Serious India’s Economic Free Fall Just Beginning! Temasick Still Investing for Long Term?

[Pinkieslut]

India’s economic woes may have only just begun
2 days ago

AFP
Small businesses have suffered the most during the lockdown
India's economy contracted by 23.9% in the three months to the end of June, making it the worst slump since 1996. A grinding lockdown brought on by the coronavirus pandemic has disrupted business and left millions out of jobs, reports the BBC's Nikhil Inamdar.
For the last five months, since India imposed one of the world's strictest lockdowns, Aditi Limaye Kamat's restaurant business has been bleeding money.
Her four popular eateries occupy prime real estate space across Dadar, an expensive neighbourhood in Mumbai, the country's financial capital.
"Only deliveries are being permitted. And that's not helping very much. It amounts to merely 10 to 15% of our overall business in normal circumstances and doesn't even cover salary as well as running costs," Ms Kamat told the BBC.
She wants the government to permit in-restaurant dining at the earliest with strict social distancing guidelines like in other parts of the world. "If not, many of us will be out of business by January," she adds.
India's National Restaurant Association has predicted that 40% of the country's restaurants will not survive the pandemic.
A fine print of the April to June GDP data released by the government on Monday reflects the pain of people like Ms Kamat.
Hotels and trade saw the sharpest contraction at 47% during the lockdown period, only preceded by construction activity which halved.

Barring agriculture, which posted modest growth of 3.4%, everything from mining to manufacturing and electricity to services contracted at alarming levels during this period.
"The time has come to unlock all the restrictions imposed in the lockdown phase at the earliest," Milan Thakkar, who runs a company that manufactures wall putty and plaster, said. His company, Walplast, saw sales plunge by a third during the lockdown and expects no incremental growth this year.
Calls from desperate Indian business owners to open up the economy are getting louder, despite India's coronavirus tally of 3.6 million cases, with nearly 80,000 new ones being reported every day.
One of the most severe lockdowns in the world has done little to curb the spread of the virus in India. What it has done is flatten the wrong curve, Rajiv Bajaj, the managing director of Bajaj Auto, one of India's largest manufacturers of auto rickshaws, said a few months ago.

At -23.9%, India has become the fastest contracting large economy in the world, according to economist Vivek Kaul. And the likelihood is that this number will be further downward revised, given that the government's data collection was severely impaired during the lockdown.
"I suspect the revisions will be much larger," Pronab Sen, the former chief statistician of India, told the news site Bloomberg Quint.
All of this puts India firmly on the path to the deepest recession in its independent history. The country last contracted by -5.2% in 1979-80. The estimates for a contraction this year range between an optimistic -3% to a more realistic -10%.

Getty Images
Some 40% of the country's restaurants may not survive the pandemic
The implications of this for India's capacity to lift large swathes of its population out of poverty and generate employment for the youth are significant.
McKinsey Global Institute estimates that India will need to create at least 90 million non-farm jobs by 2030, if it is to absorb all the young workers that enter its labour market.
For a country that's lived through a decade of jobless growth and seen 19 million formal economy jobs vanish after the lockdown, this will take some doing.
India will have to clock a growth rate of at least 8 to 8.5% in the post Covid-19 scenario to achieve this goal, according to McKinsey. The global consultancy gives the country 12 to 18 months to act on a range of crucial structural reforms in areas such as healthcare and banking, take immediate steps to make its labour markets more flexible, improve social safety nets and ease the climate for doing business.
A failure to embark on this path could mean a decade of hardship, signs of which are already visible.
In the more immediate term, the government will need to focus on reversing the collapse in domestic demand and private consumption - which determines 60% of GDP - through more aggressive fiscal and monetary response to get the economy back on track.
"If left unaddressed, a longer period of below-normal activity risks knock-on effects on the labour market and ultimately on the banking system," warns analyst Sonal Verma. She expects India's central bank to reduce interest rates by at least another half a percent, starting in December.
At under 1% of GDP, India's stimulus measures so far have been among the most stingy among the world's major economies.
'Where will the poor like us go?'
The government has argued that it didn't see the point in pressing both the brake and the accelerator at the same time. But with a gradual unlocking of the restrictions, there are hints that a second stimulus package is being prepared.
Sanjeev Sanyal, principal economic adviser to the finance ministry, told local media recently that India was prepared to build infrastructure at an "unprecedented" scale as well as allow a several percentage points rise in its debt-to-GDP ratio to get back on the growth path.
But economists warn that with revenues plunging, tax receipts drying up and a fiscal deficit already expected to shoot up four percentage points above the expected levels, the leeway for India to spend its way out of the crisis remains limited at best.
And ultimately, a recovery in the economy will hinge on a recovery in the pandemic curve, which in India's case is yet to peak, according to some experts.
How expediently the Narendra Modi-led government gets that under control will play a significant role in determining India's economic fate.

 

[mojito]

A Loong term. Is not two terms or three. But as many terms as needed to hand over in good shape.

 

[tanwahtiu]

Serve this fake degrees producer country right for stealing jobs in many countries. This 病毒 is a bad karma to fuck them deep deep.

 

[birdie69]

Serve this fake degrees producer country right for stealing jobs in many countries. This 病毒 is a bad karma to fuck them deep deep.

I thought India has plenty surplus of genuine talents, their country shouldn't have come to this shit situation. All the CECA PMET talents imported to Singapore quickly go back to India, helping their native country to be economically sound again.

 

[laksaboy]

I thought India has plenty surplus of genuine talents, their country shouldn't have come to this shit situation. All the CECA PMET talents imported to Singapore quickly go back to India, helping their native country to be economically sound again.

The genuine ah neh talents have gone to the USA. Sinkieland picks up the remaining rubbish.

An analogy: after a meal at a hawker centre, the cleaner clears the table of trays, plates, bowls and cutlery. He also wipes the table clean.

 

[tanwahtiu]

Cheats can only cheat outside of India.

Back home to India they will be killed by their own kind.

I thought India has plenty surplus of genuine talents, their country shouldn't have come to this shit situation. All the CECA PMET talents imported to Singapore quickly go back to India, helping their native country to be economically sound again.

 

[bart12]

https://seekingalpha.com/news/3610305-brookfield-singapores-gic-buy-indian-telecom-towers-for-3_4b
Brookfield, Singapore's GIC buy Indian telecom towers for $3.4B
Aug. 31, 2020 11:09 PM ET|About: Brookfield Infrastructure P... (BIP)|By: Carl Surran, SA News Editor
A group of investors led by Singapore sovereign wealth fund GIC and Brookfield Infrastructure Partners (NYSE:BIP) agrees to acquire a telecom tower company from a unit of India's Reliance Industries for $3.4B.
The tower company, with a portfolio of ~135K recently built towers across India, forms the telecommunications network of Reliance Jio Infocomm; GIC says the network eventually will expand to include 175K towers.

 

[knnb40]

after yr-2000 Temasek / GIC....or those cronies are just paper general and scholars with no actual on the ground experience in anything from engineering to investment.
look at how much we have lost (both financially and face) in China investment (suzhou), now in india....never learn....
they only see how the Jap gain back in the 90 when they go out of Jap to invest in Singapore, Vietnam, Thailand, PRC...and they think they are up to the game....

 

[tanwahtiu]

Japanese hv had covered 90% of many industries from constructions, bio to medical engineering products and they are investing outside Japan for low labour manufacturing costs. And create own jobs to work outside Japan for Jap citizens.

what does PAP Singapore bring with them to go outside? Only gamble our CPF monies with no benefits of create jobs for our people in countries they invest in.

after yr-2000 Temasek / GIC....or those cronies are just paper general and scholars with no actual on the ground experience in anything from engineering to investment.
look at how much we have lost (both financially and face) in China investment (suzhou), now in india....never learn....
they only see how the Jap gain back in the 90 when they go out of Jap to invest in Singapore, Vietnam, Thailand, PRC...and they think they are up to the game....

 

[congo9]

We better try to boost our GNP. We are aging nation. But the problem is the government tries to play the role of PTE sector. They try to mimic the role of businesses. Trying to generate returns. They send in people with no relative experience to do the job, or they are not suitable to be businessman. But things don't work out this way. Successful pte businesses and business typical behave differently from a civil service. They value innovation appreciate it. They don't fall automatically fall in line, but they need to be convinces that something work then they will fall inline. They are not bound by protocols and SOPs.

 

[Pinkieslut]

Coronavirus crisis shatters India's big dreams
SURAT (NYTIMES) - The hit that India's dreams have taken from the coronavirus pandemic can be found in the hushed streets of Surat's industrial zone.

You can see it in textile mills that took generations to build but are now sputtering, eking out about one-tenth of the fabric they used to make.

You can see it in the lean faces of the families who used to sew the finishing touches on saris but, with so little business, are now cutting back on vegetables and milk.

You can see it in the empty barbershops and mobile phone stores, which shoppers have deserted as their meager savings dwindle to nothing.

Mr Ashish Gujarati, the head of a textile association in this commercial hub on India's west coast, stood in front of a deserted factory with a shell-shocked look on his face and pointed up the road.

"You see that smoke stack?" he asked. "There used to be smoke coming out of it."

Not so long ago, India's future looked entirely different. It boasted a sizzling economy that was lifting millions out of poverty, building modern megacities and amassing serious geopolitical firepower. It aimed to give its people a middle-class lifestyle, update its woefully vintage military and become a regional political and economic superpower that could someday rival China, Asia's biggest success story.

But the economic devastation in Surat and across the country is imperiling many of India's aspirations. The Indian economy has shrunk faster than any other major nation. As many as 200 million people could slip back into poverty, according to some estimates. Many of its normally vibrant streets are empty, with people too frightened of the outbreak to venture far.

Much of this damage was caused by the coronavirus lockdown imposed by India's Prime Minister, Mr Narendra Modi, which experts now say was at turns both too tight and too porous, both hurting the economy and spreading the virus. India now has the fastest growing coronavirus crisis, with more than 80,000 new infections reported each day.

A sense of malaise is creeping over the nation. Its economic growth was slowing even before the pandemic. Social divisions are widening. Anti-Muslim feelings are on the rise, partly because of a malicious social media campaign that falsely blamed Muslims for spreading the virus. China is increasingly muscling into Indian territory.

Scholars use many of the same words when contemplating India today: Lost. Listless. Wounded. Rudderless. Unjust.

"The engine has been smashed," said Ms Arundhati Roy, one of India's preeminent writers.

"The ability to survive has been smashed. And the pieces are all up in the air. You don't know where they are going to fall or how they are going to fall."

In a recent episode of his weekly radio show, Mr Modi acknowledged that India was "fighting on many fronts". He urged Indians to maintain social distancing, wear masks and keep "hale and hearty".

India still has strengths. It has a huge, young workforce and oodles of tech geniuses. It represents a possible alternative to China at a time when the United States and much of the rest of the world is realigning itself away from Beijing.

Bundles of fabric at a textile market in Surat on Sept 1, 2020. PHOTO: NYTIMES
But its stature in the world is slipping. Last quarter the Indian economy shrank by 24 per cent, while China's is growing again. Economists say India risks losing its place as the world's fifth largest economy, behind the US, China, Japan and Germany.

"This is probably the worst situation India has been in since independence," said Ms Jayati Ghosh, a development economist at Jawaharlal Nehru University in New Delhi.

"People have no money. Investors aren't going to invest if there is no market. And the costs have gone up for most production."

Many neighbourhoods in the capital of New Delhi where low-paid workers used to live are deserted, shell-like, a hot wind blowing through empty, tin-walled shacks. A few years ago, when the economy was expanding at a 9 per cent clip, it was difficult to find a place to rent.

When Mr Modi was swept to power in 2014 on a tide of Hindu nationalism, many Indians felt their nation had finally found the forceful leader to match their aspirations.

But Mr Modi has concentrated his energies on divisive ideological projects, like a new citizenship law that blatantly discriminates against Muslims or tightening the government's grip over the mostly Muslim region of Kashmir.

Quarter by quarter, India's economic growth rate has been dropping, from 8 per cent in 2016 to 4 per cent right before the pandemic. Four per cent would be respectable for a developed country like the US. But in India, that level is no match for the millions of young people streaming into the workforce each year, hungry for their first job.

Many of the complaints that investors make about India - the cumbersome land policies, the restrictive labour laws, the red tape - predate Mr Modi. But his confidence and absolutism, the same qualities that appealed to many voters, may have added to the problems.

Four years ago he suddenly wiped out nearly 90 per cent of India's paper currency to tamp down corruption and encourage digital payments. While economists cheered both goals, they say the way Mr Modi sprang this move on India did long-lasting damage to the economy.

That impulsiveness emerged again when the coronavirus struck. On March 24, at 8pm, after ordering all Indians to stay indoors, Mr Modi shut down the economy - offices, factories, roads, trains, borders between states, just about everything - with four hours' notice.

Tens of millions of Indians lost their jobs instantly. Many worked in factories or on construction sites or in urban homes, but they were migrants from rural India.

Mr Sanjay Singh (left) who, with lockdowns now lifted, returned from his village to resume factory work, in Surat, on Sept 2, 2020. PHOTO: NYTIMES
Fearing they would starve to death in city slums, millions poured out of the urban centres and walked, rode bicycles or hitched desperate rides back to their villages, an epic reverse migration from city to countryside that India had never seen. That dragged coronavirus into every corner of this country of 1.3 billion people.

Now, looking back on it, many economists trace the root of India's interlocking crises - spiraling infections and a devastated economy - to this moment.

"India's embarrassing slowdown in the second quarter of 2020 is almost entirely because of the nature of the lockdown," said Dr Kaushik Basu, a former chief economist at the World Bank and now a professor at Cornell. "This may have been worth it if it arrested the pandemic. It did not."

He called the approach "lockdown-and-scatter" and said Mr Modi's policies had been a "failure".

Some workers have trickled back to the cities. But the construction and manufacturing industries have contracted sharply because many migrant labourers remain so traumatised, they don't want to ever go back.

"We went hungry for days," said Mr Mohammad Chand, who once worked in a garment factory near Delhi but fled to his ancestral village, hundreds of miles away.

"I had to shunt from place to place after being thrown out by the landlord. Even relatives started showing us the door."

"I don't want to be in that situation again," he said.

In Surat's textile market, Mr Jagdish Goyal sat scowling in his deserted shop with piles of women's suits in teals and oranges, priced for the working poor, now stacked to the ceiling.

"Nobody's buying," he said. "Why? Because there are no social functions. No weddings to dress up for. No places to go. No big birthday parties. People are scared to go out."

Owner of textile business JP Goyal Synthetics Jagdish Goyal stands amid slow-moving stock piled to the ceiling, in Surat on Sept 2, 2020. PHOTO: NYTIMES
Fear of catching the virus seems to be a decisive factor in India's economic crisis, extending beyond the lockdown. Going out to shop means risking illness in a time when sick people are sometimes turned away from hospitals.

According to a recent Google Mobility Report, which tracks cellphone data, trips to retail and recreation areas have dropped by 39 per cent compared with before the pandemic. In Brazil and the US, the only countries with more coronavirus infections, the drops were less than half as severe.

Mr Modi's government has provided some emergency relief, around US$260 billion (S$354.8 billion), but economists said too little flowed to the poor. Tax revenues have plummeted, some states are unable to pay health care workers and government debt is approaching its highest level in 40 years.

Still, Mr Modi's popularity keeps rising. A recent poll published in India Today, a leading newsmagazine, showed his approval rating at 78 per cent, the highest in five years.

Part of this can be explained by the competition's collapse. The biggest opposition party, the Indian National Congress, has been hit by defections, back-stabbing and a never-ending existential crisis on who should lead it.

And Mr Modi's embrace of Hindu nationalism plays well within the Hindu majority, about four-fifths of the population.

"His protection of Hindu values is a big reason why I support him," said Mr Goyal, the seller of women's suits. "If our self-respect isn't alive, what good is the economy?"

A few parts of the economy are doing okay. Agriculture has been lifted by strong monsoon rains. In some cities, like New Delhi, many businesses are open again, though they might have new signs on the doors that say: "No more than 3 People Inside" or "Flat 40 Percent Off!"

But the virus and the economy are intertwined, and India's virus graph is a steady staircase, going up. India is also No. 3 in virus deaths, though its per capita death rate is much lower.

Anxiety hangs in the humid air of Surat's textile zone.

"No one comes for a shave anymore," lamented Mr Akshay Sen, a young barber with a few coins in his pocket.

His words echoed off the shuttered shops. Behind him stood a bunch of men milling around a tea stand but not buying any tea.

Behind all that, like a warning sign on the horizon, stood yet another tall brick smok estack, smokeless.

 

[Rogue Trader]

Modi's economic solution is to stir shit with China at the border