Economy

Mohammad Anas Wahaj | 13 aug 2017

According to the Economic Survey 2016-17 (Vol. II), employment in India poses a great challenge in terms of its structure, with it being dominated by informal, unorganised and seasonal workers. It highlighted the deceleration in hiring being faced by the IT-BPM (Business Process Management) sector. It said, 'The IT-BPM industry is also feeling the pinch of the global slowdown and global political uncertainties as clients go slow on their decision-making and investment processes.' The survey cited McKinsey report, saying that nearly half of the workforce in the IT services firms will be "irrelevant" over the next 3-4 years and the bigger challenge ahead for the industry will be to retrain 50-60% of the workforce with a significant shift in technologies. The survey also noted that the growth in digital tech like cloud-based services is happening at a much faster pace and the companies have to learn new technologies and reskill. It quotes 2016 World Bank report that said, automation threatens 69% of the jobs in India, while it threatens 77% in China. The survey added that skilled labour force is essential to meet diversified demands of a growing economy, to tap the benefit of demographic dividend. According to India Skill Report 2016, the present demographic advantage of India is predicted to last only till 2040. Read on...

Indian Express: Adoption of new technologies, reskilling key for job growth
Author: NA

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Mohammad Anas Wahaj | 08 aug 2017

According to Prof. Pritam Singh, Oxford Brookes University (UK), BRICS nations will lead the global economy and play vital role in spatial shift of the global capitalist economy. While speaking at expert session on 'Global Economic and Environment Crisis Faced by BRICS Economies' at Chandigarh University, Prof. Singh said, '...By 2050, if the Indian economy continues to maintain the current growth pace (GDP growth 7%), it will be the dominant global supplier of services while China would dominate the global manufacturing industry...' Read on...

The Tribune: BRICS nations to lead economy - Oxford professor
Author: NA

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Mohammad Anas Wahaj | 04 may 2017

India's demographic dividend can only achieve full potential if its young population continues to update their skills, the private sector continues to upgrade its processes, technologies and management practices to remain profitable and growth oriented, and government continues to improve infrastructure, ease regulations to do business, and attract internal and foreign funds as investments in various industries and businesses. Approximately half of India's 1.2 billion people are under the age of 26. By 2020, around 64% of India's population will be in the working age group of 15-64 years, and it is forecast to be the youngest country in the world, with a median age of 29. Moreover, India is a US$ 2 trillion economy, growing at approximately 7% year on year. It has a strong domestic focus with approximately 75% of the GDP generated on domestic consumption. India's demographic dividend will work in favour of the Indian economy when its young, educated and healthy population, is trained, skilled and gainfully employed, giving rise to an upwardly mobile consumer class. Read on...

ilmeps/read: India's Demographic Dividend - Update Skills, Upgrade Industry, Uplift Infrastructure - For Development and Growth
Author: Mohammad Anas Wahaj

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Mohammad Anas Wahaj | 10 mar 2017

According to the Organisation of Economic Cooperation and Development (OECD) report, 'India Economic Survey 2017', although India's economy continues to grow (7% in current fiscal year), but the rate of employment has declined and it lags most other countries in creating quality jobs. Over 30% of youth aged 15-29 in India are Not in Employment, Education or Training (NEETs). This is more than double the OECD average and almost three times that of China. Isabelle Joumard, senior economist at OECD, says, 'NEETs include all youth left outside paid employment and formal education and training systems. They are NEET because there are not enough quality jobs being created in the system and because they have little incentives or face too high constraints to be in the education and training systems.' OECD points out complexity and strictness of labor laws and restrictive employment protection legislation compared with other emerging economies, as some of the several factors responsible for India's poor performance. Ms. Joumard adds, 'Thus, corporates in India tend to rely more on temporary contract labour, stay small or substitute labour for capital to avoid strict labour laws. Apart from that, corporate income tax has created a giant bias against labour-intensive activities.' Read on...

Livemint: More than 30% of India's youth not in employment, shows OECD report
Author: Harsha Jethmalani

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Mohammad Anas Wahaj | 31 jan 2017

Economists from Deloitte, Richa Gupta and Rishi Shah, explain the emerging risks that India's economy faces - (1) Protectionist Trade Polices: G20s in 2016 took restrictive trade measures. Such policies create uncertainties as they are meant to provide immediate stimulus and therefore tend to be more variable and less consistent. In addition India, large importer of oil, also get affected by OPEC cuts and hardening prices. (2) Global Growth Faltering: Global growth is expected to pick up in current fiscal on a premise of US stability and higher growth, stable China and rebound in some emerging economies. China's policy of expected Yuan devaluation would affect India as it would mean depreciation of the domestic currency to maintain competitiveness. (3) Brexit and its Implications: Uncertainties and possibility of 'Hard Brexit' will impact India due to linkages in financial markets as adverse events would cause some outflow of funds. (4) Effect of Demonetisation: Expected 7.1% growth for FY17 would further get affected due to demonitisation that resulted in consumer's inability and hesitancy to spend. This will lead to short-term vicious cycle of lower expected consumption feeding into lower investment expectation. (5) Disruption on GST: Disruptions would emerge as the numerous small businesses learn to adapt to not only a new taxation system but also to an incremental digital framework for compliance with the new regime. Read on...

The Economic Times: Five risks that may hamper India's economic growth
Authors: Richa Gupta, Rishi Shah

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Mohammad Anas Wahaj | 04 jan 2017

Marc Faber, editor and publisher of 'The Gloom, Boom & Doom Report', while speaking on Indian economy, says, 'It does not matter whether India grows at 5% per annum or 7% per annum but if you look at the next 10 years or so, you could easily expect an economy that on an average grows anywhere between 4% and 7% per annum. That is a very high growth rate compared to practically no growth expected from the US or in Europe.' On sectors that would be attractive for investments, he comments, 'In 2017, some commodity related stocks including oil and gas will be reasonably attractive. What I have noticed to be the most attractive sectors are plantation companies, agricultural companies and fertiliser companies. They have significant potential on the upside because agricultural commodity prices have been very weak since 2011. These agricultural commodity prices will pace them out and start to increase. The agricultural sector, fertilisers are relatively attractive.' Read on...

The Economic Times: Expect India to grow between 4%-7% in next 10 years: Marc Faber
Author: Tanvir Gill

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Mohammad Anas Wahaj | 22 nov 2016

Opinions on India's demonetization policy vary from masterstroke to hasty and unplanned, and a lot of uncertainty in between. Some experts consider it as a 'short-term pain to long-term gain' scenario. Report from CRISIL, a credit rating agency, analyzes the impact of demonetization policy on the overall economy, both now and beyond - (1) Government revenues to increase, as people deposit more cash in banks and government gets opportunity to tax. (2) Fiscal deficit to narrow in medium to long-term. (3) Public investments to rise as a result of higher tax collection. More spending in infrastructure is expected. (4) Economy to grow in medium to long-term, while there is expected fall in GDP in short-term. In future, government spending will generate employment and income. (5) Inflation to fall near-term but in long-term minimal impact. (6) Increase in liquidity in banking system, an opportunity for banks to profit through lending. (7) Keeps the interest rates lower in long-term due to government's lower fiscal deficit. (8) Demand for gold will fall in short-term due to cash crunch. But in long-term gold hoarding will increase leading more gold imports and higher import bill which means a larger Current Account Deficit (CAD). (9) Digital payments will increase, enhancing the trend toward cashless economy. (10) Sectors affected include real estate, jewellery and cement, as most transactions are in cash. Luxury auto sector will also get impacted. Organized retail sector will benefit due to digital transations. Read on...

Khaleej Times: This is how demonetization affects the economy
Author: NA

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Mohammad Anas Wahaj | 29 aug 2016

Machine tools industry is critical for the success of 'Make in India' and 'Skill India' initiatives. V. Anbu, Director General of the Indian Machine Tool Manufacturers' Association (IMTMA), explains, 'Machine tools are considered a strategic industry segment. It is part and parcel of manufacturing, particularly discreet manufacturing segments such as automobiles, defence, railways, plastic machinery, medical electronics and white goods.' GLOBAL SCENARIO: 'Japan and Germany are strong in production and degree of sophistication/technology level. Global production of machine tools is worth around US$ 84 billion. In volume, China leads the pack; in technological maturity, Germany and Japan are at the same level. China's machine tool production is about US$ 24 billion.' INDIA'S MACHINE TOOL INDUSTRY: 'The Indian machine tool industry will touch US$ 1 billion in 2016. We are looking at getting into high-end manufacturing in sectors like railways, defence and aerospace. Automotive will become bigger, while medical electronics is also expected to grow...India is the 10th biggest market for machine tools. Of the market size of Rs 10,300 crore, domestic production is worth Rs 4,500 crore, which is about 42%. India has limited capability when it comes to high-accuracy machine tools.' INDIAN GOVERNMENT'S ROLE: 'We need much faster, single-window clearances. We are also looking forward to results on GST, policy on land acquisition, and ease of doing business...The government must create a financial mechanism to allow Indian companies to acquire firms abroad.' ISSUES WITH INDIA'S MACHINE TOOL INDUSTRY: 'Technology-gap is one major issue. To have an efficient model or mechanism for companies, they need to improve their own technology. Supply-chain is another issue. Payments and taxation and procurement are the other issues.' SKILL GAPS AND ROLE OF IMTMA: 'We are looking at bringing depth to manufacturing which will help the end-user. IMTMA conducts about 150 training programmes all year. Over 35 companies have lent their support to this initiative...Broad domains that are covered include productivity, design, maintenance, and automation. Most programmes are on metal cutting. We have deliberately added a few topics on metal forming too.' Read on...

The Hindu: 'Machine tools industry key to manufacturing, success of Make in India; to be worth $1b in 2016'
Author: Thomas P. Abraham

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Mohammad Anas Wahaj | 23 aug 2016

According to the latest OPPI-KPMG's 'Report on Healthcare Access Initiatives', India spends less on healthcare than most other middle income countries. It's total healthcare expenditure of about 4.1% of GDP is among the lowest in the world. The report highlights the following main gaps in India's healthcare - POOR HEALTHCARE INDICES: Life expectancy (68 years in 2015) one of the lowest among Brazil, Russia, India and China (BRIC); Infant Mortality Rate (IMR) of 38/1,000 live births and Maternal Mortality Rate (MMR) of 174/100,000 live births in 2015, highest among peer group. GROWING NON-COMMUNICABLE DISEASES (NCD) BURDEN: NCDs account for nearly 60% of deaths annually; Indian economy set to lose US$ 4.58 trillion by 2030 due to NCDs. INADEQUATE HEALTHCARE INFRASTRUCTURE: Number of hospital beds of 0.9 per 1,000 population is lowest among BRIC; 75% of dispensaries and 60% of hospitals are in the urban areas. NEED FOR MORE TRAINED HUMAN RESOURCES: Lowest number of physicians per 10,000 population among BRIC; 80% of doctors are in the urban areas serving only 28% of the population. POOR AVAILABILITY: In rural India, only 37% of people have access to In-Patient Department (IPD) facilities within a 5km distance, and only 68% have access to an Out-Patient Department (OPD). BURDENED CARE: Nearly 63 million people are in debt due to health expenditure; Nearly 1/3 of population is driven below the poverty line due to health expenses. INADEQUATE GOVERNMENT SUPPORT: The government funds only 1/3 of health expenditure; Gross Domestic Product (GDP) spend on healthcare (4.1%) lowest among BRIC. POOR INSURANCE COVERAGE: Nearly 75% of population uncovered. Out-of-pocket (OOP) contributes close to 86% of private and 60% of overall healthcare expenditure. Report suggests a patient-centric approach to tackle India's healthcare challenges and points out that awareness and education can strengthen the four pillars (4As) of healthcare - Availability; Affordability; Accessibility; Acceptability. Utkarsh Palnitkar, Partner at KPMG, says, '...Only a long-term, proactive strategy with education and awareness at its centre, involving all stakeholders, i.e., healthcare providers, insurance companies and healthcare and pharmaceutical companies, can achieve the desired vision of a healthy country.' Shailesh Ayyangar, President of Organisation of Pharmaceutical Producers of India (OPPI), says, 'Universal Healthcare is a social priority...India's healthcare strategy requires a holistic approach and a critical evaluation of our existing systems. We need sustainable policy solutions to address healthcare financing, infrastructure and human resource challenges.' Read on...

The Economic Times: India's total healthcare expenditure at about 4.1% of GDP, among the lowest in the world - OPPI-KPMG report
Author: NA

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Mohammad Anas Wahaj | 14 aug 2016

According to a research paper by McKinsey Global Institute titled, 'India's Ascent: Five Opportunities for Growth and Transformation' [Authors: Noshir Kaka; Anu Madgavkar; Rajat Gupta; Shirish Sankhe; Jonathan Woetzel; Jacques Bughin; Ashwin Hasyagar; Shishir Gupta], there are five areas that could have a substantial impact on India's economy - (1) From poverty to empowerment: Acceptable living standards for all (2) Sustainable urbanization: Building India's growth engines (3) Manufacturing for India, in India (4) Riding the digital wave: Harnessing technology for India's growth (5) Unlocking the potential of India's women. But the paper suggests that this will require leaders at all levels - local, state and national - to adopt new approaches to governance and provision of services. Moreover, the government agencies must ramp up their capabilities to meet the enormous challenge. It's been 25 years since the economic liberalization process got started and India has been able to improve living standards of its citizens, but there is lot more to be done. The report explains, 'It (India) offers attractive long-term potential, powered largely by a consuming class that we expect will more than triple, to 89 million households, by 2025. The challenge for Indian policy makers is to manage growth in such a way that it creates the basis for sustainable economic performance. India's transformation into a global economic force has yet to fully benefit all Indians.' It further says, 'To achieve its full potential, the country will need to address deprivation using a new set of parameters that address quality of life and access to basic services. This is certainly within India's capacity, but it will require policy makers to promote an agenda that emphasizes job creation, growth-oriented investment, farm-sector productivity, and innovative social programmes so that the benefits actually reach the people who need them.' Read on...

Livemint: Five areas that could have an impact on India's economy
Author: Pretika Khanna

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