10 mln Indians to lose jobs over economic meltdown

[keeninterest]

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?

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

flint mate lets not get into saying "india will do better than pakistan" as there never was any competition or a comparison, and neither are they a benchmark in any which way, though i wish them all the best!

for a better perspective which could benefit this discussion, i am giving a rough estimate of indian gdp, where the variance should be more or less negligible, and just in case it is more then it would not be of much significance.

GDP = consumption + gross investment + government spending + (exports − imports)
= 572.5billion+412.5billion+144billion+(162billion+35billion-230billion)=$1,100billion (for fiscal 2007-08)

consumption = 52% of gdp (derived figure)
investment= 37.5% of gdp
government spending= $144billion
merchandise exports= $162billion
services exports= $35billion
imports= $230billion
size of indian economy in 2007-08= $1.1trillion

if we assume the export bill for india were to fall to zero then we see there is a major impact as that would effect the gdp by something like 18%. “effect”, would mean the gdp would shrink in size but as mentioned in various other posts and articles that is not happening, as the GoI is expecting an increase in the cumulative figure of exports for the year but yes there will be an impact when we see india not meeting its target of $200billion. if i assume india to do some where between $175-185billion, which would mean a short fall of $15-25billion, and if i were to assume the size of indian economy to be around $1.16-1.24trillion by the end of this fiscal then that would mean the short fall could cost india some where in the region of 1.2-2%.

the concern is investment as the global banks have not seen growth in lending which till last fiscal formed a decent chunk of indian corporate investments in india, second in the same context is fdi where again one will see a short fall from the targeted figure of $35b, to an optimistic take of $25b.

though the consumption in rupees term has increased as one can see the lending by the indian banks to have increased by something like 20-25% in rupees term but still there is a slow down of sorts as it is certainly slower than previous years increase of 30(+)%. liquidity was an issue but for the time being it has been taken care off, but the government has to make sure the banks have to lend the money to the corporates rather than parking that money in bonds, securities or with the rbi as is happening now, government needs to get strict. the best thing to have happened this year has been a big decrease in inflation rate and with the recent drop in the prices of petrol and diesel it is expected to fall to some thing like 2-3% by march end.

quite clearly india will be effected, and the effects are there to be seen for all but the impact is not drastic as we can see growth across the board, and there is enough room to come back but that is more a question of confidence returning in the international arena and when that happens india along with our eastern neighbor china would be few of the first countries which would race away with sound growth rate figures.

 

[pama]

India has 260 billion reserves that is 25% of its economy.
By any standards it is in good position to handle meltdown.

 

[omairhr]

Its never good when people lose jobs... wherever they might be.

 

[Energon]

So its just may be back to the donkey-carts and TONGA's for the Indian economy pretty soon!

Highly unlikely. People once having tasted the fruits of economic success hardly ever go back without a fight; it's just human nature. What matters is whether that entity has the potential to win that fight, which IMHO India does.

What you have to understand is that in the case of India, the global economic downturn will only mean that the efforts will be re-diverted to the vast untapped resource that exists in their own back yard which has so far been ignored for the sake of quick foreign exchange based profits. But now it is clear that there is no alternative left other than to mobilize the masses at home to integrate them into the economy. In fact the West is counting just as much on this vast market to reinvigorate the global economy as India will to sustain itself. This group consists of a large and growing number of middle class and lower middle class Indians with basic education who can be productive, aspire to some level of consumerism and have virtually no consumer debt at all.

This may very well end up being a blessing in disguise in the long term for the Indian economy itself. For one, the government will have to go forward with the numerous infrastructure projects earmarked during the economic boom because that is the best way to keep a vast number of people employed (particularly in nations with socialistic tendencies, which ironically is something even the Obama administration is looking into). At the same time developed nations with a lot of expertise in infrastructure are just as antsy about entering this market themselves because of the sheer potential in India and the saturation in their own markets. A better infrastructure combined with the human resource potential in a country like India will more than likely result in high economic returns in the shape of vastly increased domestic productivity.

Also, slower moving foreign markets mean a greater availability of talent at home and hence a boon to the burgeoning local industries which do not cater to offshore IT related services. This combined with the lower capital investments and operational costs for conducting business in India leaves room for a very, very prolific production and consumption base.

In the short term however, until the reorientation process takes off substantially (it is already underway) we will see steady job losses in the BPO sector, and the growth rates although substantial will not be in that magical realm of 8-9%+.

The only thing that can derail this process is:
1. Unwillingness of the GoI to further liberalize the markets and fiscal policies; or even worse, engage in unwarranted protectionism.
2. More terrorist attacks which lead to war.

 

[macintosh]

It's not only India but china will lose more than 40 million jobs although officials have put the numbers at 20 million only.


China demands loyalty from the military as 20 million lose their jobs news

02 February 2009



The Chinese government warned yesterday that 2009 will be the toughest year in the century for China as more 20 million migrant workers have lost their jobs in wake of the global crisis that has taken a toll on the country's economy;

Intriguingly, it has asked the military to obey the Communist Party in view of multiple security threats ahead.

China, which usually does not put authenticated figures out in public domain, yesterday said about 20 million rural migrant workers have either lost their jobs or have not yet found employment and have gone home to the countryside, Chen Xiwen, director of the office of the central leading group on rural work, told journalists at a press briefing.

At a central meeting held yesterday, president and commission chairman Hu Jintao said the he expected the military to stand united and must obey the Communist Party absolutely in view of the multiple security threats that the country is likely to face soon.


Xinhua news agency reported that the military commission issued a statement to all military forces that they should "uncompromisingly obey the Party and Central Military Commission's command at any time and under any circumstances."

The communist party fears that the soaring unemployment numbers in the hinterland of China will lead to social unrest as well as the separatist movement in Tibet and the western region of Xinjiang.

The current year marks the 50 years of exile of the Dalai Lama to India as well as the well known 20th anniversary of the pro-democracy protest that took place in Beijing by Chinese students.

With about 15.3 per cent of the 130 million migrant workers returning home jobless from cities to the hinterland, ''Indeed, quite a large share of the rural migrant workers have lost their jobs,'' he told reporters in Beijing.

These 20 million jobless figures were released after the ministry of agriculture conducted a survey in 150 villages in 15 provinces, before the week-long New Year holiday, which began on 25 January.

China is reported to be monitoring closely the jobless figures in the 800 million people who live in the countryside, due to fears that a huge rise in unemployment may trigger social unrest and law and order problem, which the third largest world economy does not want to showcase the unemployment problem to the world after its economy having galloped in double digit figures for the past decade.

With a booming economy, boosted by an ever growing export sector, nearly 130 million rural Chinese had left their homes to gain employment in the prosperous manufacturing provinces along the sea coast, which produced many cheap consumer goods from toys, furniture, electronic goods and clothing among others and sold globally.

China's manufacturing sector is nearing a technical recession with nationwide manufacturing activity standing at 41.2 in December compared to a low of 40.9 in November as the global economic slowdown and recession in the US, UK, Japan and many EU countries takes its toll on Chinese manufacturing units and exports (See: Chinese manufacturing sector close to recession).

Small and medium firms which have labour intensive work like the manufacturing hubs, in Zhejiang and Guangdong provinces have seen massive layoffs due to production cuts and factory closures.

The impact has been felt more in cities like the Dongguan, an export hub near Hong Kong, where thousands of workers either remain unpaid or have lost their jobs as the toy factories battle the downturn overseas.

According to government and industry estimates, more than 68, 000 small companies nationwide collapsed in the first half of 2008 and about 2.5 million people have lost their jobs in the Pearl River Delta region alone last month.

China's exports declined 2.2 per cent year-on-year to $115 billion in November, the first monthly fall since June 2001, says China's General Administration of Customs (See: China's exports down 2.2 per cent in November)

Yesterday the Chinese government warned that 2009 will be "possibly the toughest year" since the turn of the century.

Releasing the first document of the year by jointly by the state council and the central committee of the communist party of China, it said that the current global financial crisis and the slowdown in the world economy had taken its toll and left a negative impact on the Chinese economy.

"The development of agriculture and rural areas in 2009 is of special significance, the biggest potential for boosting domestic demand lies in rural areas; the foundation for securing steady and relative fast economic growth is based upon agriculture; the toughest work of securing and improving people's livelihoods stays with farmers, it said."

The document has asked companies to take on social responsibilities by hiring rural migrant workers and also urged the local and central government departments to come out job creating schemes and increase the income of rural people.

 

[Cheetah786]

Takling as if some kind of warrent has already been signed. Yes, the downturn will have an effect..but losing 10million jobs is a joke... has been reported on Geo..but, nowhere else ..not even in the Indian Media..Companies here are still hiring.. 2.1 lakh jobs will be for grabs this quarter ..

Link:New Year brings 2.5L jobs-India Business-Business-The Times of India

10Million is going to look like a joke if OBAMA goes ahead with protection policy but hey hey hey you keep smoking that whacky tobacy you going to need it for keep beliving in what you are saying as reality is going to hurt.

 

[macintosh]

Global downturn to cost 15 lakh Indian jobs by March


Press Trust Of India
New Delhi, February 03, 2009
First Published: 22:09 IST(3/2/2009)
Last Updated: 22:27 IST(3/2/2009)



With global downturn taking its toll on India, about 15 lakh people employed in the exporting sector will be out of jobs by March this year, Commerce Secretary GK Pillai said on Tuesday.
"We have figures from August till middle of January. We estimate something like between 7-10 lakh job losses till now," Pillai told a leading news channel in an interview.

He said if the slowdown, especially in the US, Europe and Japan continues, another five lakh people would be unemployed by March.

Earlier in the day, Pillai told reporters that the prospects for the country's outward trade look bleak for the next fiscal as well.

"It would be an achievement if we reach USE 160 billion-mark in 2009-2010," he said.

After an impressive expansion of over 30 per cent in the first six months of 2008-09, export growth has turned negative with the result that the total shipments in the current fiscal would fall much short of the $ 200 billion target.

Though exports account for less than 20 per cent of the country's GDP, the sector is highly employment oriented with the total estimated 6.5 crore workforce.

"Exports are going to come down and we have to live with it," Pillai said.

 

[macintosh]

Things are improving however as is pointed in the article.




India's exports put up a better show in December
2 Feb 2009, 1321 hrs IST, Amiti Sen, ET Bureau

NEW DELHI: India's export performance in December 2008 has shown a relative improvement compared to the performance of the previous two months,

according to official figures released by the commerce department on Monday. While growth remained in the negative territory, the drop in exports was restricted to 1.1% at $12.7 billion over December 2007. Decline in exports in October and November 2008 was much higher at 12.1% and 9.9% respectively.

India's Imports during December, 2008, registered a growth of 8.8% at $ 20.25 billion. There was, however, a sharp 31.9% growth in non-oil imports during the month which was offset by a 30.9% fall in oil exports, mainly due to a drop in global oil prices.

Sectors which contributed to pulling up exports during the month include pharmaceuticals, engineering products and some agricultural commodities. However, export of products like gems & jewellery, textiles, handloom and chemicals continued to take a battering.

Handicraft and handloom exports suffered the most with export growth plumetting to a negative 64% in December 2008, a commerce department official said. Exports of gems & jewellery and chemicals declined by about 21% while textile exports went down by an estimated 13%.

The increase in exports of engineering goods, pharmaceuticals and agriculture products like tobbaco and spices have been in the range of 19%-25%, the official added.

India's cumulative value of exports for the period April- December, 2008 was $ 131.99 billion against $ 112.73 billion registering a growth of 17.1 per cent. Even if export performance continues to improve in the next quarter, it would be difficult to reach the $200 billion export target set for 2008-09.

 

[Dilli]

^^^^^ The actual nos. of layoffs are nearly 15 lacs. not 100 lacs, as in the article.

 

[dabong1]

Its always the people at the bottom that lose there jobs first.....i hope india helps these people out.

 

[Dilli]

----deleted----

 

[roadrunner]

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!

China is in a much better position than India. It doesn't export expendable crap to the US. India does. Call centers, and other outsourced jobs are pretty simple to do, yet due to the cheap labour in India, many jobs were created - well paying jobs relative to per capita income.

On the other hand, China has leverage over the US due to its imports, in many ways has a hand over, but more importantly it's chief export to the US is high tech products and raw materials - things which the US can ill afford to do without.

 

[Dilli]

On the other hand, China has leverage over the US due to its imports, in many ways has a hand over, but more importantly it's chief export to the US is high tech products and raw materials - things which the US can ill afford to do without.

China is in no better position as compared to India.

China has more exports to the US than India, and those exports are market based commodities, not raw material. In fact 60% of ships from US and Europe come to China empty. I hope u understand what does it mean. It means that China exports more than what it imports.

Chinese economy is export based, India's not.

It doesn't export expendable crap to the US. India does.

What do u mean by this??

Call centers, and other outsourced jobs are pretty simple to do, yet due to the cheap labour in India, many jobs were created - well paying jobs relative to per capita income.

Even in this Western recession, call centers jobs in India are going no-where. Most of the jobs losses are in export sector.

So most job losses in China are also in export sector. Chinese govt. has already announced 25 million job losses as official. And that's official from the chinese govt. media. 25 million job losses in a country which according to u is safer than India's.

 

[Energon]

China is in a much better position than India. It doesn't export expendable crap to the US. India does. Call centers, and other outsourced jobs are pretty simple to do, yet due to the cheap labour in India, many jobs were created - well paying jobs relative to per capita income.

On the other hand, China has leverage over the US due to its imports, in many ways has a hand over, but more importantly it's chief export to the US is high tech products and raw materials - things which the US can ill afford to do without.

China primarily exports expendable items that clutter the superstores where Americans buy crap we don't need with money we don't have thereby adding to the consumer debt and the consequent defaulting... so no, almost everything (cheap consumer goods) coming out of China is and/or will be deemed expendable.

India does way beyond simply fielding call centers such as market research, personal and business accounting (especially for tax season) and para legal research etc etc which are far more integral to the day to day operations of many major American companies. The non tech/low skill call center business itself has been reducing from the Indian BPO portfolio for at least 5 years on account of high employee turnover and human resource attrition. In this category other countries like Mexico and Philippines have been shown to be better. The tech aspect however will remain in India.

India and China are both bound to suffer in different ways for different reasons.

 

[Vinod2070]

China is in a much better position than India. It doesn't export expendable crap to the US. India does. Call centers, and other outsourced jobs are pretty simple to do, yet due to the cheap labour in India, many jobs were created - well paying jobs relative to per capita income.

On the other hand, China has leverage over the US due to its imports, in many ways has a hand over, but more importantly it's chief export to the US is high tech products and raw materials - things which the US can ill afford to do without.

You are wrong, completely wrong. The above two posts should have told you why!

This is serious delusion. You have a tendency to start believing what is convenient for you, even though the facts scream otherwise.