Joblessness: Modi's Achilles' heel of 2019 elections

• In 2013 election campaigning, Modi PM candidate of the BJP, at a rally in Agra thundered "If the BJP comes to power, it will provide one crore jobs every year" which is now haunting him.
• In May 2017, a Labour Bureau quarterly report noted that a mere 230,000 jobs were created in eight key sectors from Apr-Dec 2016, a far cry from Modi's 2013 promise. This, when over a million aspirants enter the Indian job market every month. 
• The GDP growth slipped to 5.7% in the Apr-Jun quarter, the lowest in three years, with manufacturing growing at a five-year low of 1.2%, from 10.7% a year ago.
• CMIE estimates that about 1.5 million jobs were lost during January-April 2017, the first quarter after the Nov 2016 demonetisation exercise. Worse, India is set to see a further 30-40% reduction of jobs in manufacturing compared with last year.
• With a general election in less than two years, the dearth of jobs could prove the Achilles' heel of the Modi government, rein in the high prices of essential goods and rectify anomalies in the GST. 
• RBI, in its monetary policy statement on Oct 4, reiterated the need for recapitalising banks.
• Currently 30,000 new youngsters are joining the job market every day, yet the government is creating only 500 jobs a day - Rahul Gandhi said, even as he admitted that the UPA government too faced the same challenge.
• India could have been sailing smoothly at 10% plus growth, but for the spate of disruptions, including demonetisation, GST, RERA and the new bankruptcy norms. Individually they may carry a broad range of benefits, together they have inflicted collateral damage much more than was anticipated.
• The real estate sector, which creates 1.5 million jobs, has been the worst hit. Home sales fell 26% in the Delhi-NCR in the first half of 2017 as demand nosedived post-demonetisation. Unsold inventory in the Delhi-NCR stood at 180,000 units and it will take developers four-and-a-half years to sell it.
• As many as 67 textile units are reported to have shut down across the country, rendering 17,600 people jobless.
• In Nov 2016 Larsen & Toubro sacked 14,000 employees, 11.2% of its workforce, as business slowed down and digitisation left many employees redundant. IT companies, including Tech Mahindra, Wipro and Cognizant, laid off tens of thousands of staff as global business grew tougher. HDFC Bank laid off 11,000 workers over three quarters citing digitisation. Yes Bank eliminated more than 10% of its workforce citing increased redundancy, poor performance and the impact of digitisation. Hiring intentions in corporates are 20 percentage points lower year-over-year. In the informal sector lakhs of workers go jobless as construction projects dry up given the unprecedented investment slowdown.
• Manufacturing was stuttering despite the government's high-decibel 'Make in India' campaign. Acquiring land for setting up manufacturing units continued to be tough. Private investment growth has been falling since 2012. The country still ranked a low 130th in the World Bank's ease of doing business rankings.
• India's job challenge is staggering, to put it mildly. The country needs to create 16 million jobs a year for the next 15 years to take advantage of its demographic dividend.
• In key areas like textiles, India has ceded its leadership to countries such as Bangladesh and Vietnam.
• Adding to the manufacturing woes is the implementation of new digital technologies like the internet of things, cloud computing and artificial intelligence in the manufacturing process, making traditional jobs obsolete. These technologies with a squeeze in services, are affecting IT jobs too.
• Sectors like construction, real estate, power, energy, infrastructure are destroying jobs. There has been a 30% decline in job creation since 2007-08 in these sectors.
• Short-term job creation looks near-impossible since we have been focusing on the wrong kind of manufacturing for 60 years, and are now paying the price.
• Bank credit has fallen by 50 per cent. New projects are not coming up as private investment is drying up. Focus on construction will also boost the steel and cement industry. Construction and infrastructure can boost economic activity and jobs substantially, but they have been marred by time and cost overruns. As critical as supporting giant projects is extending help to small entrepreneurs. 
• Recapitalisation of banks can also help them lend to businesses, given that bad loans to the extent of Rs 7.7 lakh crore have weakened their capacity to lend.
• IT is losing its sheen as a significant job provider, with markets such as the US becoming more protectionist. Technological advances are also rendering the work force obsolete at a faster clip. 
• This could be the right time to boost consumption through lowering interest rates or giving government subsidies to certain businesses.
• Reviving the informal sector remains the biggest challenge. It's impossible to gauge the extent of joblessness given paucity of data. There is simmering discontent waiting to explode that we must prevent. We must act now.
• The government has also increased budgetary allocations for anti-poverty programmes and rural employment generation schemes. The highest ever allocation under the MGNREGA was made during 2017-18. About 51.2 million households were provided employment during 2016-17.
• The larger debate continues to be over what India should focus on: manufacturing or services. Growth in the recent period has been driven by services, which in itself was owing to substantial inflows of foreign finance. India needs rapid manufacturing growth fueled by both export growth and expansion of the domestic market. 
• Today's joblessness is similar to that of late 1960's which prompted PM Indira Gandhi to amend Apprenticeship Act in 1973 to include training of graduate and diploma engineers as "Graduate" & "Technician" Apprentices and to mitigate their problem.
• Jobs will remain a thorn in this government's side which appears unsolvable and will have telling effect in 2019 elections. 

Good or bad aside, during UPA regime GDP growth benefited all, despite corruption and scams except 2008 global recession and 2013 economic dip. Modi riding the wave of anti incumbency and joblessness became PM in 2014 and instantly forgot his promises and commitments. He focused on foreign jaunts and blaming predecessor and did nothing for next two years. The advantage of low oil prices since 2013 was squandered away. Without even discussing with economic experts, he ventured on quack advised demonetisation and mangled GST roll out without adequate preparation and keeping away keys sectors out of GST and economy plunged into distress and millions jobs lost. Banks recapitalisation was given a miss and today banks do just retail banking only. In 2017 almost all economic parameters are worse than in 2013 and nothing much is likely to happen in next two years prior to 2019 elections. Modi & BJP are certain to pay price for their arrogance and incompetency. 

RBI Annual Report 2016-17 confirms demonetisation disaster

Andhra Jyothy dt Aug 31, 2016 - Headlines

• On November 8,  2016, the Modi government kicked off a massive demonetisation exercise in a move that was aimed at curbing black money, fake currency and corruption. Since then it has been a widely debated topic, with analysts and economists wondering whether the benefits trumped the costs.
• The Reserve Bank, which has so far shied away from disclosing the actual number of junked currency deposited after November 8 last year, said in its Annual Report for 2016-17, that Rs.15.28 lakh crore out of the Rs.15.44 lakh crore of the junked currency had come back into the banking system, leaving only Rs.16,050 crore out.  This means that 98.96% of Rs 1,000 and Rs 500 notes that were banned as a result of demonetisation were returned to the central bank by the end of June 2017.
• In the immediate weeks after demonetisation, one school of thought believed that if a sizeable amount of demonetisation notes didn’t return to the RBI (presumably because the owners of the notes feared getting caught for tax evasion, this could translate into a “windfall gain” for the Modi government. The government itself believed that roughly Rs 2 -3 lakh crore would not return, according to statements the-then attorney general made before the Supreme Court in November 2016.
• Former Finance Minister P Chidambaram said, "RBI gained Rs 16,000 crore, but lost Rs.21,000 crore in printing new notes! The economists deserve Nobel Prize." He also tweeted "Rs.16,000 crore out of demonetised notes of Rs.15,44,000 crores did not come back to RBI. That is 1 per cent. Shame on RBI which 'recommended' demonetisation."
• A collateral damage as a result of rise in printing and other cost was dividend RBI pays to the government. RBI said its income for 2016-17 decreased by 23.56 per cent while expenditure jumped 107.84 per cent. The RBI paid Rs.30,659 crore dividend to the government for the year ended June 30, 2017 against the expected Rs.74,901 crore. In the previous year RBI paid dividend of Rs.65,876 crore dividend to the government.

• Demonetization has destroyed Agriculture, Informal economy, Small Industries, and unquantifiable effects on each and everyone. No one is benefited. CMIE estimated costs incurred by Nation during demonetisation period of 50 days is over Rs.128,000 crores that achieved nothing. Yet our PM Modi lives in a fools paradise publicizing what ever small good is happening around as an achievement of DeMon while maintaining stoic silence on bad effects that surface.
• Series of  farm loan waivers by states to mitigate farmer woes is actually pulling down our otherwise vibrant economy. Another effect is the NPAs have virtually destroyed public sector banks. Today they are doing nothing but counter banking.

Demonitization 2016: Arrogance, Audacious & Atrocious dt Nov 30,2016

Demonetisation process adopted by Modi giving undue importance to secrecy rather than meticulous planning for its seamless implementation, betrayed constitution, violated laws of the land, undermined RBI & other institutions, cabinet made irrelevant and parliament denied its right to discuss and vote it. With in few days of DeMon, it was clear that it is headed for its monumental failure and Modi had opportunity to 'restore status-quo ante' and deliberately ignoring it indicates his arrogance and contempt for people of India and their sufferings. He was so much blinded that he has not even considered mitigation aspects except making an emotional speech asking people 50 days but problems persisted for over 8 months. Charismatic he is, he was able to campaign and win UP elections that DeMon is hurting and making rich sleepless and is the tool in his hands fighting corruption which is a total lie. His apathy towards not appointing Lok Pal & Lok Ayuktas for the past 4 years is the true indicator of his corruption fighting attitude. It is a matter of shame that, the one man Modi who unleashed mindless & unwarranted economic disaster 'demonetization' on otherwise vibrant Indian economy resulting in the nation losing lakhs of crores of rupees, impacting poor & peasants is walking amidst us proudly unpunished and pretending as a great achiever.