Why new jobs report not comparable with old ones

NEW DELHI: The Standing Committee on Labour Force Statistics said on Friday the change in criteria from monthly per capita expenditure to education levels made it impossible to compare the periodic labour force survey (PLFS) with the employment-unemployment surveys of earlier years.

“In view of this, the PLFS needs to be seen as a new series for measuring employment and unemployment on an annual basis,” the statistics office said.

Joblessness at 45-year high? NSO puts a caveat

​The leaked report had triggered a major controversy, with the opposition parties slamming the government for its failure to create jobs and withholding the jobs report. The government had said that the report was only a “draft” and not final. The report released on Friday by the National Statistics Office (NSO) said the new labour force survey needs to be seen as a new series for measuring employment and unemployment on annual basis.

It said that with the rise in education levels in the economy and rise in household income levels, the aspiration levels of educated youth have also risen. “Thus they may no longer be willing to join the labour force or work force requiring low skills and low remuneration,” the panel said in a note, adding that a decision to use education levels was based on the fact that the education levels in the economy have risen due to various policy interventions like the Right to Education Act.

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“The PLFS results give a distribution of educated employed and unemployed youth across the country, which can be used as a basis for skilling of youth to make them more employable by industry,” the NSO said.

It said that there are various facets to the employment and unemployment scenario and no single data source is complete by itself. “These data sets need to be supplemented by data from other sources so as to collectively give a holistic picture of the overall employment market,” the panel said.

Ban e-cigarettes, says govt’s research wing

NEW DELHI: The government’s research wing Indian Council of Medical Research has recommended “complete prohibition” on e-cigarettes and other Electronic Nicotine Delivery Systems (ENDS) to protect public health.

In a white paper, presented on Friday, the Council said the suggestion is made based on scientific data that shows ENDS contain nicotine which is highly addictive and harmful for health. Use of ENDS also has documented adverse effects including DNA damage, carcinogenesis, cardiovascular and neurological disorders and respiratory problems among others, it said.

ENDS are devices that heat a solution to create an aerosol, which also frequently contains flavours, usually dissolved into propylene glycol and glycerin. There are various types of ENDS devices like e-cigarettes, heat-not-burn devices, vape, e-sheesha, e-nicotine flavoured hookah among others.

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The common type is an e-cigarette that produces an aerosolised mixture of the flavoured liquids and nicotine, which is inhaled by the user.

ENDS can also cause molecular and immunological toxicity and poses risk to foetal development and pregnancy, according to ICMR’s white paper.

The release of the white paper assumes significance amid raging debate over the harm reduction aspects of ENDS with some organisations claiming that they help in smoking cessation and are less harmful alternatives to traditional cigarettes.

However, not buying into such arguments, ICMR said, “The degree to which, if at all, the ENDS or e-cigarettes benefit as tobacco cessation aides is not firmly established, evidence suggests that there is a risk of dual use to some extent and initiation to tobacco addiction to non-smokers. Hence, on the balance these products have a net negative impact on public health.”

The council added, use of ENDS can open a gateway for new tobacco addiction which is a potential threat to the country’s tobacco control laws and ongoing tobacco control programmes.

Joblessness at 45-year high? NSO puts a caveat

NEW DELHI: A little over 6% of India’s labour force was unemployed in 2017-18, the latest year for which government released data on Friday. The unemployment rate is identical to the rate mentioned in a report leaked in January this year, which had showed unemployment to be at a 45-year high.

The leaked report had triggered a major controversy, with the opposition parties slamming the government for its failure to create jobs and withholding the jobs report. The government had said that the report was only a “draft” and not final.

The report released on Friday by the National Statistics Office (NSO) said the new labour force survey needs to be seen as a new series for measuring employment and unemployment on annual basis.

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“This is a new design and uses new metric and it would be unfair to compare it with the past,” Pravin Srivastava, the country’s chief statistician told reporters while releasing the report, a day after the Narendra Modi government was sworn-in. He denied that there was any political pressure to delay releasing the report.

The report showed the female unemployment rate in 2017-18 was at 5.7% while that for males was at 6.2%. The jobless rate for females in urban areas was in double digits at 10.8% while it was at 7.1% for males. In rural areas, the unemployment rate was at 5.8% for males and at 3.8% for females.

The NSO report also unveiled the results of a quarterly survey for urban areas for the period after 2017-18. The results showed that during October to December 2018, the unemployment rate was at 9.7%, higher than the 9.6% recorded in July-September 2018 and similar to the 9.7% in April-June 2018.

The quarterly survey showed that the unemployment rate for females was higher at 12.1%, while it was at 9% for males.

The annual survey showed 57.8% of male workers were self-employed in 2017-18 in rural areas, while the rate was at 57.7% for females. In urban areas 39.2% males and 34.7% females were self-employed.

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The NSO said the first annual report is based on the data collected in Periodic Labour Force Survey (PLFS) during July 2017 to June 2018 and its estimates are linked to various aspects of employment and unemployment at the national and state levels. The quarterly bulletin contains data on employment and unemployment indicators in urban areas only.

The issue of jobs was a key election issue in the just concluded national elections. It has also been a flashpoint in debates between the government and opposition parties.

The results of the annual and quarterly survey pose a policy challenge for the new government and may prompt it to devise ways to create jobs across sectors as well as increase participation of women in the workforce.

China to create co blacklist as US trade war escalates

BEIJING: China on Friday said it would release a blacklist of “unreliable” foreign companies and individuals, hitting back after the United States targeted telecom giant Huawei in their escalating trade war.

The announcement was made a day before Beijing is due to increase tariffs on $60 billion in US goods, capping a week marked by rising Chinese threats of retaliation after President Donald Trump blacklisted Huawei.

The US commerce department placed Huawei on an “entity list” on grounds of national security on May 16, a move that curbs its access to US-made components it needs for its equipment. A 90-day reprieve was later issued.

China’s commerce ministry announced on Friday that it will release its own list of “unreliable entities”.

Ministry spokesman Gao Feng said the list will include “foreign enterprises, organisations or individuals that do not comply with market rules, deviate from a contract’s spirit or impose blockades or stop supplies to Chinese enterprises for non-commercial purposes, and seriously damage the legitimate rights and interests of Chinese enterprises”.

The detailed measures against firms on the list will be released shortly, Gao said.

The Chinese move appears aimed at pressuring foreign companies to maintain commercial relations with Huawei — Washington is reportedly also considering adding Chinese surveillance firms to its list for alleged human rights violations.

Google, whose Android operating system is vital to Huawei phones, is among the companies that have announced that they will abide by the US order.

Another critical partner, ARM Holdings — a British designer of semiconductors owned by Japanese group Softbank — said it was complying with the US restrictions.

“Some foreign entities have violated normal market rules and the spirit of their contracts” to cut off supplies and “take other discriminatory actions against Chinese companies damaging their legitimate rights and interests, and endangering China’s national security and national interests,” Gao said, according to state-owned Global Times.

Rajiv Biswas, Apac chief economist at IHS Markit, said China’s decision to create a blacklist was “a tit-for-tat countermeasure to signal that China can target US firms”.

He said the sanctions could be similar to the US entity list, which restricts the sale of technology by US firms to companies on the list.

Huawei has been thrust to the centre of the trade spat, with Trump suggesting last week that the company could be included in a deal.

The United States claims the company has deep links to China’s Communist-led government and warns that its equipment could serve as a Trojan horse for Chinese intelligence services.

Huawei — the world’s second smartphone maker and a leader in developing next-generation 5G networks — vehemently denies the charges.

China’s entity list will help safeguard a rule-based global supply chain, said Zhang Yansheng, chief researcher at the China Center for International Economic Exchanges think tank.

“In the past, commercial deals were based on contracts, but now those can be changed over so-called security issues,” he told AFP.

Firms that substantially harm a company or supply chain may face punishments or sanctions, Zhang said.

China’s announcement follows a growing war of words.

Washington and Beijing resumed their tariffs battle earlier this month after trade talks in Washington ended without a deal, with the US side accusing Chinese negotiators of reneging on previous commitments.

The countries have exchanged tariffs on $360 billion in two-way trade so far.

Trump said on Thursday the US tariffs have had a “devastating effect” on the Chinese economy.

“The US side has said such lies not just once or twice. Every time China exposes them in time, but the US seems to be very persistent, even obsessed, and keeps repeating these lies,” said Chinese foreign ministry spokesman Geng Shuang.

Trump more than doubled punitive tariffs on $200 billion in Chinese goods to 25 per cent this month, and launched the process to hit nearly all remaining imports from the Asian country.

China responded by announcing that it would increase tariffs on $60 billion in American products on June 1.

The US tariffs appear to have already had an impact on Chinese manufacturing activity, which contracted more than expected this month. Experts note that US consumers and importers bear the brunt of tariffs on products coming into the United States.

Now China is hitting back on Saturday with tariffs ranging from 5 per cent to 25 per cent on 5,410 products.

Those facing the 25 per cent hike include beauty products, sports equipment, musical instruments, wine, condoms, diamonds, wood, fabric and toys.

Chinese state media suggested this week that Beijing could also hit back by stopping exports of rare earths to the United States, cutting off key materials used to make everything from smartphones to televisions and military equipment.

Per-capita income rises 10% FY19

NEW DELHI: The country’s per-capita income is estimated to have risen by 10 per cent to Rs 10,534 a month during the financial year ended March 2019, government data on national income showed on Friday.

In 2017-18, the monthly per-capita income stood at Rs 9,580.

“The per-capita income at current prices during 2018-19 is estimated to have attained a level of Rs 1,26,406 (Rs 10,533.83 monthly) as compared to the estimated for the year 2017-18 of Rs 1,14,958 (Rs 9,579.83 a month), showing a rise of 10 per cent,” according to the annual national income and GDP 2018-19 data released by the ministry of statistics and programme implementation (MoSPI).

The per-capita income is a crude indicator of the prosperity of a country.

The gross national income (GNI) at current prices is estimated at Rs 188.17 lakh crore during 2018-19, as compared to Rs 169.10 lakh crore during 2017-18, rising by 11.3 per cent.

India’s gross domestic product is estimated to have slowed to a five-year low of 5.8 per cent in the last quarter of fiscal ended March 2018-19, mainly due to poor show in the farm and manufacturing sectors.

The growth in gross domestic product (GDP) was slowest since 2014-15. The previous low was 6.4 per cent in 2013-14.

For full year 2018-19, the economic growth is estimated at 6.8 per cent, compared 7.2 per cent in the previous year.

Q4 GDP slowdown due to NBFC crisis: S C Garg

NEW DELHI: Economic affairs secretary Subhash Chandra Garg on Friday said the slow down in India’s GDP in fourth quarter of the fiscal ended March 2019 was due to temporary factors, and it will pick up going forward.

“Slow down in the fourth quarter (of 2018-19) GDP was due to temporary factors like stress in NBFC sector affecting consumption finance. First quarter of current fiscal (2019-20) would also witness relatively slow growth and from second quarter onward it will pick up,” Garg told reporters here.

GDP growth falls to 5.8% in January-March quarter, falls below China

India’s GDP (gross dometic product) growth for the January-March (Q4) quarter slowed to 5.8 per cent from 6.6 per cent in the previous (October-December) quarter, government data showed on Friday. This is the slowest GDP growth rate in five years, as a chill in domestic and global consumer demand hit manufacturers and service providers.

Garg, who also holds the charge as finance secretary, said that capital investment, including private investment, is expected to pick up.

Data from Central Statistics Office (CSO) showed that India’s economic growth rate slowed to five-year low of 5.8 per cent during January-March quarter of 2018-19.

The growth rate of the economy has weakened mainly due to poor performance in the farm sector as well as in the manufacturing sector.

Forex reserves up by $1.99 bn to $419.99 bn

MUMBAI: India’s forex reserves increased by $1.994 billion to $419.992 billion for the week ended May 24 on swelling up of the core currency assets, the Reserve Bank said on Friday.

The overall reserves had declined by $2.05 billion to $417.99 billion in the previous reporting week. The reserves had touched an all-time high of $426 billion in April 2018.

In the reporting week, foreign currency assets, which are a major component of the overall reserves increased $1.991 billion to $392.188 billion, the apex bank said.

Expressed in dollar terms, foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and the yen held in the reserves.

Gold reserves remained unchanged at $23.021 billion, according to the data.

The special drawing rights with the International Monetary Fund increased $0.8 million to $1.445 billion.

The country’s reserve position with the fund also increased $2 million to $3.336 billion.

Canadian economy up a measly 0.4% in Q1, but March data show promise

Canada’s economy expanded at an annualized pace of just 0.4 per cent in the first three months of the year, giving the country its weakest back-to-back quarters of growth since 2015.

Statistics Canada says the real gross domestic product reading for the first quarter follows a revised reading of just 0.3 per cent in the previous quarter. The first-quarter reading was slightly higher than the prediction of the Bank of Canada, which has stressed the slowdown was temporary and that growth has been accelerating in the second quarter.

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READ MORE: Bank of Canada holds key interest rate at 1.75%

The report says downward pressure on growth was driven by weakness in net trade as imports rose and export volumes saw their first quarterly decrease since 2017. Canada saw substantial declines in its exports of farm and fishing products as well as a drop in crude-oil shipments.

On the positive side, the agency says overall economic growth was boosted by the highest quarterly level of household spending in two years and the biggest jolt of business investment in equipment and machinery in 23 years.

WATCH: Global trade war biggest threat to Canadian economy, says Bank of Canada Stephen Poloz

The release also showed growth of 0.5 per cent in March, which suggests “much better momentum” heading into the second quarter of the year, according to CIBC chief economist  Avery Shenfeld.

“Overall, the economy has slid past a near stall in the past two quarters, but the details and progress in March suggest that we’re going to make up for some of that,” he wrote.

— With files from Global News reporter Erica Alini

GDP growth slumps; Unemployment at 45 year high

NEW DELHI: India’s GDP (gross domestic product) growth for the January-March (Q4) quarter slowed to 5.8 per cent from 6.6 per cent in the previous (October-December) quarter, government data showed on Friday. This is the slowest GDP growth rate in five years, due to poor performance in agricultural and manufacturing sectors. The previous low was 6.4 per cent in 2013-14.

Meanwhile, India’s unemployment rate rose to 6.1% + in 2017/18 fiscal year, according to data released by the statistics ministry.

The announcement of GDP figures meant that India lost its place as the world’s fastest-growing major economy to China, which is currently on 6.4 percent growth.

Economic affairs secy Garg attributes Q4 GDP slowdown at 5.8% to NBFC crisis

Economic affairs secretary Subhash Chandra Garg on Friday said the slow down in India’s GDP in fourth quarter of the fiscal ended March 2019 was due to temporary factors, and it will pick up going forward. The growth rate of the economy has weakened mainly due to poor performance in the farm sector as well as in the manufacturing sector.

The Central Statistics Office (CSO) also revealed that GDP growth during 2018-19 fiscal stood at 6.8 per cent, lower than 7.2 per cent in the previous financial year.

Confirming unemployment rate projected in a pre-election leaked report, the government on Friday said joblessness in the country was 6.1 per cent of total labour force during 2017-18, the highest in 45 years.

The data released by the labour ministry, on a day when Modi 2.0 Cabinet took charge, showed 7.8 per cent of all employable urban youth being jobless, while the percentage for the rural was 5.3 per cent.

The joblessness among male on all India basis was 6.2 per cent, while it was 5.7 per cent in case of females.
(With agency inputs)

Sitharaman becomes finance minister: Expert views

MUMBAI/NEW DELHI/BENGALURU: Prime Minister Narendra Modi on Friday named Nirmala Sitharaman, previously the country’s defence minister, as the next finance minister, while the chief of his Bharatiya Janata Party (BJP) has been appointed as the home minister.

BJP president Amit Shah masterminded the party’s landslide victory in the April-May general election.

What experts said

Garima Kapoor, economist and vice-president, Elara Capital, Mumbai:

“This allocation has come as a surprise, but I would say Nirmala has done a fairly good job as defence minister and she has proved that she has got a very good acumen. I think she fits the bill better than anyone else.”

“After (Arun) Jaitley, she is the best bet that Modi could have had. She has worked under the ministry, has domain knowledge, and has also worked in the sector. So, all the main boxes are ticked.”

“Nirmala also did a fantastic job defending the Rafale deal in the Parliament, and worked well in whatever little time she was handling defence. So, this may also be kind of a reward for a job well done.”

Ganesh Kumar Gupta, president, Federation of Indian Export organisations (FIEO):

“The new government has to address infrastructure bottlenecks to impart competitiveness to exports. The exporting fraternity looks forward to support encompassing economic growth, sustainable and inclusive development.”

Yogesh Nagaonkar, founder and CEO, Rowan Capital Advisors, Mumbai:

“It is a big surprise and very unexpected news. The initial expectation of the market from her would be to see how she addresses liquidity concerns. We need to have good liquidity in the market to achieve growth. How the PSU bank crisis will be addressed will also be watched.”

“Frankly, the portfolio should have been given to Piyush Goyal, who is a CA by qualification, and he would have been the first choice of the market. But, I think Nirmala has been doing well previously, so it should be alright.”

Omkeshwar Singh, head rank MF, Samco Securities, Mumbai:

“It is a surprise as the market was expecting either Piyush Goyal or Amit Shah (to be the Finance Minister). It will take some time and we will need to see how she performs. The major challenges will be the GST Council and how she will manage that and also economic growth. For a short term, it will be an uncertainty as her appointment was not expected.”

What India’s new ministers need to do

On the finance front, the minister needs to decide on ways to provide more cash in the system, spur growth, create jobs. In Telecom & IT sector there is the need to push work on high-speed broadband and internet network, conduct 5G auctions. Statistics minister needs to make data more reliable and robust. 24×7 power supply still needs to become a reality.

Sachin Taparia, founder and chairman, LocalCircles:

“As far as startups go, having Mrs Sitharaman as the finance minister is a good thing as it was under her tenure as the commerce minister that Startup India was launched.”

“There are a number of direct tax and GST-related issues that are negatively impacting startups and we look forward to working with her.”

AJay Bodke, CEO-PMS, Prabhudas Lilladher, Mumbai:

“Nirmala Sitharaman is eminently qualified to steer India’s economy, which is facing multiple headwinds of slowing consumption impulses, moribund private capex cycle and anaemic exports.”

“With limited fiscal manoeuvrability, it remains to be seen how she can inject a strong dose of fiscal stimulus to revive animal spirits. She will need to strike a delicate balance between the re-distributive policies advocated by Mr Modi towards the poor & downtrodden and yet ensure the government’s firm commitment to adhere to medium-term fiscal consolidation.”

NR Bhanumurthy, economist at National Institute of Public Finance and Policy:

“The choice of Nirmala Sitharaman as the finance minister will improve optimism on the economy as with her finance and trade background she could quickly adapt to deal with the economic challenges. The new finance minister will have to take steps to revive consumer demand and investments to boost economic growth as the economy is likely to grow below 7% for second consecutive year.”

Jagannadham Thunuguntla, research head, Centrum Wealth, Mumbai:

“The ambiguity of portfolio allocation is now removed, so this is good for the market in a sense. We will get to see Nirmala’s proposals and approach in the budget, which is due in about a month.”

“Emergence of clarity is what was important, and now the narrative in markets will be about the economic policies that will be adopted to revive and stimulate the slowing economy.”

“To stimulate the economy, the Modi government must have thought it will be good to give the portfolio to someone who understood and handled commerce.”

Bekxy Kuriakose, head of fixed income, principal asset management, Mumbai:

“It is too soon to say. I have a neutral view. We will have to wait for her to speak to get her thoughts and ideas on reforms for the markets and the economy, but it will be in line with what the BJP-led government would overall target anyway.”

Sandip Sabharwal, domestic fund manager, Mumbai:

“Nirmala Sitharaman is a relatively unknown entity despite holding a key portfolio in the previous government. Expectations as such will be low. From the markets’ perspective, it’s neutral at this stage.”