Covid-19 impact on GDP to be felt for years in advanced economies: Fitch

The effect of coronavirus will proceed for quite a long time as GDP levels in the biggest propelled economies stay around 3 to 4 percent underneath their pre-infection pattern way by the center of this decade, Fitch Ratings has said in another report.
"There will be enduring harm to gracefully side beneficial potential from the coronavirus stun as long haul joblessness rises, working hours fall, and speculation and capital gathering moderate," said Maxime Darmet, Director in Fitch's Economics group.
Immense vulnerabilities encompass the financial viewpoint in result of the huge stun in H1 2020. The way that the coronavirus flare-up will take is obscure.
"Rehashed rushes of new contaminations and recharged across the country lockdowns could see a drowsy recuperation while clinical forward leaps could bring about a fast standardization of financial movement," said Fitch in the report.
A sensible base-case working presumption with the end goal of financial investigation is that the wellbeing emergency slowly facilitates after some time, with recharged across the country lockdowns maintained a strategic distance from and infection regulation looked for through more focused on reactions.
Fitch said US profitable potential development has been changed to 1.4 percent from 1.9 percent, the UK to 0.9 percent from 1.6 percent and the eurozone (weighted normal of Germany, France, Italy and Spain) to 0.7 percent from 1.2 percent.
These corrections mostly mirror the desire for an ascent in long haul joblessness in outcome of the stun.

"The occupations stun is probably going to see numerous specialists - especially in the most unfavorably influenced and work escalated travel, the travel industry and recreation parts - battle to discover re-business rapidly, bringing about separation from the work advertise," said Fitch.

Are Indians going to the movies to escape slowdown? PVR's CEO thinks so

International News

Cinemas are seeing brisk business even as India’s economy slows to a six-year low and unemployment swells, according to PVR Ltd., the nation’s largest operator of multi-screen theatres.
Ever since the box-office hit Kabir Singh released in June, even films with small budgets or less-recognizable actors are drawing the crowds, Kamal Gianchandani, chief executive officer at PVR Pictures, said in an interview this month. Results for July-September will “definitely surprise a lot of people,” he said, declining to elaborate.
“I think the slowdown is helping the cinema business,” Gianchandani said. “There is negativity around and people want to escape it.”
If Gianchandani’s prediction is correct, PVR would be defying a slump that has dented demand for almost everything from 7-cent cookies to cars. He joins the likes of Bollywood megastar Shahrukh Khan, who has in the past compared movies to lipstick, saying that both are immune to economic turmoil.
Seventeen of 26 analysts surveyed by Bloomberg have buy ratings on PVR stock, with eight holds and one sell. Similar numbers can be seen for smaller Indian rival Inox Leisure Ltd. PVR will probably outperform Inox on spending per head, analysts led by Karan Taurani at Elara Securities Pvt. said October 4.
Sensing competition from the likes of Netflix Inc. and Reliance Industries Ltd.’s Jio service -- which allow people to watch movies from the comfort of their home -- PVR has partnered with Canadian motion technology player D-Box Technologies Inc. to design seats that sway and jerk in sync with the action on screen, offering a more immersive experience.

 “Our strategy is to ensure we stay relevant in this age where every other day a new streaming service is being launched,” Gianchandani said. “Fortunately, customers are receptive.”....Read More

Massive job losses reveal India is failing to reap its demographic dividend

Current Affairs

The recent shedding of over 350,000 jobs in its automobile sector--and thousands elsewhere--is an indicator of the economic and social hurdles that jeopardise India’s demographic dividend, the growth opportunity afforded by the world’s second largest working-age population of 688 million people.
With unemployment at a 45-year high, poor health--42 infants per 1,000 still die before turning one--and low levels of education--an average person has attended school for 6.3 years--India’s demographic dividend is at risk, according to an IndiaSpend analysis of data from the United Nations Population Fund (UNFPA) and the Indian government, and research from the Reserve Bank of India (RBI).
India needs state specific policies--good health and education systems, with more women entering the workforce in young states, and policies to attract migrants and elderly care systems in ageing states. India will also need to reduce caste and urban-rural inequality, especially in access to reproductive care, health, education and jobs.
As its working population is larger than the population of dependents, “India, theoretically, could have a golden period in the decade of 2020 to 2040 (and continuing later, though with decreasing results)...but it could happen only if the right policies and programmes are put in place right now,” according to a 2018 paper by the UNFPA.
However, our research shows, states vary widely in the education, skill development and healthcare facilities they are able to provide, leading to varying employability outcomes.

 As a result, states need policies specific to their unique challenges, which are determined, in part, by the stage of demographic transition they are in...Read More

Govt's silence dangerous: Priyanka on reports of threat to 1 mn auto jobs

Current Affairs

Congress general secretary Priyanka Gandhi Vadra on Friday cited a media report to claim that jobs of one million people in the automobile sector were in danger and asserted that the BJP government's silence on job losses was "most dangerous".
Her remarks came after industry body ACMA on Wednesday said around 1 million jobs could be on the line if the prolonged slowdown in the automobile industry continues.
Priyanka Gandhi tagged the media report on Twitter which said auto parts industry is fearing that 1 million jobs could be at stake due to the slowdown.
"Jobs of 10 lakh people working in the auto sector are in danger. People working in this sector will have to search for new job avenues," she said.
"The silence of the BJP government on job losses, weakening trade and policies damaging the economy is most dangerous," Priyanka Gandhi claimed.
The Automotive Component Manufacturers Association of India (ACMA), which represents the auto component industry that alone employs around 5 million people, has sought a uniform GST of 18 per cent for the entire automobile sector in order to revive the vertical which has now witnessed 10 months of continuous decline in sales.
ACMA president Ram Venkataraman had said considering the fact that the auto component industry grows on the back of the vehicle industry, a current 15-20 per cent cut in vehicle production has led to a crisis-like situation.

 "If the trend continues, the layoffs are inevitable and an an estimated 1 million people could be laid off," he said....Read More

Narendra Modi unveils national pension scheme for unorganised sector

Current Affairs

Prime Minister Narendra Modi launched the Pradhan Mantri Shramyogi Mandhan Pension Yojana, a pension scheme for workers of the unorganised sector in Gujarat.

Modi targeted Congress President Rahul Gandhi over poverty, saying only those oblivious to sleeping hungry at night can think that it is a state of mind.

For some, poverty is just an opportunity to click photos, Modi said, sharpening his attack on the Congress chief. "This scheme is aimed at uplift of the section of society which has been ignored and left at the mercy of God.

They (Congress) gave slogans of garibi hatao (end poverty).

Under this scheme, unorganised workers will get a pension of Rs 3000. I am told that over 14 lakh workers have been enrolled under the scheme, Modi said.

Some projected themselves as messiah of workers. But during their tenure they did not launch such a scheme, he said.

"They ruled the country for 55 years and collected votes in the name of poor," he said. "This scheme has been launched by our government as a tribute to the unorganised sector, who can earn some money till their body is fit but are worried about what will happen to them when they get old, Modi said.


 "They thought that poverty is a mental state. See how is this neta who says that there is nothing like poverty but a mental state," Modi said, targeting the Congress president...Read more

Impossible job: India's pollsters face the uphill battle to call election

Economy & Policy:

Thousands of candidates, hundreds of parties, endless combinations of possible coalitions – spare a thought for India’s pollsters, tasked with making sense of the country’s fiendishly complicated politics ahead of a general election due by May.

The ruling Bharatiya Janata Party led by Prime Minister Narendra Modi won a surprise majority in 2014. Until last year, many predicted a similar result. But amid rising anger over unemployment and a fall in rural incomes, the BJP lost key state elections in December, making this contest more closely fought than first expected.

That means surveys conducted on behalf of newspapers and TV channels will be closely scrutinized. Some of India’s top pollsters however, told Reuters current surveys could be wide of the mark until the parties finalize alliances, which could be as late as April – and even then, there are challenges.
“In India there are certain relationships between caste, religion and allegiance,” said VK Bajaj, chief executive of Today’s Chanakya, the only polling firm to predict the BJP would win an outright majority in 2014. “We have to do checks and counter-checks when collecting our samples.”

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 Opinion polls grew in popularity in India in the 1990s, after economic liberalization saw a boom in privately-owned newspapers and TV channels, all demanding their own surveys.

Challenge is to create more organised jobs: Tata Sons chief Chandrasekaran

Companies News:

India faces the challenge of creating formal jobs and migrating people from the informal to the formal sector, said N Chandrasekaran, chairman, Tata Sons.

He pointed out that creating jobs in the formal sector is a bigger problem than lack of jobs.
The problem, he added, arises from the lack of access to services, including healthcare, education and financial services. Therefore, if the accessibility part is addressed effectively by going digital, it will lead to more jobs.

Chairman of the $103 billion conglomerate, the largest employer in the private sector, he was addressing delegates from technology start-ups and the information technology sector at Mumbai’s TiECON, an annual flagship event.

With the theme “unexplored,” the two-day conference is expected to be attended by over 2,000 delegates, including over 500 investors as well as more than 750 high potential start-ups. “It’s not so much about lack of jobs. We have jobs. The challenge is of creating formal jobs and migrating people from informal to formal, getting them jobs that offers decent pay. That’s the fundamental problem and requires lot more thinking,” said Chandrasekaran.


 His comments come amid recent reports of the unemployment rate in India rising to a 45-year high of 6.1 per cent in 2017-18...Read More

Interim Budget falls short on a key promise made by Modi; creating jobs

Interim Budget 2019:

India’s budget provided plenty of giveaways to farmers and middle-class voters, but was short on detail on one of Prime Minister Narendra Modi’s key promises: creating jobs.

The issue has become a politically sensitive one ahead of elections due by May, with the government accused of deliberately withholding the most recent labor report because of the possible bad news it presents. A local newspaper published leaked details of the report a day before the budget, showing the unemployment rate reached a four-decade high of 6.1 per cent in the year to June 2018.

Modi swept to power in May 2014 with the biggest electoral mandate in three decades after promising to create 10 million jobs each year. Finance Minister Piyush Goyal said in his budget speech last week that 20 million “employment opportunities” were added in two years. Yet no official labor survey has been published since 2016, when the unemployment rate was reported at 5 per cent.


 Much of the budget focused on consumer stimulus -- such as the $10.6 billion-plan to pay cash to farmers -- with few specific measures to help boost businesses to create opportunities for about 12 million young people who enter the job market each year...Read More

2019 polls: Why govt should aim to create jobs, not offer basic income

General Election 2019:

During election season, which we’re entering in India, everyone likes the idea of giving voters more money. Congress Party President Rahul Gandhi, the de facto opposition leader, says his party will guarantee a minimum income for the country’s poor if victorious. Reports suggest that Prime Minister Narendra Modi’s government may compete by announcing some form of direct transfer of cash to farmers in the interim budget to be revealed on Friday, which could cost the exchequer nearly $10 billion annually.

While governments everywhere should take care of their most vulnerable citizens, the idea of guaranteeing a basic income is wrong for India right now. Fundamentally, it would only work if two conditions were met. First, large sections of the population would have to be mired in absolute poverty. And second, all other subsidies and welfare programs for them would have to be abolished in order to free up the necessary funds without completely blowing open India’s fiscal deficit, which is already strained.

ALSO READ: Interim Budget 2019: Before polls, govt wants expansionary economic policy


 Neither condition prevails in India. While there’s no recent government estimate of the number of people living below the poverty line, credible research by the Brookings Institution suggests that extreme poverty in India, defined as those living on less than $2 a day, now afflicts only five percent of the population. Granted, that’s still more than 70 million people. But, for the vast majority of Indians, the challenge is no longer subsistence, it’s aspiration. No basic income guarantee will be able to address rising aspirations unless it’s a very large sum of money. At India’s level of national income, providing anything more than a subsistence income would simply be unaffordable...Read More

Interim Budget 2019 must focus on skilled labour to tackle unemployment

Intrim Budget 2019:

Budgetary allocation to the ministry of skill development and entrepreneurship (MSDE) has witnessed a 237% increase over the last four years, from Rs 1,007 crore (actual expenditure) in 2015-16 to Rs 3,400 crore (budget estimate) in 2018-19, according to ministry data.

The 2018-19 allocation, however, represents a “drastic cut” by the ministry of finance against the Rs 7,696.54 crore requested by the MSDE, due to underutilisation of funds allocated to the MSDE in previous years, revealed a parliamentary committee report in March 2018. The committee warned that the budget cut would “adversely affect various schemes” implemented by the ministry tasked with skilling India’s youth.

In November 2018, the government’s aim to skill 10 million youth under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY, or Prime Minister’s Skill Development programme) by 2020 was found to be 64% short of meeting the target. Just over 3.6 million people had been enrolled in PMKVY by November 30, 2018, government data showed. Among these, 3.39 million had received training and 2.6 million had received certification after training--66% and 74% short of the target, respectively.

There is a direct link between India’s underskilled workforce and high unemployment rates. Unemployment has been a key challenge for the National Democratic Alliance (NDA) government. The unemployment rate for people aged 15 years and above in India was 3.4% in 2013-14, which saw a further increase to 3.7% in 2015-16, according to a government reply to the Lok Sabha on July 23, 2018, which did not provide data on numbers of unemployed.The unemployment rate rose to a four year high (3.9%) in 2016-17, Business Standard reported on January 11, 2019, citing the labour bureau’s sixth annual employment-unemployment survey...Read More