10 mln Indians to lose jobs over economic meltdown

[Geromix]

I think this has been hyped,if the predictions are correct then it would be terrible.

But some facts of Indian economy-
It has evolved as a domestic consumption economy. The latter accounts for 65% of the total GDP.
Compared to that, 42% of Chinese economy is for domestic consumption. These two statistics account for reasons of high disparity between two nations export performance. Indians consume more than they export; hence focus is on domestic markets. The reverse is true in case of China, where the focus is to grab FDI, build factories and export goods.

It is for this reason that Indian economy would revive quickly the most because of our domestic driven economy.

Take a look at this article-
Indian economy quick revival

Yes exports are an important part of the overall economy(around 20%) but the slowdown in that won't grind Indian economy to a halt.

Already there are signs of revival,just today this came out in Economic Times-

"The growth rate in exports for the month of December may still be in the negative, but a modest 1.6% as against 12.1% for October, and 9.9% for November, according to estimates by the commerce ministry that incorporated data from most sectors."

-7 Jan,2009-Economic Times

Here is the link for it-
Exports put up better show

Predicting the future in these uncertain times is foolishness.

Regarding what GoI is doing,it has already unveiled two monetary and fiscal packages.(Rate cuts,extra spending,sops for exporters,tax cuts etc)

There might be some bonus packages in the coming months.

No need to worry about what GoI and how India is doing,we have an economist as the PM.(Your concern is still appreciated)

In times like this one must abandon pessimism for cautious optimism.

 

[XYON]

OOOPPPSSS!! Seems like the PHOOK from the Indian self-inflated, self-inflicted ''GHOBARA'' of being a regional economic player is leaking fast!! That is indeed BAD NEWS for the Indians on this forum who step-up up so valiantly to defend BAHARAT MATA, just like the over-projected heroes in their Bollywood movies!

India has recently stepped up mainly as a BRANCH OR BACK OFFICE for the main global economic players. The idea is pretty simple, with the HQ going bust and firing people, how do you suppose the back-office will sustain its global AYASHIAN & PHURTIAAN and for how long?

Give it another 6-8 months and even the Tata's, Mittal's and other such go-getters would be bleeding financially and economically!!

Pakistan's economy is not even in the global playing field to either dent in good times or to be extensively dented in bad times by such major global economical collapses!! We can get by even with a few billions in aid from lending institutions (which is quite alright by any of the world standards)!

Pakistan - India's case will soon be that of David vs Goliath! The bigger they are the HARDER they fall!! So its just may be back to the donkey-carts and TONGA's for the Indian economy pretty soon! Lets see after a few months!

 

[civfanatic]

Satyam is 4th largest IT company in India and they fudged there books to show great profits . It has serious implications for IT companies in India as it raises doubt about there books also.
Satyam fraud clouds corporate governance of India Inc



MUMBAI: Chairman B. Ramalinga Raju’s admission that Satyam Computer Services Ltd’s Balance Sheet was completely fabricated got the stock crashing

down by 66.5 per cent to Rs 60 from Wednesday’s high of Rs 188.70.

The share hit a low of Rs 58, as details of the extent of fraud perpetrated by the promoters shook the stock market
and cast a grim cloud over the corporate practices of companies.

The BSE Sensex crashed 470.23 points or 4.55 per cent to 9,865.70, after rising to a high of 10,469.72 earlier Wednesday. Investors aggressively cut their positions. The BSE IT Index plunged 7.70 per cent and BSE Realty tumbled 11.20 per cent.

IT and other sectoral stocks were beaten down badly as the Satyam fraud raised question over corporate governance of other companies also, especially IT.

“The sectors which have done extraordinary well in a very short span of time such as IT and realty attracted distrust as Satyam's case has made investors uncomfortable about these companies,” said Kapil Shah, analyst with DBM Wealth Management.

The Satyam fiasco has left a big question mark on corporate governance in India while sending a negative signal to the foreign institutional investors
, analysts said.

Manish Sonthalia, VP – equity strategy, Motilal Oswal, said, “It is shocking! It has maligned India’s image before the FIIs. In view of the current event, a lot of new regulations are expected in the near term by the regulators. Balance Sheets will be scrutinized meticulously.”

The Satyam story poses a big question over the credibility of auditors in general, as PricewaterhouseCoopers was auditor of the company. The bankers to Satyam included Bank of Baroda, BNP Paribas, ICICI, HDFC, Citi Bank, HSBC.

Anita Gandhi, head-institutional business, Arihant Capital, said, “The Indian technology industry was a very important driver for the country's stock market for nearly a decade. Satyam's fraud is expected to lead a severe blow to the entire industry with investors being more cautious going ahead. This raises serious questions on the entire due diligence process conducted by the auditors of Satyam. What is more surprising is the chairman's confession after his resignation. This means, all along, he did have vested interest in keeping the investors in darkness.”

Raju’s letter to the company board revealed a fraud of unprecedented proportions. He states that Satyam’s balance sheet as on Sep 30, 2008, carries an inflated (non-existent) cash and bank balances of Rs 5,040 crore (as against Rs 5,361 reflected in the books).

Further, it carries an accrued interest of Rs 376 crore which is non-existent. The books carry an understated liability of Rs 1,230 crore on account of funds arranged by Raju, and an over stated debtors position of Rs 490 crore (as against Rs 2,651 crore in the books).
For the second quarter ended Sep 30, 2008, Satyam reported a revenue of Rs 2,700 crore and an operating margin of Rs 649 crore (24% of revenues)

as against the actual revenues of Rs 2,112 crore and an actual operating margin of Rs 61 crore (3% of revenues). This has resulted in artificial cash and bank balances going up by Rs 588 crore in the second quarter alone.

Ankit Sinha, CEO-Spark Advisory, said, “The sentimental impact that was seen across the board was but obvious as the Chairman of Satyam which was one of the reputed company revealed the horrifying internal facts. There are also rumours that the October quarter profit shown by Satyam was inflated. There may not be much impact on the other IT companies and one may see Infosys or TCS go up in next trading sessions. However, if IT companies lower their guidance for the current quarter one may see their stocks plunging in near term.”

Amitabh Chakraborty, President – Equity, Religare, said, “Investors now need to pursue due diligence before investing in a company. Take a careful look at the cash position in the balance sheet. Enquire with the bankers.” [/QUOTE]


Satyam fraud clouds corporate governance of India Inc- Software-Infotech-The Economic Times

 

[keeninterest]

surprising how some people totally mix up all the figures. the figure quoted by ndtv on their news report, in camera is not 10 million but 10 lakh (as a matter of fact the reported figure is between 7-10 lakh as of date) which translates to 1 million and they quoted the commerce secretary, and this figure by march end when the present fiscal ends would expectedly have gone up to around 1.5million, depending on the export figures india is able to achieve.

a very important reason behind this has to be understood, just as a business takes a loan or raises equity in anticipation of better business, on a similar note the people get employed in an anticipation of better business. india anticipated an export order of some $200billion this fiscal but as we can see that is not happening and by what ever figure we miss the target, in the same proportion there will be job loss but that does not mean vis-e-vis last year the head count will go down, as a matter of fact the export bill would have still increased by any thing like 10% (which is a pessimistic take on the achievement, something the industry lobby is projecting) to 15% (which is the optimistic take on achievement, being projected by the economic panel of PM, which I am sure will see a downward revision), and in the same proportions the number of jobs would have also increased if we were to take last fiscal as the base year.

PS: i haven't had time to go though each post except the first few posts, as and when i find time will continue the discussion here on this thread. some one some where said indian gdp is 66% consumption based which is not quite the case, i would want the member to do the calculations and show how did he/she derive at that figure. just for that person's better understanding india last year boost of some 37.5% of gdp as investment, which this yea could probably fall to 35%.

 

[alirulesall123]

10 million indians? Dude thats like 0.000000000000001% of india's population. Let's worry about our own economic conundrums first, bros.

 

[roadrunner]

10 million is quite a bit. That's out of the 150 million employed.

if they're productive output is only $1000 annually, that's a billion loss in GDP.

Realistically it could be anything from $10 billion to 50 billion. And there's a lot of other factors.

Those are just for export, remember. India's economy is entwined with America's much more than China.

 

[BanglaBhoot]

Meltdown hits textile industry


One particular sector of Indian economy that has been badly hit by the ongoing worldwide recession is the textiles and garments manufacturing industry, writes Paranjoy Guha Thakurta

While the Indian economy has been relatively insulated from the international financial crisis, one particular sector that has been badly hit by the ongoing worldwide recession is the textiles and garments manufacturing industry.
Current indications are that at least 1.2 million workers in this industry are going to be without jobs by the end of March. Assuming four others depend on each individual rendered jobless, the total number adversely impacted in this labour-intensive sector would reach six million.

The textiles and garments industry is the second-largest employer in India after agriculture as it directly employs 35 million people and indirectly provides a livelihood to an additional 88 million.

Two years ago, the Indian textiles industry was supposed to have been on the threshold of rapid growth. Today it is in urgent need for resuscitation. Even the figure of 1.2 million job losses put out by the association, the Confederation of Indian Textiles Industry (CITI), could prove to be an underestimate.

Roughly half the total production of textiles and garments in India is exported, 60 percent of it to markets in the United States, Japan and the European Union. The recession in the West had adversely impacted these economies the most as a result of which exports from India are projected to fall sharply in the coming months.

Rising prices of raw cotton have become a contentious issue for the industry. The government is reluctant to reduce the prices paid to cotton farmers as suicides have been widespread in cotton-growing areas.
India is the world’s second-largest producer, exporter and consumer of cotton. With cotton prices rising by 30 percent over the last year, cotton textiles and garments are being priced out of international markets. A number of textile mills have begun ‘voluntary retirement schemes’ for workers.
India’s junior minister for commerce Jairam Ramesh announced last week that India will be joining the global supply chain, meaning, the country will be sending both workers and garments to countries like Bangladesh, which has overtaken India in apparel exports.

Whether India’s skilled textile industry workers will find jobs outside the country remains to be seen.

Union commerce and industry minister Kamal Nath estimated that in the financial year that ended in March 2008, approximately 800,000 garment and textile employees had lost their jobs, almost half of the two million lost in export-oriented industries.

The Indian currency, the rupee, started weakening against the US dollar from the middle of 2008. But exports did not pick up because from around this time, markets in the U.S., Western Europe and Japan began shrinking.
Food comes before underwear. As debt-fuelled consumer spending declined in the rich nations, the markets for Indian textiles and garments started shrinking.

Exports of textiles and garments from India to the U.S. in the January-August period came down from 3.9 billion US dollars to 3.8 billion dollars - this was before the Wall Street meltdown in September. The overall drop in value terms was 1.6 percent, with the drop in exports of garments a much higher 4.8 percent.

The situation has become worse since then. The total output of the textiles sector came down by nearly 10 per cent in the month of October. A study conducted in November by the Federation of Indian Chambers of Commerce and Industry (FICCI) pointed out that investments in the textiles industry were falling and so was its profitability.

When arriving by train in Ludhiana, the largest city in the agriculturally prosperous northern Indian state of Punjab, a recorded voice boasts proudly over the loudspeakers that the city’s textile factories account for 80 percent of the country’s wool production.

Some of the city’s major garments making companies, which create 400,000 jobs in the Ludhiana alone, have suffered more than a 50 percent loss in sales, specifically exports, over the last year.

“Thirty to fifty percent of the business in the garment industry has been lost,” S. A. Jain, chairman for the Knitwear and Apparel Exporters organisation, based in Ludhiana, told IPS.

He added that “twenty to thirty percent of the jobs in the industry have been lost. But the exports is a big business, it feeds a lot of other businesses, so it won’t stop there. Naturally, if the US and Europe are facing a crisis, it affects us’’.

The states of Gujarat in western Indian and Tamil Nadu in the south, two of India’s largest textile producers, have been hit badly by the slump in exports.
“We have already seen a decline of about twenty percent in the last two months in exports of jeans, shirts and trousers,” said Sachin Sahni, vice president, marketing, Cotton Country, a division of Oswal Woollen Mills Limited in Ludhiana.

Sahni said that his the company he works for is feeling the pinch despite domestic sales not doing all that badly –the company’s products are marketed through 600 retail outlets spread across India.

“Unemployment in our sector has gone up,” said Jain, adding: “All segments in the industry, every process will be hit - knitters, dyers, everyone.”
Indian exporters of textiles and garments are facing stiff competition not only from manufacturers in Bangladesh but also from low-cost goods being produced in China, Vietnam and Sri Lanka.

“The [economic] stimulus package announced by the [Indian] government on Dec.7, 2008... has failed to cheer the industry, since it did not address all the major issues,” wrote R.K. Dalmia, chairman, CITI, on the industry association’s website.

A crucial issue not addressed, according to Dalmia, is the need to restructure the loan repayment plans for textile companies. Along with many industry leaders, Dalmia is demanding concessions for the industry.
A recent study conducted by the Economic Times newspaper of eleven major textile corporations in India found that while the total debt among the companies has quadrupled in the last six years, their ability to cover debt had not increased since 2003.

A number of speakers at a seminar on the impact of the economic slowdown on small and medium enterprises that was organised in November by the State Bank of India in Ahmedabad, capital of the western Indian state of Gujarat, called for easier terms for bank credit and reduction in taxes on textiles.

Ram Krishna Mundra of Mahendra Tora Pvt.Ltd. put it plainly at the seminar: “The textiles industry is dying...”

The News Today

 

[BanglaBhoot]

Its a global meltdown and no country is immune -

China's Migrants See Jobless Ranks Soar

SHUANGYAO, China -- The global slowdown is taking a toll on China, claiming the jobs of an estimated 20 million migrant workers and dimming their prospects as they set out in search of work after the New Year holiday.

The year ahead appears no more promising: Officials forecast the number of migrants looking for jobs will reach at least 25 million.

Chen Xiwen, who heads the Chinese Communist Party's office on rural policy, said Monday that about 20 million migrant workers -- nearly a sixth of the total -- lost their jobs in recent months. That number, the first official estimate, underscores the government's challenge in maintaining employment and avoiding unrest.

"For those migrant workers who have lost their jobs, what are they going to do for income when they return to their village? How are they going to manage? This is a new factor affecting social stability this year," Mr. Chen said at a news conference in Beijing.

The government estimates the total population of rural migrants -- those working outside their home village -- at approximately 130 million people.

China doesn't conduct regular surveys to gauge nationwide unemployment; Mr. Chen's estimate of 20 million job losses covered only migrant workers. He said his figure was based on an official survey in January of migrant workers in 15 provinces, which showed 15.3% of respondents had lost their jobs or been unable to find work. He said the total number of migrants seeking work this year will likely be at least 25 million, since usually six million to seven million people join the migrant work force each year.

China's government worries that if migrants cannot find jobs, they will be a force for unrest. The uncertainty is being felt in Shuangyao, just north of the Yangtze River in central China's Anhui province. Roughly 150 people from this village of 60 families -- or almost all able-bodied adults between ages 20 and 60 -- work elsewhere, in cities such as Beijing or factory towns in China's export hub, the Pearl River Delta.

The Lunar New Year holiday, which officially ended Saturday, is the main annual opportunity for these workers to reunite with family and take stock of the year. In Shuangyao, this year's celebration was far more subdued than in the past, residents said.

Firecrackers, which on the new year's eve once went on all night, stopped shortly after midnight. About a quarter of the village's migrants didn't even make it home -- mainly because they had lost their jobs, and were unable to afford the trip or loath to show up with bad news.
Search for Jobs

This week, migrants are setting out to look for jobs. How much work is available -- and how the government handles the disappointment of those who can't find any -- will help determine how much the crisis strains China's system.

"Without our work, this village would have nothing," says Ye Guangzhao, who sells grain and seeds in neighboring Jiangxi province. "We have to go back out and find something."

Shuangyao's migrant workers each send home between $1,400 and $2,000 a year. Without that, those remaining behind -- mostly children and grandparents -- couldn't afford things such as school fees, extra clothing or television.

Farming isn't really an option, because Shuangyao is massively overpopulated. The average family's landholding is just two mu, or about a third of an acre, enough that a family can usually survive off their harvest, but not to provide any real cash income.

Consequently, few migrants feel they can stay. Ye Xiangbin, a 24-year-old demobilized soldier, used to work in a factory making shoes for export, but lost his job when his Taiwanese bosses closed shop late last year. Depressed, he came back home a few months early for the festival, but next week he will set out again in hopes that conditions have improved. "I will try it for a few months. I have no choice," Mr. Ye said.

Government efforts have helped to alleviate poverty in Shuangyao. Last year, a dirt path to the local town was paved, allowing motorbikes to cut an hourlong walk to a 12-minute ride. Rural taxes have been cut and a rural health plan is being implemented.

Estimates in China put the number of protests each year in the tens of thousands, although most are quickly defused by authorities. The current downturn, however, is the most serious since 1989, when a weak economy helped to spur the Tiananmen Square democracy protests.
Focus on Layoffs

Central-government officials have in recent weeks asked companies to avoid layoffs if at all possible, and have stepped up subsidies and training programs directed at migrant workers. The government is also stepping up monitoring of job losses, since China's official unemployment statistics don't cover migrant workers and hence have shown little change despite the economic turmoil.

Mr. Chen, the Chinese official in Beijing, appealed to local government leaders to handle any protests personally and avoid using force. "If a mass incident occurs, leading cadres must all go to the front line, and talk to the people directly, face-to-face, to explain things and convince them," Mr. Chen said.

Residents in Shuangyao say they don't blame the government for the downturn -- but do expect officials to act to turn it around.

Ken Roberts, a professor at Southwestern University in Texas who studies Chinese migrants, says the rising unemployment among rural workers could exacerbate problems in the countryside, such as illegal taxation of farmers and local corruption.

"The burden is going to be higher on people, so they may have less tolerance for these existing problems," Mr. Roberts says.

Local governments across rural China have set up programs to encourage migrants to open businesses and other enterprises, hoping that this will soak up labor that the country's once-booming coasts cannot.

In Shuangyao, this doesn't seem an option. Farmers say poverty is too widespread for a business to gain traction.

"There's no way not to leave the village," says Wu Luo, a 35-year-old construction worker who has been a migrant laborer since leaving school at 16. "The conditions here are too poor and there's nothing for us to do."

China's Migrants See Jobless Ranks Soar - WSJ.com

 

[keeninterest]

India has strong fundamentals. US-India relations are good, India-EU relations are good, India-Russia relations are good, India has attracted huge investment from Japan in recent Gujarat global summit. South Korea is investing huge $$ in India.

quite true and the important thing to be noted are the FTAs that we are discussing with us, eu, japan, and asean which will enhance the trade big time in years to come. here i will like to point out that exports since the time upa formed the central government has increased over 3 folds in the last 5 years. in 2004 the export bill for india was around $55-60billion, and anticipating we are able to do some $175-180billion by this fiscal end, that would translate as something like 24-27% growth year on year, with 2008-09 being a very bad year, and this huge growth was achieved at a time when the expected FTAs were non-existant, so one can very well imagine the major boost these FTAs would cause to that figure of 24-27%. since you mentioned south korea, it gets worth to be mentioned that the fta signed between our two countries is going to benefit india more than sk in short to mid term time period which will scale the balance of trade in india's favor by quite a margin, as was pointed out in the reports that followed post this agreement.

PS: since the figure of 10million is absolutely absurd with out any confirmation from the GoI, which has gone on record and said the figure as of date is between 0.7-1million, so such a topic header tarnishes the threads image as a mere speculation, so it is requested to the moderation team to come up with a more appropriate header to the thread.

thanks.

 

[keeninterest]

Commerce Secretary GK Pillai has said that 15 lakh jobs could be lost in the export sector by March end. Ten lakh or 1 million jobs have already been lost.

India to lose 15 lakh jobs by March

 

[AgNoStiC MuSliM]

We need to worry more about our economy. Don't you all agree?

Focus on the thread topic please, instead of lecturing Pakistanis.

As an open forum, anyone can comment on anything so long as they follow forum rules.

What you are suggesting is that no one should discuss anything related to anyone else.

Perhaps the members should offer personal financial details before they comment on the economy thread so wee can be sure that their finances are in order before they comment about someone else's financial problems?

There are threads on the Pakistani economy where Pakistanis can worry about the Pakistani economy and the instability in Pakistan, this is not one of them.

 

[Flintlock]

And Neo, that "Indians will suffer more because they are export oriented" comment is really strange.

India has gained more, that's why the fall will be steeper, but wherever India's economy does fall, it will be doing better than Pakistan's economy.

Your logic reminds me of a silly radio host who said that African economies will suffer the least in the global recession. I felt like banging my head. Do you get why?

 

[AgNoStiC MuSliM]

If you cannot post on topic, then do not post on the thread.

I find passing judgment on the motives and minds of people posting on this thread absurd and completely tangential to the subject.

If you disagree with an argument then refute it, do not start questioning the motives of the poster.

last warning.

 

[s90]

Whole world is facing economic problems i would be surprised if India isnt effected by the downturn

 

[Vinod2070]

10 million is quite a bit. That's out of the 150 million employed.

if they're productive output is only $1000 annually, that's a billion loss in GDP.

Realistically it could be anything from $10 billion to 50 billion. And there's a lot of other factors.

Those are just for export, remember. India's economy is entwined with America's much more than China.

How so?

China's trade with USA in 2008

Exports Imports Balance
66,250.9 312,704.0 -246,453.1

India
17,604.5 23,903.8 -6,299.3

How is it entwined with America's much more than China?

Seriously, I have seen quite a few posts from you and I doubt that you know anything about economics!