NEW DELHI —
Millions of distressed Indian manufacturers and traders are counting on the eagerly-awaited October-December festive season to rescue them from their coronavirus catastrophe.
But spending may be the last thing on the minds of many Indians who have lost their jobs or businesses in the pandemic downturn, and pressure is building for Prime Minister Narendra Modi to do more to regain the momentum of growth that, at 8.2 per cent in 2016-17, made India one of the fastest growing major economies.
The Hindu Dussehra, Diwali and Durga Puja celebrations that extend through the Christmas and New Year holidays are an occasion to splurge on big ticket items like gold, homes and cars as well as clothing, smartphones and electronics.
This year will likely lack the customary pomp and show, given the need for masks and social distancing with the pandemic still raging and no vaccine yet available.
The government began easing a stringent two-month-long lockdown in June, but business still is only a quarter to a fifth of usual and customers are scarce, said Praveen Khandelwal, general secretary of the Confederation of All India Traders.
In August, Prime Minister Narendra Modi announced US$1.46 trillion in infrastructure projects to boost the sagging economy and allocated $2 billion to upgrading the country’s overwhelmed health system.
That followed a 1.7 trillion rupees ($22 billion) economic stimulus package announced in March, including delivering rations of grain and lentils for 800 million people, some 60 per cent of the world’s second-most populous country.
Other subsidies included a meagre cash grant of 6,000 rupees ($80) a year each for 86 million poor farmers and free cooking gas cylinders for 83 million poor women until the end of September.
The economy still contracted an unprecedented 24 per cent in the April-June quarter, with another downturn forecast for July-September.
The government needs to do more, said Nobel laureate Abhijit Banerjee, such as direct cash transfers for the poor and others severely affected by the prolonged lockdown. India’s pandemic assistance has amounted to only about 1 per cent of its GDP, he said, compared with the U.S.’s package in March of about 10 per cent of its GDP.
The crisis is far from over: India’s coronavirus caseload jumped from 1 million in mid-July to 6.3 million in less than three months and the number of fatalities is approaching 100,000.
Modi’s administration is hard strapped to push out more stimulus, however, given the financial demands of dealing with the pandemic on top of military tensions with China along a disputed border in the mountainous Ladakh region, where both sides have amassed tens of thousands of troops.
Defence analysts estimate India may need up to 1 billion rupees ($13 million a day to run its military machine at an altitude of 16,000 feet (4,875 metres) if the two countries fail to defuse their months-long faceoff.
The lockdown imposed in late March cost more than 10 million impoverished migrant workers their jobs in the cities. Many made grueling journeys back to their hometowns and villages. Now they face the ordeal of trying to get back to their factory jobs.
“There is almost no work,” said Ram Ratan, 46, who was working in a printing company before he returned to his home village in April. “We keep roaming around, looking for some steady work, but most factories don’t let us in.”
Mansoor Ansari is among hundreds of workers who wait every day on what is called a “labour roundabout,” in an industrial area, hoping to get picked up by employers.
Before the pandemic lockdown, Ansari had a steady job at a garment factory in the industrial town of Manesar near New Delhi, earning $200 a month, he said. He was able to pay rent and send money to his wife and five children in a village in eastern Bihar state.
As Ansari’s factory shut down, he joined a caravan of workers who walked several miles before jumping on to overcrowded flatbed trucks to get home.
Unable to find work there, and digging himself deeper into debt, after restrictions were lifted Ansari joined the legions of workers returning to Manesar.
Deshraj, who uses one name, lost his job as a waiter at a roadside eatery in Surat, a city in western India known for diamond cutting and polishing, in the spring and resumed farming in his home village. But unusually heavy rains in April damaged the crop.
“This is a common story in villages where crops have been destroyed by unseasonal rains, leading people to commit suicide,” said Raja Bhaiya, who runs a non-governmental organization to help farmers.
Compared to the scale of need, government relief has been “meagre,” Raghruram Rajan, former governor of the Reserve Bank of India, said in a Linked In post. He likened such help to a tonic.
“When the disease is vanquished, it can help a patient get out of her sickbed faster,” Rajan said. “But if a patient has atrophied, a stimulus will have little effect.”
The government maintains that the worst is behind.
Agriculture overall is growing at a 3.4 per cent pace. With good monsoon rains, India might attain a record of 301 million metric tons of food-grain output, including wheat, rice, oil seeds, lentils and mustard, in the 2020-21 financial year — 4 million metric tons more than in 2019-20.
Key sectors such as coal, oil, gas, steel and cement have ben recovering gradually, said the government’s chief economic advisor, Krishnamurthy Subramanian.
“In a V-shaped recovery, it is possible that the slope (of rise) actually may not always be the same exactly as that of the fall, which is a drastic one,” he said.
One other bright spot: Domestic brands are getting a boost from a trend to boycott inexpensive Chinese-made statues of Hindu deities, festive LED lights and electronics that have flooded the market, in favour of locally made products, said Khandelwal.
For India’s nearly 70 million traders, who employ about 400 million people, an upturn could not come fast enough. They are keeping their finger crossed and trying not to let their hopes get too high as the festive season approaches.
Sanyam Jain, 24, and his brother Ankit Jain, 31, owned three clothing shops in New Delhi and its suburbs, each store averaging more than $25,000 in monthly before the lockdown.
They’ve shut one store and would be happy to sell even half of their inventory this year.
“The government hasn’t given us any relief at all,” said Ankit Jain said.
Sales usually pick up 20-25 per cent during the holidays, said Nitin Makkar, who runs a store in Noida on the outskirts of New Delhi, the capital. “I have no such hopes this time as people may restrict themselves to buying essentials and avoiding luxurious items.”
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AP Writer Biswajeet Banerjee in Lucknow, India, contributed to this report.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
