New Delhi – On paper, the Indian economy has been a banner year. Exports are at record highs.. Profits Publicly traded companies Have doubled. A vibrant middle class, built up in the last few decades, is now shelling out movie tickets, cars, real estate and vacations so much that economists call them “costs of revenge” after epidemics.
Still, as India is likely to have. The fastest growth In any major economy this year, the pink headline figures do not reflect the reality for millions of Indians. Progress still does not translate into enough jobs for the wave of educated youth who enter the labor force each year. A large number of Indians live in the informal sector, and have suffered from high inflation in recent months, especially in food prices.
The disconnection is the result of India’s unequal development, reinforced by the relentless exploitation of the country’s upper class but whose benefits often do not extend beyond the urban middle class. The epidemic has widened the divide, leaving millions of Indians in extreme poverty and increasing the number of Indian billionaires. Oxfam.
The concentration of wealth is partly the result of Prime Minister Narendra Modi’s ambitions for development at all costs, which he promised. When he was re-elected in 2019. To double the size of India’s economy by 2024, take the country to a club of $ 5 trillion or more with the United States, China and Japan.
The government reported late last month that the economy had grown 8.7 percent last year to 3. 3.3 trillion. But with declining domestic investment, and a slowdown in government jobs, India has turned to subsidized fuel, food and housing for the poorest people to tackle mass unemployment. Free grain now reaches two-thirds of the country’s more than 1.3 billion population.
These handouts have, to some extent, pushed inequality in India to its lowest level in decades. Nevertheless, critics of the Indian government say that subsidies cannot be used forever for paperwork on insufficient job creation. This is especially true because tens of millions of Indians – new college graduates, farmers who want to leave the fields and working women – are expected to flood the non-farm workforce in the coming years.
Mahesh Vyas, chief executive of the Center for Monitoring Indian Economy, a data research firm, said:
As a child, Ms. Sinha used to pretend to be a teacher in front of her village classroom with fake glasses and wooden sticks to entertain her fellow students.
His wish came true years later when he got a job teaching mathematics in a private school. But Corona virus Fulfilled its dreams, as the Indian economy shrank 7.3% in the fiscal year 2020-21. Within months of the start, he and several other teachers were fired for the same reason. Many students had dropped out..
Ms. Sinha, 30, is once again in the market for a job. In November, she joined the thousands of applicants who were ready for the most prestigious job in the government. He has also traveled across Haryana in search of jobs, but turned them down for a meager salary – less than $ 400 a month.
“Sometimes, at night, I’m really scared: what if I can’t get anything?” she said. “All my friends are suffering because of unemployment.”
But for Indian politicians, the high unemployment rate is “no show stopper,” said Mr Vyas, an economist, adding that he was more concerned about inflation, which affects all voters. ۔
The Reserve Bank of India and the Ministry of Finance have tried to tackle inflation, which has led many countries to cut interest rates on wheat and sugar due to epidemic-related supply chain problems and the war in Ukraine. Increasing and reducing taxes on fuel.
The bank raised its borrowing rate to 4.9% on Wednesday, after raising it for the first time in two years in May. As he did so, he predicted that inflation would reach 6.7% in the next three quarters.
Reserve Bank officials have also used fiscal and monetary tactics to continue supporting growth, which fell to 4.1 percent in the first quarter of 2022. Domestic consumption, a major driver of India’s economy, has fallen in the last few months.
“We are committed to controlling inflation,” said Shakti Kant Das, governor of the bank. “At the same time, we need to keep in mind the need for development. It is not possible for the operation to be successful and for the patient to die.
Priyanka Kishore, an analyst at Oxford Economics, said that while the Bank of England and the Federal Reserve in the United States have said that their countries need to adapt to low growth rates due to high commodity prices, the Reserve Bank of India Not in this camp. He said that development is very important for India. “It’s a political agenda.”
The ban on food exports is a sharp turnout for Mr Modi. In response to Russia’s blockade of Ukrainian ports, which has led to a global shortage of grain, he said in April. That Indian farmers can help feed the world.. Instead, global wheat shortages pushed up prices, prompting the Indian government to ban exports to keep domestic prices low.
Such temporary interventions are far easier than addressing the underlying problem of mass unemployment.
“You have wheat in your warehouses and you can send it to households and get instant relief,” Mr Vyas said, referring to storage facilities. Feels weird. “
Analysts say these policies could include more efforts to rebuild India’s backward manufacturing sector. He also said that India should relax regulations that often make it difficult to do business, as well as reduce tariffs to make it easier for manufacturers to store components that are not manufactured in India.
Exports have been a source of strength for the Indian economy, and the rupee has depreciated by about 4% against the US dollar since the beginning of the year, which will generally boost exports.
But inflation in the United States and the war in Europe have begun to affect sales of Indian-made garments, said Raja M. Shanmogam, president of a trade association at Trooper, a textile hub in Tamil Nadu.
“All input costs are rising. Before that the industry used to operate on wafer thin margins, but now we are working at a loss,” he said. It’s welcome, but it’s not. “
Economists say the struggle of working-class Indians and millions of unemployed could ultimately hamper growth.
Ziaullah, who drives an auto rickshaw in Tomakuro, an industrial town in the southern Indian state of Karnataka, said his income was still only a quarter of what it was before the epidemic.
The ڈالر 20 a day he earned was enough to cover the household expenses of a family of five and school fees for his three children.
“Customers prefer to walk,” he said. “Nowadays no one has the money to buy an auto.”
Mr Allah, 55, said food prices had risen so much that he had to cut back on food and expel his two children from school.
“Only one, the eldest daughter, now goes to school,” Mr Allah said. “Look around for work in the rest of the area.”
Hari Kumar assisted in reporting.