India’s economy in ‘severest recession’ amid dire prediction for further deterioration

NEW YORK: India’s economy is in “severest recession” since 1996 — the year it began publishing its gross domestic product numbers — while other countries, especially China, are fast recovering from the devastation of the coronavirus pandemic, according to an American media report.

In a dispatch from New Delhi, The New York Times wrote that hundreds of millions of Indian labourers and shopkeepers, who keep the country’s economy running, still can’t find relief, amid predictions that the economic situation would take a turn for the worse.

India’s economy shrank 7.5 percent in the three months that ended in September compared with a year earlier, the newspaper said, citing government figures.

“The new figures firmly ensconced India’s position among the world’s worst-performing major economies, despite expansive government spending designed to rescue the thousands of small businesses severely battered by its long, hastily imposed lockdown,” Times’ correspondent Emily Schmall wrote.

The paper quoted Nikhil Das, a 62-year-old manufacturer of silk ties and scarves in New Delhi, as saying that his business is teetering on the edge of collapse. His sales, which depend on demand from luxury shops and airport retailers, have fallen by four-fifths, it said, adding that he needs payments from customers to make up for his manufacturing costs, but retailers who cant move his wares still owe him more than US $50,000.

Das, according to the report, has idled six workers he once paid for each tie and scarf they made, and he has been treated for stomach pain that his doctor has attributed to stress.

“The money supply chain is broken,” Das was quoted as saying. “It is a constant source of tension to me.”

An estimated 140 million people lost their jobs after India locked down its economy in March to stop the outbreak, while many others saw their salaries drastically reduced, the Mumbai-based Center for Monitoring Indian Economy was cited as saying. As the lockdown was eased, many went back to work, but more than six million people who lost jobs haven’t found new employment.

In a June survey by the All India Manufacturers Organization, about one-third of small and medium-sized enterprises indicated that their businesses were beyond saving.

The industry group said that such a “mass destruction of business” was unprecedented.

Businesses like Das’s form the backbone of India’s still-developing economy, with small and medium-size enterprises employing about four-fifths of the labour force, the report said.

India’s textile factories, leather tanneries, brick kilns, foundries and other small enterprises form “part of the country’s social fabric, bringing local wealth and local employment,” Venkatachalam Anbumozhi, an economist who focuses on South and East Asia, was quoted as saying.

Just a few years ago, the report noted that India, with a population of 1.3 billion people, was one of the world’s fastest-growing large economies, clocking a growth of 8 percent or more.  Global businesses began to warm up to the idea of India as a potential substitute to China, both as a place to make goods and to sell them, according to the Times.

But India’s economy was facing headwinds well before the pandemic, it said. Between April and December 2019, G.D.P. grew only 4.6 percent.

“India was expected to really step into China’s shoes and give that additional boost to globalization that was missing,” Priyanka Kishore, head of South Asia at Oxford Economics, was quoted as saying.  “And that’s where India didn’t really play out the role it was largely expected to play, and that role seems to be diminishing more and more.”

Since coming to power in 2014, Prime Minister Narendra Modi took some steps to shake up India’s economy, but some of his policies, including demonetization, under which large currency notes were banned overnight in an effort to crack down on tax avoidance and money laundering, “proved disruptive”, the report said.

“Mr. Modi also increasingly turned India’s industrial policy inward, which many economists say has hurt overall growth,” the report said.  The slowdown, said Ms. Kishore, ‘almost homegrown.’

The near-total nationwide lockdown in March brought the economy to a halt, instantly stripping many Indians who rely on daily wages of any prospect of earning money, the dispatch pointed out. Millions of workers who over the years had been drawn to India’s urban centers for jobs started returning home to rural areas.

“The economic problems are by no means over,” the report said as it referred to officials desperate to stimulate business lifted some of the lockdown restrictions, allowing more movement — and further spreading the coronavirus. The country is recording a sharp decline in infections from a September high, but experts fear it is only a lull, it said.

Even after the pandemic wanes, Kishore projected that India will be the worst-affected among the world’s major economies: Debt-laden companies will have to borrow even more. Growth could fall to 4.5 percent annually over the next five years, well below the 6.5 percent growth that had been projected before Covid-19.

“The worst,” said Dr. Anbumozhi, the economist, citing the potential impact to small business in particular, “is yet to come for India.”

2 COMMENTS

  1. Pakistanis can learn from the disaster of India

    The Entire DEMO EXERCISE is a GIGANTIC FRAUD AND A DISASTER OF THE BRAIN OF NARENDRA MODI

    1.Even the RBI initally accepted the disaster – but later went along like all lackeys and Indian weasels.as under: The minutes of the RBI Board Meeting which took place just a few hours BEFORE the execution of the DEMO DRIVE stated as under:

    • “It (demonetisation) is a commendable measure but will have short-term negative effect on GDP for the current year,” read the minutes of the RBI board meeting.
    • “Most of the black money is held not in the form of cash but in the form of real sector assets such as gold or real estate and that this move would not have a material impact on those assets,” the board observed in its 561st meeting held in Delhi.dindooohindoo

    2.THERE HAS BEEN NO IMPACT OF DEMO ON SO CALLED TERROR IN INDIA AS THE NUMBER OF THESE ATTACKS AND THE CASUALTIES OF INDIAN SOLDIERS AND CIVILIANS HAS INCREASED AFTER THE DEMO DRIVE

    3.THERE HAS BEEN NO IMPACT OF DEMO ON SO CALLED DRUG TRADE IN INDIA AS THE NUMBER OF THESE SEIZURES AND THE HAS INCREASED AFTER THE DEMO DRIVE

    4.AS PER THE RBI REPORTS THE COUNTERFEIT CURRENCIES OF RS 50 AND RS 100 NOTES HAS INCREASED BY 50% AS THE COUNTERFEITERS HAVE FOCUSSED THEIR TECHNOLOGY ON THESE NOTES.THAT IT BECAUSE THE COUNTERFEITERS ARE TAKING TIME TO PERFECT THE COUNTERFEITING OF THE RS 500 AND RS 2000 NOTES AND ITS SUPPLY CHAIN OF PRINTING, DISTRIBUTION, STOCKING AND DISSEMINATION

    5.THE GOI/RBI STATISTICS ON COUNTERFEIT RS 500 AND RS 2000 ARE MISLEADING.THESE NOTES ARE NOT COMING INTO THE BANKING SYSTEM AT THE SAME FREQUENCY AS IN 2017.IF THE NOTES DO NOT COME INTO THE BANKS THE FAKES ARE NOT DETECTED.THEREFORE THE RBI STATISTIC IS FALSE AND MISLEADING

    6.AS PER RBI REPORTS,THE FLOWS OF RS 2000 NOTES INTO THE BANKS HAS REDUCED OVER THE YEARS AND BANKS ARE DOLING OUT LESS AND LESS RS 2000 NOTES.THAT MEANS THE RS 2000 NOTES ARE BEING WAREHOUSED BY THE MARKET – FOR MONEY LAUNDERING AND BLACK MARKETING.THAT DEFEATS THE PURPOSE OF DEMO AND MAKES THE CASE FOR DEMO – PART 2 FOR THE RS 2000 NOTES

    7.THE ABOVE PROVES THAT THE ENTIRE DEMO DRIVE WAS BOGUS AND NOT BECAUSE ALL THE CASH CAME BACK INTO THE SYSTEM.IT IS BECAUSE ALL THE AIMS FAILED (AS ABOVE)

    8.AS PER THE RBI REPORT,RS 11000 CRORES OF CASH DID NOT COME INTO THE BANKING SYSTEM. HOWEVER , THAT IS ALSO A MISLEADING STATISTIC AS

    • THE RBI HAS SPENT RS 10000 CRORES IN THE LAST 3 YEARS TO PRINT THE NEW NOTES
    • COULD RS 11000 CRORES WHICH IS 0.6% OF THE CASH THAT CAME INTO THE BANKS,REPRESENT THE SOILED,DAMAGED NOTES OR FORGOTTEN CASH OR CASH OUTSIDE INDIAN WHICH COULD NOT RETURN TO INDIA DUE TO THE FEAR OF QUESTIONING AND PROSECUTION – BUT IS LEGIT MONEY ? THAT WOULD BE A CASE OF THE INDIAN STATE CHEATING ITS CITIZENS
    o THIS RS 11OOO CRORES IS NOT COUNTERFEIT AS IT IS ASSUMED THAT THESE ARE SERIALLY NUMBERED NOTES
    • HAS RBI ACCOUNTED FOR EACH LEGIT CODE NUMBERED CURRENCY NOTE WHILE CALCULATING THE RS 11 CRORES AMOUNT OR IS IT BASED ON A DEDUCTIVE FIGURE ? DEDUCTIVE FIGURES ARE BASED ON ASSUMPTIONS OF COUNTERFEITS AND DAMAGED NOTES.

    9.THE RBI REPORT DOES NOT STATE THE VALIUE OF THE COUNTERFEIT CURRENCY EXCHANGED FOR GOOD NOTES IN THE DEMO DRIVE.THAT IS A PURE LOSS OF THE DEMO DRIVE AND WAS A FOOL PROOF MODE OF CONVERTING CURRENCY AT POST OFFICES,COOPERATIVES AND BANKS IN TIER 2 AND 3 CITIES

    10.IT MUST BE NOTED THAT IF COUNTERFEIT CURRENCY IS SENT INTO INDIA BY A STATE ACTOR,THEN IT IS ONLY REASONABLE TO ASSUME THAT THE SAME HAS ALREADY BEGUN AND IS MORE PROFITABLE THAN BEFORE.

    • THE RBI HAS NOT RELEASED THE STATISTICS FOR THE NEW NOTES BEING COUNTERFEITED.
    • EVEN IF THE CASES ARE LESS IT WOULD BE SUBJECT TO PARA 10.5 ABOVE.
    • ALSO,A COUNTERFEIT IS COUNTED BY THE RBI ONLY IF IT IS DETECTED.GOOD COUNTERFEITS ARE NOT DETECTED.
    • AS A MATTER OF RECORD,PAKISTAN’S MINT PRINTS CURRENCIES FOR SEVERAL NATIONS INCLUDING GCC NATIONS,WITH FAR MORE STRINGENT QUALITY NORMS AND SEVERE SAFETY AND RISK FEATURES THAN THE INDIAN RUPEE.

    11.IT IS A MATTER OF RECORD THAT THE SMEs HAVE BEEN DESTROYED BY DEMO AND GST AND THEIR OUTPUT HAS BEEN TAKEN OVER BY LARGE CORPORATES – AND THAT IS WHY THE GST AND POWER DEMAND IS HIGHER THAN BEFORE.BUT 100s OF MILLIONS OF LABOUR ARE UNEMPLOYED AND SMEs ARE DESTROYED FOREVER.

    12.IN LIGHT OF ALL OF THE ABOVE,WHAT IS THE BENEFIT OF THE DEMO DRIVE ? WAS THERE A SINGLE BENEFIT TO THE NATION ? THAT IS WHY THE INFORMATION SOUGHT BY THE APPELLANT IS IN PUBLIC AND NATIONAL INTEREST

    13.BESIDES THE ABOVE ,THE DEMO FRAUD AND THE DEMO C OUNTERFEIT FRAUD ( WHEREIN THE COUNTERFEITS ARE EXCHANGED FOR REAL CURRENCY) – IS NOT STATED IN THE RBI REPORT

    • THERE IS NO REPORT IN THE MEDIA, OF ANY RECOVERY MADE FROM THE CONVERTERS BY THE DRI/ED

    14.HAS THE RBI DATA ON DEMO BEEN AUDITED BY A 3 RD PARTY ? HAS THE RS 15 LAC CRORES OF NOTES BEEN CHECKED FOR EACH CODE NUMBER AND WATERMARK AND COUNTERFEIT ?

    • IF NOT,THEN THE NOTES MAY INCLUDE COUNTERFEITS.
    o IF YES,THEN THE ESTIMATED COUNTERFEIT AS SAY 3% OF THE AGGREGATE CASH IN INDIA – WOULD BE A BENEFIT – WHICH THE RBI HAS NOT HIGHLIGHTED IN THE REPORT.DOES THAT MEAN THAT THE COUNTERFEITS ARE IN THE NOTES SUBMITTED AND EACH NOTE HAS NOT BEEN VERIFIED.
    • EVEN IF THE COUNTERFEITS WERE CHECKED AND FOUND OUT AFTER THE EXCHANGE AND AFTER MANY MONTHS, THE DATA OF THE SAME AND THE ACTION ON THE DEPOSITORS (SINCE CCTVs CAPTURE THE DEPOSITOR),IS IN PUBLIC INTEREST

  2. I present the largest money laundering operation in the world sponsored by a state
    The Hindoo Notebandi/Demonetisation
    The Demo Scam – which no Indian Newspaper reported – as they were all paid off – as they are of the ilk of the Brahmins and Banias.dindooohindoo
    It is the disaster of the Brain of Narendra Modi !
    It is a conversion cum tax amnesty scheme to convert black money and counterfeit money into REAL WHITE MONEY ,and the SERVICE FEE IS LEVIED BY NARENDRRA MODI AND AMIT SHAH
    Part 1
    Conversion Route
    • Party A has Rs 1 crore of Old Cash (which is obviously unaccounted) and the choice of paying tax and interest thereon has lapsed as there is no VDIS – and post Demo the deemed tax is 100% at the minimum
    • Party B (Stage 1 Converter) has Rs 65 lacs of New Cash – which is given to Party A in lieu of the Old Cash of Rs 1 crores which is then given to Party C to X as under:
    o Party C to X (Stage 2 Converter) are legal entities who trade in Nil VAT/ST products (or under Exemptions and /or Compounding) and are POS Retailers who then , make manual or backdated E-Bills for fictitious sales of items to unknown individuals and deposit the new cash into the bank
    o Party C to X deposit the cash in banks whose books are open for 30-45 days before the date of announcement of the Demo or whose IT systems allow backdating of E- Bank Statements (within the period of reporting to the RBI and other Regulators)
    • Party Z then taps Party A to convert the New cash Received of Rs 70 lacs into a capital entry to clean the cash at a rate of , say 15%, wiring Rs 59 Lacs to Party A, as a capital receipt etc, and taking the Rs 70 lacs of new cash from Party A
    • Party Z which is basically front for Party B – hands the cash to Party B, after charing the custodial, logistics and security charges
    • Party B then resumes the same chain as in Step 2 above, wherein the rate of the conversion, id.est., 30% keeps rising as the DEMO deadline appears
    • Party A can convert the Rs 50 lacs into cash – new and old – at a premium, at any time that it is required
    Notes
    • Since converters had the new cash within a day and as per news reports , even before the announcement of Demo, they have to be part of the establishment
    o If the converters had withdrawn the new notes from the bank, the banks would have tipped off the DRI/ED etc and possibly reported to the RBI – in which case they would be raided (but were not) or they would have to explain why large amounts of cash were withdrawn (for labour wages – although wages are not paid in Rs 2000 notes , agri payments etc) and on specific dates and how/why the banks were satisfied about the same o Hence, if the converters got the new cash o/s the Banking system – that is fraud and PROOF THAT THE CONVERTERS ARE PART OF THE ESTABLISHMENT
    o If the converters got the new cash from the banks – it is proof of collusion and fraud by the bankers, as past patterns of withdrawal by bank customers (for labour, wages, agri payments etc), would not support the new notes withdrawal
    • Since converters had TO TRANSPORT CASH ACROSS LOCATIONS, IT WOULD HAVE REQUIRED SECURITY OR PERHAPS STATE SECURITY, they have to be part of the establishment as o It is impossible that the state would not be aware of the logistics and security
    o It is impossible that the state would not raid the cash movement
    • Since Party C to X, who would have reported drastic increase in cash sales and deposit of cash into the bank , would not be able to support the same by PAST PATTERNS OF RAW MATERIAL PURCHASES AND TRADING PURCHASES AND SUCH LARGE AMOUNTS OF PURCHASES OF RAW MATERIALS IN CASH – COULD NOT HAVE BEEN JUSTIFIED BY PARTY C TO X , W/O THE SUPPORT OF THE ESTABLISHMENT
    • Cash recovered in the “form of old notes” by the “DRI/ED and the Police” – were all recovered from the “so called originators” and “so called garbage dumps”- w/o “a single case of cash recovered” from “the converters/entry operators”
    • No cash was recovered from the “converters/entry operators (Party B and Party C to X, as stated above)”, who are obviously part of the establishment – which is unusual , as the operators would be having the new currency which o Is either kept in a house/safe or o Stocked in the bank (which would have tipped off the DRI/ED etc or
    o Transferred the cash around in new stocking points and neither of the 2 above points can happen w/o the support of the establishment
    • Since the GDP is still growing on the “computation mode of GDP on expenditure mode”, and there is “no shortage of notes” of less than Rs 100,it would mean that the Industrial agglomerations typified by the SSI and the Cash sector,have been “able to convert the bank deposits”, back into cash – “obviating the purpose” of the notebandi (Rs 100 is assumed,as the wages are paid in that denomination

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