Tag Archives: recession

Modi mocks ‘pessimists’, but RBI says a whole lot of Indians are pretty pessimistic about the economy

Last week, Prime Minister Modi gave an hour long speech denouncing ‘pessimists’ who refused to see the bright side of demonetisation and other transformations that his government’s able management had visited upon the economy.

We at Kafila, did a quick fact-check offering many reasons for pessimism, but as they say in Delhi – humari kya aukaat hai?

Now, a set of surveys by the Reserve Bank of India have concluded that 65% of the 5100 metropolitan households polled feel the economic situation has either worsened or stayed the same. It’s a small sample, but the results are revealing.  To quote :

Households’ current perceptions on the general economic situation remained in the pessimistic zone for four successive quarters, with the outlook worsening — RBI

For those you wondering – “four successive quarters” is a full year.

I would urge most readers to read the report in full, but here are some key takeaways:

Continue reading Modi mocks ‘pessimists’, but RBI says a whole lot of Indians are pretty pessimistic about the economy

Modi says the economy isn’t so bad; He’s right – it’s worse

by Samarth Bansal and Aman Sethi

On October 4, Prime Minister Narendra Modi offered a robust defence of his government’s management of the economy, shortly after the Reserve Bank of India lowered its Gross Value Added (GVA) growth estimates for the current fiscal year from 7.3% to 6.7%.

Since then, the ruling party has been pains to push a positive narrative on the economy,  extent of emailing clips of the speech to journalists who write about the economy.

So, what is the current state of the economy? Here’s a reality check.

How many jobs has the economy created?

Modi said: “Upto March 2014, the subscriber base of the Employees Provident Fund Organization (EPFO) stood at 3.26 crore. Over the last three years, the numbers increased to 4.8 crore. Some people forget that this number can’t increased without a corresponding increase in employment.”

Reality Check: EPFO numbers have increased, but this doesn’t necessarily mean that total employment has increased. In July this year, this jump in EPFO subscribers was attributed to a government amnesty scheme which allowed firms to come clean on their actual staff strength without being penalized. In a detailed note, Mahesh Vyas, Managing Director and CEO of the Centre for Monitoring Indian Economy (CMIE), explained why using EPFO data as a proxy for job creation is “fraught with danger.”

Referring to the jump in the subscriber base, Vyas wrote: “This is not new employment. It is merely enrollment of employed persons into EPFO.”

Continue reading Modi says the economy isn’t so bad; He’s right – it’s worse

Job Losses: A Reality Check

The right to work involves just and fair condition of employment, and also, protection against unemployment. It also entails access to employment without discrimination and a supportive structure that aids access, including appropriate and free choice, skill building and vocational education. However, the economic survey 2008-09 and the union budget 2009-10 demonstrate how the burning issue of job losses – retrenchment, lay off, redundancy – in times of global financial crisis and economic slowdown, are perhaps the least understood of the economic, social and political concerns. There are clear evidences that the job losses have worsened in many sectors in the recent past, posing a threat to the overall inclusive growth prospects, and are a challenge to continue successful poverty reduction efforts. Job insecurity in the country is on the rise and an expected decline in growth and investment is likely to exacerbate this problem. It is critically important to recognize the issue, and build a political will to tame anti-labour atmosphere and practices. Supportive structures should come with innovative policies and programmes. Continue reading Job Losses: A Reality Check

Tens of Thousands Protest G20 Summit

‘They hoped for ten thousand, but in the end more than three times that number turned out on London’s streets today for the biggest mass demonstration since the beginning of the economic crisis’, writes a report in the Guardian.
London march, courtesy Associated Press
London march, courtesy Associated Press

According to another report: Tens of thousands of people marched across central London Saturday to demand jobs, economic justice and environmental accountability, kicking off six days of protest and action planned in the run-up to the G20 summit next week.

More than 150 groups threw their backing behind the “Put People First” march. Police said around 35,000 attended the demonstration, but there were large gaps in the line of protesters snaking its way across the city toward Speaker’s Corner in Hyde Park.

Read the full report here.

What is significant about the protests this time round, is that ordinary people are not ready any more to be the sacrifiical lambs while the big corporations are bailed out. ‘Capitalists, you are the crisis’ and ‘We won’t pay for their crisis’ are in fact some of the important and key slogans of the current round of protests.

The Rise of the Underground – A New Discovery?

Believe it or not, experts at the World Bank and the IMF are disovering the virtues of something we at Kafila have been, off and on, debating: the so-called ‘underground economy’, the ‘informal sector’ or what has also been called the sphere of ‘noncorporate capital’.

“Economists have long thought the underground economy — the vast, unregulated market encompassing everything from street vendors to unlicensed cab drivers — was bad news for the world economy. Now it’s taking on a new role as one of the last safe havens in a darkening financial climate, forcing analysts to rethink their views”, states a recent Wall Street Journal report from Ahmedabad. Continue reading The Rise of the Underground – A New Discovery?