq on September 21, 2022 at 8:43pm

India's Economic Situation 'Bleak'; We Know the Issue but Not the Solution: Pronab Sen
In an interview with Karan Thapar, the country's former chief statistician said that India will miss the RBI's target of 7.2% growth for this financial year and that it'll come around 6-6.5%. (real growth going forward will be around 4%)

Pranab Sen: Demonetization and COVID lockdown dried up the informal credit and killed a large percentage of small and medium enterprises.

https://thewire.in/video/watch-indias-economic-situation-bleak-we-k...

https://youtu.be/p3avEIThSN8

In an interview where he paints a bleak and disturbing picture of the state of the economy, India’s former chief statistician professor Pronab Sen has said that we can identify the problems that are retarding growth but we don’t know how to tackle them.

Worse, professor Sen says he is not sure if the government has diagnosed the problems because it has not spoken about them and its silence can be variously interpreted. Consequently, he says that India will miss the RBI’s target of 7.2% growth for this financial year and that it will growth will only come in somewhere around 6-6.5%.

However, he points out, in real terms growth will actually be just 4% which, he adds, is at least 2.5% below the growth India needs to create jobs for its population. This means, professor Sen points out, we can boast of being the fastest growing economy but it’s equally true that we are considerably falling short of the rate of growth we need (6.57%) to create sufficient jobs for our people which, in turn, will boost consumption and spending and create incentives for investment.

In these circumstances, professor Sen said that first quarter growth of FY23 at 13.5% is clearly disappointing.

In a 42-minute interview to Karan Thapar for The Wire, professor Sen, who is currently the country director of the International Growth Centre, identified two critical areas where the Indian economy faces serious problems about which we are not sure what we should do.

The first is the MSME sector which, he added, has undoubtedly shrunk in size over the last two years. The problem is not a question of encouraging and helping existing MSMEs so much as creating the environment for new MSMEs to emerge. The specific problem is that the informal credit line on which they depend has dried up and we don’t know how to revive that credit line. The government does not have a clear way of doing so.

And, the problem afflicting MSMEs, professor Sen says, is the reason why manufacturing has only grown year-on-year by 4.8% and why joblessness and unemployment are an increasing concern. Most jobs are created by MSMEs or the wider unorganised sector and that seems to have stopped or, at least, is not happening in sufficient measure.

The second problem professor Sen identified is the critical services sector of trade, hotel, transport, communication and broadcasting services, which represent 30.5% of employment but is still 15.5% below pre-pandemic levels. Once again, he said we don’t know what we need to do to boost this sector back to pre-pandemic levels. He pointed out that many MSMEs work in this sector and its future is, therefore, directly linked to MSMEs.

Professor Sen also pointed out that the global situation will not be of much help to India. Interest rates are likely to remain high and exports, which have been a support to the economy until recently, will face problems in markets like Europe and America and, therefore, fail to provide the boost to growth they have previously given. However, he believes oil prices could come down.

He believes India is clearly locked into a K-shaped recovery and the arms of the K are moving further and further apart.

Whilst scoffing at commentators and newspapers that have called for broad-based reforms, without identifying what they would be, professor Sen said that the key reform needed would be credit lines that would service MSMEs and provide funds for new MSMEs to start up.

Comment by Riaz Haq on October 3, 2022 at 5:13pm

Ian Hall
@DrIanHall
"India's economic growth is expected to decline to 5.7 per cent this year from 8.2 per cent in 2021...India's GDP will further decelerate to 4.7 per cent growth in 2023."
https://www.newindianexpress.com/nation/2022/oct/03/indias-gdp-grow...

https://twitter.com/DrIanHall/status/1577052582769758208?s=20&t...

"India experienced an expansion of 8.2 per cent in 2021, the strongest among G20 countries. As supply chain disruptions eased, rising domestic demand turned the current account surplus into a deficit, and growth decelerated," the report said.

It noted that the Production-Linked Incentive Scheme introduced by the government is incentivising corporate investment, but "rising import bills for fossil energy are deepening the trade deficit and eroding the import coverage capacity of foreign exchange reserves."

As economic activity is hampered by higher financing costs and weaker public expenditures, GDP growth is projected to decelerate to 5.7 per cent in 2022," it explained.

"Going forward, the government has announced plans to increase capital expenditure, especially in the rail and road sector, but in a weakening global economy, policymakers will be under pressure to reduce fiscal imbalances, and this may lead to falling expenditures elsewhere. Under these conditions, the economy is expected to decelerate to 4.7 per cent growth in 2023," the report forecasted.

UNCTAD said it expects the South Asia region to expand at a pace of 4.9 per cent in 2022, as inflation increases on the back of high energy prices, exacerbating balance of payment constraints and forcing several governments (Bangladesh, Sri Lanka,) to restrict energy consumption.

Moreover, the limited and delayed progress in relaxing vaccine-related intellectual property (IP) rights continues to leave the region vulnerable to future outbreaks.

For 2023, UNCTAD expects the region's growth rate to decelerate slightly to 4.1 per cent, it noted.

Various developments in the wake of Russia's invasion of Ukraine, including the US ban on oil imports from Russia, and prohibition of shipping insurance for Russian oil exports, have exerted more pressure on oil markets, it said.

However, the release of 180 million barrels from the United States' strategic petroleum reserves as well as the readiness of both China and India to receive Russian oil exports – proved sufficient to ensure that global oil supplies did not tighten further, it said.

The report noted that after a rapid but uneven recovery in 2021, the world economy is in the midst of "cascading and multiplying" crises, with incomes still below 2019 levels in many major economies.

UNCTAD projects that the US economy will grow at 1.9 per cent in 2022, a decline from 5.7 per cent in 2021, and will further slow down to 0.9 per cent in 2023.

Meanwhile, China's economic growth is projected to be 3.9 per cent in 2022, a decline from 8.1 per cent in 2021, and a 5.3 per cent growth next year.

Comment by Riaz Haq on October 3, 2022 at 5:19pm

"India's economic growth is expected to decline to 5.7 per cent this year from 8.2 per cent in 2021...India's GDP will further decelerate to 4.7 per cent growth in 2023."
https://www.newindianexpress.com/nation/2022/oct/03/indias-gdp-grow...

https://twitter.com/DrIanHall/status/1577052582769758208?s=20&t...


The report added that the share of commodities in China's and Egypt's imports is 38 per cent, and more than 50 per cent of India's imports are (primary) commodities including food and fuel.

As a result, higher commodity prices have a strong impact on domestic prices via imports.

Recent estimates covering the past five decades suggest a 50 per cent increase in oil prices (approximately the increase in 2021) is associated with an increase in inflation of between 3.5 and 4.4 percentage points, with a lag of about two years.

These findings suggest that in emerging economies, as in advanced economies, a considerable part of the inflation experienced in 2021-2022 has been caused by higher commodity (oil) prices, it said.

It added that in the wake of the pandemic, higher spending on social protection and lower revenues from taxation led to higher public budget deficits in some emerging economies.

Government deficits in 2020 (2021) ranged from 4.5 per cent (4.2 per cent) of GDP in Mexico to 12.8 per cent (11.3 per cent) of GDP in India.

Comment by Riaz Haq on October 3, 2022 at 5:20pm

“The poverty in the country is standing like a demon in front of us. It is important that we slay this demon. That 20 crore people are still below poverty line is a figure that should make us very sad. As many as 23 crore people have less than Rs 375 income per day. There are four crore unemployed people in the country. The labour force survey says we have an unemployment rate of 7.6 per cent,” said Dattatreya Hosabale. Also Read - 23 Crore Indians Pushed Below Poverty Line Amid COVID-19 Pandemic, Says Study

https://www.india.com/business/23-cr-people-with-income-less-than-r...

He also spoke about the rising levels of economic inequality that the country is witnessing today. Acknowledging that India is among the top six economies of the world, he said top 1 per cent holds 1/5th (20 per cent) of the nation’s income. He added that 50 per cent of the country’s population has only 13 per cent of the country’s income. Hosabale went on to quote United Nations’ observations on the poverty and development in India. Also Read - Today Will be Your Last Working Day With Uber: Ride-hailing Firm Lays Off Nearly 3,700 Employees Via Zoom

“A large part of the country still does not have access to clean water and nutritious food. Civil strife and the poor level of education are also a reason for poverty. That is why a New Education Policy has been ushered in. Even climate change is a reason for poverty. And at places the inefficiency of the government is a reason for poverty.”


In his speech, Hosabale also stressed on the importance of creating an entrepreneurship-friendly environment apart from the need to carry skill-training from the urban to rural India.

“During Covid, we learnt that there is a possibility of generating jobs at the rural level according to local needs and using local talent. That is why the Swavalambi Bharat Abhiyan was launched. We don’t just need all-India level schemes, but also local schemes. It can be done in the field of agriculture, skill development, marketing etc. We can revive cottage industry. Similarly, in the field of medicine, a lot of Ayurvedic medicines can be manufactured at the local level. We need to find people interested in self-employment and entrepreneurship,” Hosabale said.

Comment by Riaz Haq on October 4, 2022 at 9:06pm

Kaushik Basu
@kaushikcbasu
India’s doing very poorly in terms of job creation. I’m not sure why but my conjecture is: An economy’s biggest driver is the investment rate. This has fallen sharply in India from 39.3% in 2009 to 30.7% in 2019 (GOI data). Why are people not investing? That’s the next question.

https://twitter.com/kaushikcbasu/status/1577481003865722881?s=20&am...

Comment by Riaz Haq on October 14, 2022 at 2:00pm

In the 2022 Global Hunger Index, Pakistan ranks 99th out of the 121 countries with sufficient data to calculate 2022 GHI scores. With a score of 26.1, Pakistan has a level of hunger that is serious.

https://www.globalhungerindex.org/pakistan.html

In the 2022 Global Hunger Index, India ranks 107th out of the 121 countries with sufficient data to calculate 2022 GHI scores. With a score of 29.1, India has a level of hunger that is serious.

https://www.globalhungerindex.org/india.html

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

India also ranks below Sri Lanka (64), Nepal (81), Bangladesh (84), and Pakistan (99). Afghanistan (109) is the only country in South Asia that performs worse than India on the index.


https://www.thehindu.com/news/national/india-ranks-107-out-of-121-c...


India ranks 107th among 121 countries on the Global Hunger Index, in which it fares worse than all countries in South Asia barring war-torn Afghanistan.

The Global Hunger Index (GHI) is a tool for comprehensively measuring and tracking hunger at global, regional, and national levels. GHI scores are based on the values of four component indicators — undernourishment, child stunting, child wasting and child mortality. Countries are divided into five categories of hunger on the basis of their score, which are ‘low’, ‘moderate’, ‘serious’, ‘alarming’ and ‘extremely alarming’.



Based on the values of the four indicators, a GHI score is calculated on a 100-point scale reflecting the severity of hunger, where zero is the best score (no hunger) and 100 is the worst.

India’s score of 29.1 places it in the ‘serious’ category. India also ranks below Sri Lanka (64), Nepal (81), Bangladesh (84), and Pakistan (99). Afghanistan (109) is the only country in South Asia that performs worse than India on the index.



Seventeen countries, including China, are collectively ranked between 1 and 17 for having a score of less than five.

India’s child wasting rate (low weight for height), at 19.3%, is worse than the levels recorded in 2014 (15.1%) and even 2000 (17.15), and is the highest for any country in the world and drives up the region’s average owing to India’s large population.

Prevalence of undernourishment, which is a measure of the proportion of the population facing chronic deficiency of dietary energy intake, has also risen in the country from 14.6% in 2018-2020 to 16.3% in 2019-2021. This translates into 224.3 million people in India considered undernourished.

But India has shown improvement in child stunting, which has declined from 38.7% to 35.5% between 2014 and 2022, as well as child mortality which has also dropped from 4.6% to 3.3% in the same comparative period. On the whole, India has shown a slight worsening with its GHI score increasing from 28.2 in 2014 to 29.1 in 2022. Though the GHI is an annual report, the rankings are not comparable across different years. The GHI score for 2022 can only be compared with scores for 2000, 2007 and 2014..



Globally, progress against hunger has largely stagnated in recent years. The 2022 GHI score for the world is considered “moderate”, but at 18.2 in 2022 is only a slight improvement from 19.1 in 2014. This is due to overlapping crises such as conflict, climate change, the economic fallout of the COVID-19 pandemic as well as the Ukraine war, which has increased global food, fuel and fertiliser prices and is expected to "worsen hunger in 2023 and beyond."



The prevalence of undernourishment, one of the four indicators, shows that the share of people who lack regular access to sufficient calories is increasing and that 828 million people were undernourished globally in 2021.

There are 44 countries that currently have “serious” or “alarming” hunger levels and “without a major shift, neither the world as a whole nor approximately 46 countries are projected to achieve even low hunger as measured by the GHI by 2030,” notes the report.

Comment by Riaz Haq on October 27, 2022 at 5:41pm

The International Monetary Fund (IMF) on Thursday said the strong recovery in South Asia is expected to take a breather with India's economy expanding at 6.8% in FY23, revised down by 1.4 percentage points since the April 2022 World Economic Outlook, due to a weaker-than-expected recovery in the second quarter and subdued external demand.

https://economictimes.indiatimes.com/news/economy/indicators/imf-on...

A further slowdown of India's growth to 6.1% is expected in FY24 as external demand and a tightening in monetary and financial conditions weigh
on growth, the IMF said in its Regional Economic Outlook.

Noting that there have been "significant" portfolio outflows from Asia so far this year, it said at a regional level the scale of the outflows from Asian emerging markets is comparable to previous episodes such as the 2013 taper tantrum and the 2020 onset of the Covid-19 pandemic.

While strong outflow pressures have been focused on a handful of economies such as India, it said that recent data point to outflows having stabilised and partially reversed. "In the countries facing the most volatility in net portfolio flows, these seem predominantly driven by equity instead of debt flows (India, Thailand). These flows and the differentiation of equity prices have responded to changes in growth expectations," the IMF said.

As per the report, several Asian emerging market and developing economies have seen a decumulation of their international reserves-between 3-10% of their holdings in the first half of 2022 in India, Indonesia, the Philippines and Thailand-especially during periods of intense external financial shocks.

Most economies in Asia and Pacific, including Australia and India, are consolidating fiscal policy alongside monetary policy following substantial support during the pandemic, according to the outlook.

On the Russia-Ukraine war, it said the rise in crude oil, natural gas, coal and agricultural commodity prices in the first half of 2022 has been a negative terms-of-trade shock for most of the region and placed strain on the external accounts of large net importers in India.

The IMF also said India would need to spend 6.2% of gross domestic product each year to achieve the Sustainable Development Goals in 2030, and these resource requirements are compounded by less ess favourable debt dynamics.

Crypto currency
On crypto currency, the IMF said policy response should include investments to modernize digital payment systems-including cross-border integration-and the eventual issuance of central bank digital currencies.

India introduced a 30% tax on income derived from crypto trading and is currently developing a regulatory framework like many countries in the region.

"An important aspect of the policy response should include investments to modernize digital payment systems-including cross-border integration-and the eventual issuance of central bank digital currencies, which could offer consumers many of the benefits of crypto without the risks," it said.

The pandemic has accelerated digitalization around the world, including in many Asian emerging markets and developing economies, and e-commerce revenues have increased, with particularly rapid expansion in some emerging markets such as India and Indonesia.

Comment by Riaz Haq on October 31, 2022 at 7:35am

#Indian #rupee marks biggest monthly losing streak since 1985, its slide for this year is nearly 11% against #USD. #India's currency has declined in each of the 10 months this year to notch its biggest losing streak in almost 4 decades. https://finance.yahoo.com/news/indian-rupee-marks-biggest-monthly-1... via @YahooFinance

The Indian rupee has declined in each of the ten months this year to notch its biggest losing streak in almost four decades as the U.S. Federal Reserve's hawkish stance on monetary policy catapulted the dollar to two-decade highs.

The dollar index is up 16% this year, having scaled 114.8-levels last month to trade near its 2002 peak. Its ascent has pressured currencies globally, especially ones in emerging Asian markets.

The Indian rupee fell 1.8% against the dollar in October, taking its slide for the year to nearly 11%.

Surging oil prices due to the Russia-Ukraine conflict and weakness in the Chinese yuan have only piled on more pressure on the rupee and helped send it to a record low of 83.29 per dollar earlier this month.

The rupee's losses have been deeper in the past two months, with market participants reckoning that the Reserve Bank of India let the currency slide after having helped hold it at the 79-80 levels for a long time.

Almost all traders and economists expect there will be no let-up in the pressure on the rupee for the rest of the year as the Fed stays on its aggressive rate-hike path after making fighting inflation its priority.

"This week, the Fed's upcoming meeting would be crucial for the rupee outlook. It could come under pressure in case Fed indicates aggressive tightening path in the future," HDFC Bank economists wrote in a note.

"Broadly, 81.80 to 82.00 seems a strong support zone for the USD/INR pair. As long as it trades above this convincingly, one can expect a U-turn towards 82.80 to 83.00 levels," said Amit Pabari, managing director at consultancy firm CR Forex Advisors.

Comment by Riaz Haq on November 14, 2022 at 10:53am

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...

The cry of a baby born in India one day next year will herald a watershed moment for the country, when the scales tip and India overtakes China as the world’s most populous nation.

Yet the story of India’s population boom is really two stories. In the north, led by just two states, the population is still rising. In the richer south, numbers are stabilising and in some areas declining. The deepening divisions between these regions mean the government must eventually grapple with a unique problem: the consequences of a baby boom and an ageing population, all inside one nation.

India is currently home to more than 1.39 billion people – four times that of the US and more than 20 times the UK – while 1.41bn live in China. But with 86,000 babies born in India every day, and 49,400 in China, India is on course to take the lead in 2023 and hit 1.65 billion people by 2060.

On 15 November the world’s population will reach a total of 8 billion people. Between now and 2050, over half of the projected increase in the global population will happen in just eight countries: the Democratic Republic of the Congo, Egypt, Ethiopia, Nigeria, Pakistan, the Philippines, the United Republic of Tanzania – and India.

The growth will place huge pressure on India’s resources, economic stability and society, and the repercussions will reach far beyond its borders. As a country on the forefront of the climate crisis, already grappling with extreme weather events 80% of the year, diminishing resources such as water could become decisive factors in what India’s future population looks like.

One country, two stories
Fears of “population explosion” in India – where development caves in beneath the weight of an uncontrollably expanding population and the country’s resources are overrun, leaving millions to starve – have abounded for over a century.

Post independence, India’s population grew at a significant pace; between 1947 and 1997, it went from 350 million to 1 billion. But since the 1980s, various initiatives worked to convince families, particularly those from poorer and marginalised backgrounds who tend to have the most children, of the benefits of family planning. As a result, India’s fertility rate began to fall faster than any of the doomsday “explosion” scenarios had predicted.

A small family is now the norm in India, and with the annual population growth rate less than 1%, fears of population-driven collapse are no longer seen as realistic. In the 1950s, a woman in India would give birth to an average of over six children; today the national average is just over two and still continuing to fall.

Nonetheless, the curbs on population growth have not been uniform across India, and India’s entrenched north-south divide has played out significantly in demographics, with ongoing social and political consequences.

For the next decade, one-third of India’s population increase will come from just two northern states, Bihar and Uttar Pradesh. Bihar, the only state in India where women still typically have more than three children, is not expected to hit population stability – 2.1 children per woman – until 2039. Kerala, India’s most educated, progressive state, hit that figure in 1998.

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