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 – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.
Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.
Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”
The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.
Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.
“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”
Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.
Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.
Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.
B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.
The election is expected to be called on Sept. 21, with the vote set for Oct. 19.
“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”
Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.
Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.
The premier said that now is not the time to reduce supports and services for people.
Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.
Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.
This report by The Canadian Press was first published Sept. 10, 2024.
Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.
NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.
But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.
He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.
Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.
Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.
Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.
This report by The Canadian Press was first published Sept. 10, 2024.
