MUMBAI: The Indian government will release its 2020 budget on Saturday, facing stuttering growth and record unemployment and a jump in inflation that has further widened India´s wealth gap.
A botched nationwide tax rollout, the 2016 shock cash ban, and a sharp liquidity crunch in the vast shadow banking sector all played their part in creating the crisis that roils Asia´s third-largest economy.
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The foreign news agency spoke to Indians from different sections of society about the impact of the economic slowdown, which has put Prime Minister Narendra Modi under considerable pressure.
Unemployed millennial
An engineering degree from a prominent university followed by a job that paid 42,000 rupees ($590) a month: Rahul thought he was set for life. But when the slowdown struck and companies laid off thousands, Rahul — whose name has been changed at his request — lost his job and has been struggling to land another. “I am constantly sending my resume hoping to get an interview call but companies barely respond. The situation is depressing,” he said.
The 27-year-old told that he now relies on his father´s savings and pensions to keep their household running.
Drowning in debt
At 50, Saroj Ahire was forced to take two jobs and work through the night to earn 15,000 rupees a month, simply to keep her head above water. But the increase in income is no match for inflation, she said.
“By the 25th of every month, I run out of cash and have to buy rice on loan from local shopkeepers,” the domestic worker said. With rising prices prompting her to think twice about what she eats — onions are now a luxury rather than a staple — planning for the future is impossible. Working for wealthy households only makes her feel worse, said Ahire, who shares a cramped one-room shanty with four family members. “Watching them enjoy good food while I clean their homes… it causes a bit of heartburn for sure,” she said. “We also want to live a good life and eat well.”
What about the wealthy
Not everyone is faring poorly. India´s stock markets have been hitting record highs, bringing cheer to investors with enough cash to plough into equities.
A report by the charity Oxfam published last week said the wealth of India´s top one percent increased by a staggering 46 percent over the past year.
“Select stocks have done very well and since rich people have higher allocation of their wealth in equities they would have gotten richer,” said, R. Venkataraman, managing director of financial services firm IIFL Securities. “Otherwise it is very difficult to give a figure of 46 percent increase in wealth in an economy like this.”
Reliance Industries, helmed by Asia´s richest man Mukesh Ambani, became India´s most valuable company with a market capitalisation of more than 10 trillion rupees in 2019.
´Just too scary´
As the “feel-good factor” evaporates for everyone in India except the super-rich, consumers are cautious about spending on non-essential goods. Shopkeeper Aslam Malkani, whose Mumbai store stocks smartphone accessories, said sales had plunged more than 80 percent over the past eight months.
“We open the shop and wait but there are no customers,” the 36-year-old said. “I have been working since I turned 16 and have never seen this extent of slowdown. It´s just too scary.”
´Hope is dimming´
For some, the slowdown has made already difficult lives even more precarious. Every morning, Munna Singh joins hundreds of migrant workers waiting at a crowded Mumbai junction, all hoping to be picked up for a job — from masonry to construction to cleaning sewage pipes.
Singh, 45, left his village in northern India six months ago, desperate to earn a living. “Every day, from 6 am to noon, we wait for some work but hope is dimming,” he said, adding that he sometimes goes two or three days without a meal.
“Where are the jobs?”
