Wednesday, February 9, 2022
Monday, February 7, 2022
India - Kanpur's Tanneries - 'Only 25% of the Industry Remains - Piyush Rai
Kanpur's Tanneries: 'Only 25% of the Industry Remains; Govt Indifferent'
Hit by demonetisation and pandemic, Kanpur's tannery owners say that only 25% of the industry survives now.
Published:
India: Is disruption ahead for the gig economy? | Pramit Bhattacharya
Is disruption ahead for the gig economy?
- Platforms got enormous goodwill by serving their urban clientele. But as wages decline and discontent rises, they’re at risk of being seen as ruthless hiring agents
Published on Feb 07, 2022 07:33 PM IST
When they first entered our lives, gig economy platforms seemed to herald an urban revolution. A few taps on the phone was all it took to get food from restaurants that were miles away (through Swiggy or Zomato) or to book an instant ride (through Ola or Uber). These apps seemed to be able to deliver on-demand services even while liberating drivers and delivery persons from the drudgery of a fixed routine. Platforms were solving our unmet needs while creating flexible well paying gigs for a growing army of workers.
[ . . . ] https://www.hindustantimes.com/opinion/is-disruption-ahead-for-the-gig-economy-101644242393827.html
Friday, February 4, 2022
India: A betrayal of the social sector when it needs help | Dipa Sinha (The Hindu, February 02, 2022)
A betrayal of the social sector when it needs help
The government seems to have prioritised meeting its fiscal deficit targets rather than using this opportunity to signal a path of employment-centred and inclusive growth
India continues to rank poorly in various global indices that reflect the quality of life, human capital or human development in the country, such as the Human Development Index (rank 131 out of 189 countries) and the Global Hunger Index (rank 101 out of 116 countries). It is well documented that the pandemic over the last two years has had a severe impact on the health, education and food security of the poor and informal sector workers. A number of recent reports, including the Oxfam’s ‘Inequality Kills’ report and the ICE360 survey, well establish that the recovery in economic growth in India is K-shaped, meaning that the incomes of the poorer sections of the society are decreasing, while those of the richer sections are increasing. As many have argued, while this trend has been exacerbated by the pandemic, the country has been experiencing increasing inequality over the last couple of decades. Further, the period after 2016 has also seen stagnant real wages and increasing unemployment.
[ . . . ]
Thursday, February 3, 2022
India: Silence of the Looms - Fact-Finding Report on Purvanchal (Eastern Uttar Pradesh) by Citizens for Justice and Peace (CJP)
on-ground
fact finding mission by Citizens for Justice and Peace (CJP) spread
over 2020 and 2021, takes a deep and nuanced look at the plight of the
traditional weaving industry in Purvanchal (Eastern Uttar Pradesh),
especially in wake of the Covid-19 induced Lockdown.
Our 17-member survey team led by Dr. Muniza Khan, Varanasi-based social
science researcher, conducted detailed interviews of 204 respondents, 37
video interviews and 19 audio-interviews in neighbourhoods with a high
concentration of people engaged in weaving the famous Banarasi fabric
and allied activities
Wednesday, February 2, 2022
India: Budget 2022-23 - We deserve Better by Gautam Modi NTUI (Feb 2, 2022)
New Trade Union Initiative (NTUI)
Budget 2022-23: We deserve Better
For eight years now the Bharatiya Janata Party (BJP) government has promised “development for all” (sab ka saath, sab ka vikas) which would culminate in a grand three-year long celebration of the 75th year of our independence. The government canceled this plan for celebration while presenting the Budget of 2022-23 (BS), and passed on the burden of development on to the people by calling upon all to ‘strive hard’ (prayas) for the next 25 years so we can celebrate an Amrit Kaal (Golden Period) in the 100th year of our independence. It is not surprising from a government that has been instrumental in leading India to the bottom of all global indices on development. India ranks 120 out 167 countries according to the Sustainable Development Report (2021) ranking; we rank 131 (out of 189 countries) according to the Human Development Report (2020) which ranks countries based on parameters of life expectancy at birth, standard of living and education; and rank 140 (out of 156 countries) in the Global Gender Gap Report (2021).
The Budget – what is in it for us?
The Budget is just a play of words in the expectation that we will, intoxicated by the BJP’s religious nationalism, forget what was promised in the past, what is our present and remain captivated by the ‘possibilities’ for the future.
With the world and our country still struggling with the pandemic, and as of 30 Jan 2022, only 51% of our population fully vaccinated (WHO), for the BJP the pandemic has become a thing of the past. The BJP now wants us to believe that we are now a thriving economy and hence it is time to cut expenditure on people. The first cut has landed on expenditure on social protection. In 2022-23, the budget plans to reduce expenditure on food security and the public distribution system by 28%, on Mahatma Gandhi National Rural Guarantee Act (MNREGA) by 26%. Expenditure on anganwadis and school mid-day meal will remain unchanged without accounting for inflation, expansion or improvement of the programmes. The expenditure on rural development and agriculture too is virtually frozen. However, there is a marginal increases in the education budgets to make sure that the government is able to roll out their saffronised New Education Policy (NEP).
Most strikingly, still in the midst of the third wave of the pandemic, the BJP government has drastically cut their allocation on healthcare from Rs. 75,000 crores to Rs. 41,000 crores (by 45%). The coronavirus vaccine budget had been slashed from Rs.39,000 crores to Rs. 5,000 crores. With almost close to half the population still waiting to be fully vaccinated, especially our children, this budget cut is clearly indicative that the government is not even willing to secure us and our children from this deadly disease?
How will the Government raise money?
Quoting the Mahabharata, the Budget states that it is the task of government to work for the welfare of people by collecting taxes. Using this mythological rhetoric, the government is celebrating its goods and service tax (GST) which taxes everyone, the working class and the poor more harshly than the rich. It is the tax on all basic necessities. It is a tax on medicines. It is a tax on even a cup of tea. Further, the budget puts an additional duty on unblended petrol, which may trigger price rise of commodities across the board for the working class. But when it comes to taxing incomes and companies, the Finance Minister Nirmala Sitharaman said, after presenting the BS, that “Prime Minister Modi’s instructions were very clear – ‘no additional taxes’ ” for obviously the rich.
The BJP government knows that it cannot raise enough taxes by just taxing the poor, so it plans to borrow in order to spend. By 2023, government borrowings will be double its level from 2019. 1 out of every 3 rupees that the government will borrow will come from small savings. Hence the poor and ordinary working people will not just bear the fiscal discipline of lower expenditure on social protection, they will also pay more indirect taxes, and it is on their back that the BJP government will indebt the country to become ‘self-reliant’ (atmanirbhar).
Of course the other source of meeting government expenditure will be from the proceeds of privatisation and ‘monetisation’ of public assets. The BJP has out done every previous government in running down the private sector. As we learnt from Air India, the BJP government will turn over the public sector for a pittance. The reduced expectations from privatisation proceeds in the BS, when compared to last year, is evidence of it.
All for the King’s horses and All for the King’s men
Private investment in India has been declining since 2016-17 when the economy experienced a sharp downturn in demand, in other words, consumption. This crisis of jobs and earnings was triggered by the note ban of 8 November 2016. Since then, the economy has been in a perpetual decline with low demand contributing to low investment which in turn results in job loss and declining wages. This cycle was accentuated with the introduction of the GST without adequate planning and preparation. In the misguided ideological understanding that low taxes on the private sector leads to higher investment, the BJP government reduced taxes on companies by 8-10% in September 2019. This significant revenue loss further limited the government’s capacity to spend and pushing it to borrow more, whilst also reducing government expenditure in key areas that boost demand. Thus, even before the pandemic struck, our country had already entered an economic crisis of low demand, low investment, low employment and low wages. The pandemic has made the situation entirely unsustainable.
The Budget aims to spend more money than ever on capital expenditure. It will be increased by nearly 35% in 2022-23 compared to the last year and will be largely for infrastructure development. This the government states is necessary to encourage the private sector to invest. This is an admission of the BJP government that the capitalist class, that it has served on all counts for nearly eight years, is on strike. While the BJP government wants to ban workers from striking for their rights, it has no power to persuade the rich and the large companies to withdraw their strike against investment in industry, manufacturing, basic services and infrastructure. Hence the government lures them to invest through public-private partnership in order for the rich to grow richer at the cost of the poor.
Both the Budget Statement and the Economic Survey 2021-22 show a complete absence of a policy perspective from the government. The government claims that the economy will grow between 8-9% in the year ahead but there is no pathway to take the economy there. With no plan to direct government expenditure towards job creation that will in turn increase demand and lift the entire economy, the BJP government believes that just throwing numbers and words will take the country forward. The BJP government talks of India being the fastest growing economy in the world but does not state that high growth with high inflation equals not so high growth in real terms.
The BJP government also claims that we have the highest ever reserves of foreign exchange. As price of petroleum rises, which we largely import, along with other imports rising as well, the reserves, however high, will not last long. The government’s rhetoric of self reliance and mindless nationalist rhetoric against China, has come with a destruction of medium and small industries, especially in manufacturing, wiping out jobs, livelihoods and indigenous manufacturing capabilities and capacities. In the last three years our imports from China have increased three-fold. This is how far we have moved from being atmanirbhar.
Today there can only be three immediate concerns – containing the impact of newer variations or further fallouts of coronavirus, creating jobs and maintaining inflation at an acceptable level. On the virus, the BS only talks of past achievement and speaks of no provisions for the future. There is no clear plan or framework in the BS on dealing with the jobs crisis when it is widely accepted that the country needs 20 crore jobs to go forward. On controlling price inflation, the BS is completely silent.
And finally, at the base of this all, is a much deeper crisis of the egregious inequality that has emerged in our country. Today the 100 richest Indians control as much wealth as nearly 55 crore people or 45 percent of the population. It is suggested that 84 percent of families in the country have faced a decline in their incomes since the start of the pandemic. The present structure of our taxes will only make this worse further leading to continuing slack demand, job loss, declining wages and rising prices. The BJP government is contributing to rising misery in our country.
We deserve better. The working class must strengthen its resistance to the BJP government.
Gautam Mody
General Secretary, NTUI
Tuesday, February 1, 2022
India's 2022 Budget: What about the bottom half of Indian households? | Amit Basole
What about the bottom half of Indian households?
Amit Basole writes: Little has been done to address inequality and insecurity of the poorest in the budget
Labourers wait for work at Labour Chowk in Gurgaon. (Express Photo/Manoj Kumar)
This year’s Union Budget, presented to Parliament by Finance Minister Nirmala Sitharaman, is the second budget during the pandemic period. As with last year, the twin challenges this time were offering vital income support to poor and vulnerable households which have suffered greatly during the pandemic, while stimulating broad-based recovery in growth. The two goals are intimately connected. However, even more than last year, this budget does not make direct provisions for the former.
The Economic Survey provides the context for the decisions made in the budget. The survey emphasises rapid economic growth of 9.2 per cent in 2021-22. But given the low base effect of the pandemic year, it is more instructive to compare real GDP in 2019-20 (the pre-pandemic year) to that in 2021-22. This comparison reveals modest growth of 1.26 per cent. This is not nothing. It indicates that the losses of the pandemic were made up for completely and then some, during the past year, at least in aggregate terms. But when we look at the composition of this recovery, some worrying signs emerge. Consumption, which is the largest part of the GDP, is still short of its pre-pandemic value in real terms by 3 per cent. Government spending is up 10 per cent while private investment is up by 2.5 per cent, indicating that public investment has driven the recovery.
As is well known, the GDP numbers do not capture the informal sector adequately. Here we must rely on household surveys. As per nationally representative household data from the CMIE, employment has been back to its pre-Covid levels for several months now, but incomes remain stagnant at around 80 per cent of their pre-pandemic levels. That is, the average household has lost almost a year and a half to depressed incomes. Recall that, as per the Periodic Labour Force Survey data, the average Indian worker earned only around Rs 11,000 a month prior to the pandemic, and a monthly income of Rs 50,000 per month placed a worker in the top 5 per cent of the income distribution. In this context, a persistent income gap over more than a year, signifies almost certain hardship. Indeed, multiple smaller surveys show a large build-up of informal debt and households resorting to pawning jewellery to make ends meet. Food insecurity also persists.
Given this macro and welfare context, the budget ought to have substantially increased total fiscal outlay, in part towards capital expenditure and growth, and in part to an expanded safety net. In fact, the total outlay for next year is 39.4 lakh crore, up from 37.7 lakh crore, the revised estimate for 2021-22. In real terms, assuming inflation of 5 per cent next year, this means that the total spending is approximately the same for the coming year as it was in this year.
We can look at two key big ticket social expenditure items, MGNREGA and PDS, to get a sense of the thinking behind the budget. During the first pandemic year, the total allocation for MGNREGA was Rs 1,11,170 crore. Field reports and surveys indicated that this was inadequate given the large increase in demand for work under the programme from returning migrants as well as distressed rural workers. In the second pandemic year, the budgeted amount was reduced to the pre-pandemic level of Rs 73,000 crore. However, distress and the resulting sustained high demand for work under the programme forced the government to increase the outlay, which finally rests at Rs 98,000 crore for the current financial year. Even this is not adequate, given the prior pending wage payments and the current demand. Hence the budget estimate for the coming year, once again at Rs 73,000 crore, is nowhere close to sufficient. It is likely that more funds will be released over the course of the year as needed.
The amount budgeted for foodgrains delivered via PDS has also been reduced from Rs 2,10,929 as per the revised estimate of 2021-22 to Rs 1,45,920 in the coming year. This too reflects the thinking that the worst effects of the pandemic, reflected in increased hunger, are safely behind us. But this is not the case. And even if households are now earning enough to meet their basic food needs at the pre-pandemic level, provisioning of expanded rations will enable them to devote some resources to other ends, such as paying down debt or increasing consumption on other items. This will improve their living standards as well as contribute to increased aggregate demand.
Before concluding, a small point worth noting, given the continuing debate on the state of economic statistics in the country, is that last year’s budget allocated Rs 28 crore for the National Programme for Improving Quality of Statistics in India. But the revised estimates show that nothing was spent on this programme and its allocation for the coming year has been reduced to a token Rs 0.01 crore.
In sum, the Union Budget scores reasonably well on the continued emphasis on alleviating supply-side problems via infrastructure investment and improving ease of doing business. But it scores poorly on spending that will compensate the bottom half of Indian households for the enormous sacrifices made during the past two years. To the extent that this means continued low levels of aggregate demand, it also risks a return to slow economic growth once the base effect of 2020-21 has disappeared.
This column first appeared in the print edition on February 2, 2022 under the title ‘Letting down the bottom half’. The writer heads the Centre for Sustainable Employment at Azim Premji University
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