Do it yourself

The rate of Consumer Price Inflation (CPI) in India dropped to 3.34% in the month of March; below the lower bound (4%) of the regulator’s (RBI) target band of 4% to 6%. It is definitely a significant development insofar as the monetary policy consideration, macroeconomic stability, and consumer confidence are concerned. If this trend sustains, it would pave the path for further easing in the monetary policy; improve the fiscal outlook; improve the outlook for debt and currency markets; aid corporate profitability and encourage fresh investment flows. In this sense, it is certainly good news for the investors in Indian financial markets in the near-term. However, in my view, a low inflation rate does not help a large section of the Indian population much. A low inflation rate only implies a slower rise in the price level as compared to the prices in the base period. It offers no relief to the people who are already finding the existing prices of the essential goods and services unaf...

The National Sample Survey Organization (NSSO) released results of the   Comprehensive Annual Modular Survey 2022-2023   a few weeks ago. The survey made many interesting findings. Some of the key findings could be listed as follows: Primary school enrollments:  Among persons of age group 6 to 10 years, about 90.5% in rural areas and 89.2% in urban areas are currently enrolled in primary education. 25% of rural children and 20% of urban children who never enrolled in school, did it because they were not interested in studies. Another major reason for non-enrollment was “parents not interested in sending them to school”. Among persons aged 15-24 years, around 97.8% of males and 95.9% of females are able to read and write short simple statements in their everyday life with understanding and are also able to perform simple arithmetic calculations. Secondary education:  In urban areas, only 56.6% persons of age 25 years and above have some secondary education. Whereas, i...

The latest Periodic Labor Force Survey (PLFS), released on 16 August 2024 by the National Statistical office (NSO), provides some useful insights into the current employment conditions in the country. The following are some of the key observations from the Survey report. The Good ·          The employment conditions have improved during 1QFY25. The WPR-U improved for all ages and both genders. The Youth WPR-U improved from 39.3% (1QFY24) to 40.8% (1QFY25). For all workers, WPR-U improved 38.4% to 39.3% during this period. ·          The LFPR-U male workers improved from 57.2% in (1QFY24) to 58.9% in (1QFY25) for youth (15-29yrs) and from 73.5% to 74.7% for all workers above 15yrs of age. ·          Self-employed female workers increased in urban areas from 39.2% to 40% while the number of self-employed male workers in urban areas increased from 39.5% to 40%. ...

Capital expenditure (capex) has been one of the primary focus areas of the government in the past one decade. As per the Economic Survey 2024, “The focus of capex has been broad-based. Spending in sectors such as road transport and highways, railways, defense services, and telecommunications delivers higher and longer impetuses to growth by addressing logistical bottlenecks and expanding productive capacities. Government capex has also begun to crowd in private investment, as discussed earlier in this chapter. Additionally, the Government continues to disburse grants-in-aid for the creation of capital assets to the states, thereby incentivizing them to increase their productive spending.” Accordingly, “capex” has emerged as an important driver of growth, as indicated in its rising share of nominal GDP. As per the provisional actual (PA) figures for the FY24, capex for FY24 stood at ₹ 9.5 lakh crore, an increa...

Continuing from last week The development of Artificial Intelligence (AI) is still in the early stages. How many more job losses shall we witness in the coming years due to automation? Last week, one of the popular viral videos on Indian social media was about the views of Mr. Rahul Gandhi, Lok Sabha MP, and Mr. K. Annamalai, Tamil Nadu State President of BJP, on the challenges of artificial intelligence (AI). In the video, Mr. Annamalai is seen eloquently explaining the challenges of AI to young students, while Mr. Gandhi is seen doing some whataboutery to hide his lack of proper understanding. Discussing the matter with many people who chose to forward the video to me, I found that the key reason for their forwarding this video is to show Mr. Gandhi in a poor light and not bother about the challenges of AI. They deliberately chose to ignore that both Mr. Gandhi Mr. Annamalai may not be in a position to make policies, at least for the next five years; whereas Chief Ministers of...

  Continuing from yesterday. If the job crisis is so severe, why is the incumbent government so popular, especially among the youth? The incumbent prime minister , reportedly , enjoys the highest rating amongst the popular leaders of the world. In particular, he is very popular amongst the youth and women in India. India faces one of the worst youth unemployment rates globally. Indian homemakers are facing serious challenges in managing their household budgets due to inflation. According to the World Bank, the youth unemployment rate in India could be comparable to war-torn economies like Syria, Yemen, Lebanon etc. The unemployment rate and household inflation have worsened or failed to improve in the past 10 years. The question thus arises, why is the incumbent government still popular amongst youth and women? I have discussed this aspect with numerous common people, like myself, nationwide over the ...

Continuing from Tuesday ( Nine years of continuity and low growth ), I must say one key area of sub-optimal by the incumbent NDA-2 government is management of human resources. Despite massive public campaigns, the investment in education, skill developments, and employment generation opportunities have been found lacking. Meager budget allocations have been made for capacity building in the areas of education and skill development. In fact, the capital expenditure budget was sharply cut for school & higher education and skill development in the union budget for FY24. A meager sum of Rs99.2cr was allocated towards capital expenditure on skill development. The successive governments in India have been consistently ignoring the fact that the global community has always valued resource rich nations and expected them to behave in a responsible manner to preserve the global order. ·          The capital rich western world is expected to help the...

The latest Periodic Labor Force Survey (PLFS ), released three weeks ago by the National Statistical office (NSO), provides some very useful insights into the current employment conditions in the country. The following are some of the key observations from the Survey report. Key definitions The Worker Population Ratio (WPR-U): Percentage of potential workers, i.e., the population aged between 15-60yr of age, in urban areas. The Worker Population Ratio (WPR-R): Percentage of potential workers, i.e., the population aged between 15-60yr of age, in rural areas. Youth WPR-U: Worker Population Ratio for population aged between 15-29yr in urban areas. Youth WPR-R: Worker Population Ratio for population aged between 15-29yr in rural areas. The Labor Force Participation Rate (LFPR-U) is defined as the percentage of population offering or willing to work in urban areas, whether currently employed or unemployed. The Labor Force Participation Rate (LFPR-R) is defined as the perce...

  Recently, the growth in per capita GDP of India has been in the news. The government statistics claim that per capita income of India has almost doubled in the past nine years. This claim has generated intense discussion over the economic performance of the incumbent government; especially relative to the previous UPA government (2004-2014). Without getting into a political argument and keeping the statistics aside for a while; I would like the popular debate to take the following into consideration: ·           The last census of India was done in 2011. Therefore all “per capita” data points are using an estimated number of the population. There is a possibility that the actual number could be different from the estimates. ·           In the past twelve years there have been significant changes in the socio-economic and demographic structure of the country. The youth population has increase...

 The latest data published by the National Statistical Office (NSO confirms that India’s economic activity in FY22 has reached the pre pandemic levels of FY20. The Real Gross Domestic Product (GDP at FY12 prices), private consumption, government consumption, and gross investments in FY22 were at a marginally higher level than FY20. The exports and Imports in FY22 were more than 10% higher than FY20. The Real GDP in FY22 grew 8.7% vs a contraction of 6.6% in FY21, and a growth of 4% in FY20. The growth in Real GDP in 4QFY22 was much slower at 4.1%. Media and government officials have reported the growth numbers in a context of their own liking. Some have taken pride in India achieving the fastest growth rate amongst the larger global economies. Some have expressed relief that the Indian economy has recovered fully from the pandemic impact and attained the pre pandemic level of economic activity. Some celebrated this as a “V” shape recovery of the economy. Some expressed concern ...