Petrol reaches Rs 81/litre in Delhi

May 28: Abdul Kareem was forced out of school and into a life of odd jobs like repairing bicycles before he finally managed to pull his family out of abject poverty transporting goods across Delhi in a mini truck.

The job, and the slim financial security that came with it, was the first stepping stone to a better life.

All that is now gone as India reels under the economic impact of its protracted coronavirus lockdown. Mr Kareem's out of a job and stranded in his village in Uttar Pradesh with his wife and two children. Their minuscule savings from his Rs 9,000 a month job have been exhausted, and the money he saved for books and school uniforms is spent.

"I don't know what the job situation will be in Delhi once we go back," Mr Kareem said. "We can't stay hungry so I will do whatever I find."

At least 49 million people across the world are expected to plunge into "extreme poverty" -- those living on less than $1.90 per day -- as a direct result of the pandemic's economic destruction and India leads that projection, with the World Bank estimating some 12 million of its citizens will be pushed to the very margins this year.

Some 122 million Indians were forced out of jobs last month alone, according to estimates from the Center for Monitoring Indian Economy, a private sector think tank. Daily wage workers and those employed by small businesses have taken the worst hit. These include hawkers, roadside vendors, workers employed in the construction industry and many who eke out a living by pushing handcarts and rickshaws.

For Prime Minister Narendra Modi, who came to power in 2014 promising to lift the poorest citizens out of poverty, the fallout from the lockdown brings with it significant political risk. He won an even larger second term majority last year on the strength of his government's popular social programs that directly targeted the poor, such as the provision of cooking gas cylinders, power and public housing. The breadth and depth of this renewed economic pain will only increase the pressure on his government as it works to steer the country's economy back on track.

"Much of the Indian government's efforts to mitigate poverty over the years could be negated in a matter of just a few months," said Ashwajit Singh, managing director of IPE Global, a development sector consultancy that advises several multinational aid agencies. Noting that he did not expect unemployment rates to improve this year, Singh said: "More people could die from hunger than the virus."

Desperate Times

Mr Singh points to a United Nations University study estimating 104 million Indians could fall below the World Bank-determined poverty line of $3.2 a day for lower-middle-income countries. This will take the proportion of people living in poverty from 60% -- or 812 million currently, to 68% or 920 million -- a situation last seen in the country more than a decade ago, he said.

A World Bank report found the country had been making significant progress and was close to losing its status as the country with the most poor citizens. The impact of PM Modi's lockdown risks reversing those gains.

The World Bank and the CMIE estimates were published in late April and early May respectively. Since then the situation has only become grimmer, with harrowing images of people making desperate attempts to reach their villages, on crowded buses, the flatbeds of trucks and even on foot or on bicycles dominating media coverage.

The Rustandy Center for Social Sector Innovation at the University of Chicago Booth School of Business analyzed the unemployment data from the CMIE, collected through surveys covering about 5,800 homes across 27 states in April.

Researchers found rural areas were the hardest hit, and the economic misery was the result of the lockdown, rather than the spread of infections in the hinterland. More than 80% of households had experienced a drop income and many won't survive much longer without aid, they wrote in a report.

The government has promised cheap credit to farmers, direct transfer of money to the poor and eased access to food security programs -- but these help people who have some documentation, which many of the poorest don't. With millions of impoverished people now in transit across the country, the food security situation is dire -- news reports are emerging of people foraging through piles of rotting fruit or eating leaves.

Shattered Economy

The economy was already growing at its slowest pace in over a decade when the virus struck. The lockdown, which came into effect on March 25, has hammered it, stalling business activity and putting a lid on consumption, pushing the economy to what may be its first full-year contraction in more than four decades.

It's dire enough to warrant the country exiting its lockdown, as it has been doing incrementally since May 4, even as its infections are surging. India is now Asia's virus hotspot with infections crossing 151,000 according to data from Johns Hopkins University.

PM Modi, who has come under criticism for the pain inflicted on the poor, has said his government will spend $265 billion or about 10% of its GDP to help Asia's third-largest economy weather the pandemic's fallout. But experts say only a part of it is direct fiscal stimulus, and probably smaller than the total damage done to the economy during the lockdown period.

"What is especially worrying is the government's response," said Reetika Khera, an economics professor at the Indian Institute of Technology in Delhi. "The epidemic will magnify existing -- and already high -- inequalities in India."

Still, the economic measures aren't going to kick in for some time and industry will likely struggle to restart because of the flight of labour from industrial hubs.

And as the harsh summer unfolds more pain lies in store in the villages now dealing with returning migrant workers.

"There are no factories or industries here, there are just hills," said Surendra Hadia Damor, who had walked nearly 100 km from Ahmedabad, Gujarat, before a voluntary organisation drove him to his village in the neighboring state of Rajasthan. "We can survive for a month or two and then try and find a job nearby -- we will see what happens."

Davos, Jan 20: India's richest 1 per cent hold more than four-times the wealth held by 953 million people who make up for the bottom 70 per cent of the country's population, while the total wealth of all Indian billionaires is more than the full-year budget, a new study said on Monday.

Releasing the study 'Time to Care' here ahead of the 50th annual meeting of the World Economic Forum (WEF), rights group Oxfam also said the world's 2,153 billionaires have more wealth than the 4.6 billion people who make up 60 per cent of the planet's population.

The report flagged that global inequality is shockingly entrenched and vast and the number of billionaires has doubled in the last decade, despite their combined wealth having declined in the last year.

"The gap between rich and poor can't be resolved without deliberate inequality-busting policies, and too few governments are committed to these," said Oxfam India CEO Amitabh Behar, who is here to represent the Oxfam confederation this year.

The issues of income and gender inequality are expected to figure prominently in discussions at the five-day summit of the WEF, starting Monday. The WEF's annual global risks Report has also warned that the downward pressure on the global economy from macroeconomic fragilities and financial inequality continued to intensify in 2019.

Concern about inequality underlies recent social unrest in almost every continent, although it may be sparked by different tipping points such as corruption, constitutional breaches, or the rise in prices for basic goods and services, as per the WEF report.

Although global inequality has declined over the past three decades, domestic income inequality has risen in many countries, particularly in advanced economies and reached historic highs in some, the Global Risks Report flagged last week.

The Oxfam report further said "sexist" economies are fuelling the inequality crisis by enabling a wealthy elite to accumulate vast fortunes at the expense of ordinary people and particularly poor women and girls.

Regarding India, Oxfam said the combined total wealth of 63 Indian billionaires is higher than the total Union Budget of India for the fiscal year 2018-19 which was at Rs 24,42,200 crore.

"Our broken economies are lining the pockets of billionaires and big business at the expense of ordinary men and women. No wonder people are starting to question whether billionaires should even exist," Behar said.

As per the report, it would take a female domestic worker 22,277 years to earn what a top CEO of a technology company makes in one year.

With earnings pegged at Rs 106 per second, a tech CEO would make more in 10 minutes than what a domestic worker would make in one year.

It further said women and girls put in 3.26 billion hours of unpaid care work each and every day -- a contribution to the Indian economy of at least Rs 19 lakh crore a year, which is 20 times the entire education budget of India in 2019 (Rs 93,000 crore).

Besides, direct public investments in the care economy of 2 per cent of GDP would potentially create 11 million new jobs and make up for the 11 million jobs lost in 2018, the report said.

Behar said the gap between rich and poor cannot be resolved without deliberate inequality-busting policies, and too few governments are committed to these.

He said women and girls are among those who benefit the least from today's economic system.

"They spend billions of hours cooking, cleaning and caring for children and the elderly. Unpaid care work is the 'hidden engine' that keeps the wheels of our economies, businesses and societies moving.

"It is driven by women who often have little time to get an education, earn a decent living or have a say in how our societies are run, and who are therefore trapped at the bottom of the economy,” Behar added.

Oxfam said governments are massively under-taxing the wealthiest individuals and corporations and failing to collect revenues that could help lift the responsibility of care from women and tackle poverty and inequality.

Besides, the governments are also underfunding vital public services and infrastructure that could help reduce women and girls' workload, the report said.

As per the global survey, the 22 richest men in the world have more wealth than all the women in Africa.

Besides, women and girls put in 12.5 billion hours of unpaid care work each and every day -- a contribution to the global economy of at least USD 10.8 trillion a year, more than three times the size of the global tech industry.

Getting the richest one per cent to pay just 0.5 per cent extra tax on their wealth over the next 10 years would equal the investment needed to create 117 million jobs in sectors such as elderly and childcare, education and health.

Governments must prioritise care as being as important as all other sectors in order to build more human economies that work for everyone, not just a fortunate few, Behar said.

Oxfam said its calculations are based on the latest data sources available, including from the Credit Suisse Research Institute's Global Wealth Databook 2019 and Forbes' 2019 billionaires list.

Hyderabad, Apr 12: Indicating that prolonged lockdown to contain coronavirus spread may lead to job cuts in the Indian IT industry, NASSCOM former president R Chandrashekhar has said that the work-from-home culture may become a positive development in the long run as it opens up newer avenues and save investments by IT firms.

The former bureaucrat also said startups which are surviving on funds infused by venture capitalists may face tougher situations if the present scenario deteriorates.

"The larger companies may not be actually cutting jobs for two reasons. One is that they do not want to lose their employees and they have money to pay. Many of them ( big companies), even if they do shed some jobs it might be at the most people who are on temporary or intern type and all. But they would not want regular and permanent employees to go. So as long as they have sufficient flexibility in their books, they would continue," said NASSCOM former president.

"But beyond a point that it goes on, for let us say, two months or three months, then even for them, they will feel the pressure. They may not just keep on providing subsidies to the employees. So the key question will be how long that goes on," Chandrasekhar said.

He also said the work-from-home systems being adopted by several firms across the globe, including India, may have a negative impact on the industry in the short-term, but in the long run it would change the work culture which hitherto was not experienced by many of the IT firms in India.

 On impact of the prolonged lockdown on startups, he said it would be a big challenge for the budding enterprises as the investments they get are based on their ideas and future revenues and the present situation under which peoples movement is curbed may shackle their progress.

 "Where will they (startups) get money to pay salaries to their employees. Venture capital investors would not pay the money or invest their money to pay salaries because they are not in the charity business."

If the employees are not paid and if they leave and it is difficult for the startup againto come up. So the whole investment plan goes for a toss, he said.

Former chairman of NASSCOM, B V R Mohan Reddy said a clear picture as to what is going to happen has not yet emerged as the situation with all respects is still evolving. Reddy said there will be a demand shrinkage for the IT industry as the entire world is under stress. "There is no economy in this world that is going to do well in this situation.

So, therefore, there will be a demand shrinkage, he said, indicating tougher times of the industry ahead.