Unemployment rate increases in October, driven by drop in rural employment

by ~ Trinanjan Chakraborty

The unemployment rate in the country went up to 6.98% in October from 6.67% in the previous month, data released by the independent thinktank Center for Monitoring Indian Economy (CMIE) has shown. The increase in unemployment in Oct’20 was led by rural – with the rural unemployment increasing sharply to 6.90% from 5.86% in Sep’20. The urban unemployment though declined from 8.45% in the preceding month to 7.15% in Oct’20.

With the lockdown induced by the Covid-19 pandemic in full effect in April and May, the unemployment rate had shot up to unprecedented levels. But with the gradual easing of restrictions, the unemployment has come down in the subsequent months and in the last two months, has been below the level of March (pre-lockdown).

Among the large states, the unemployment rate in Oct’20 was worryingly high in Rajasthan (24.1%) and Haryana (27.3%). Some of the other large states with unemployment rate above the all India levels were: West Bengal (10.0%), Bihar (9.8%) and Jharkhand (11.8%), besides the UT of J&K (16.1%). The rate of unemployment was well below the national average in most of the southern states: Karnataka (1.6%), Tamil Nadu (2.2%), Telangana (2.9%), Kerala (3.9%) with Andhra Pradesh at 6.6%. The unemployment rate was also comparatively lower in the bigger states of UP (3.8%), MP (3.1%) and Maharashtra (4.1%). Among the smaller states, Tripura (11.6%), Goa (11.5%) and Himachal Pradesh (13.5%) had high unemployment in October.

NB: All data quoted in this article is from Unemployment Report for October’20 released by CMIE.

GST collections top Rs. 1 lakh crore mark in Oct’20

~ by Trinanjan Chakraborty

The GST collections in October’20 crossed Rs. 1 lakh crore mark – the highest in the current fiscal – indicating a sign of recovery in economic activities as per officials of the Department of Revenue. It is also the first time that the GST collections have crossed the 1 lakh crore mark since Feb’20, i.e. touching pre-Covid levels. The figure is also 10% higher than the collections in corresponding period last year, which stood at Rs 95, 379 crores. Revenues from import of goods was 9% higher while the same from domestic transactions (including import of services) was 11% higher as compared to Oct’19.

In the months of July, August & September, the GST collections had shown a negative growth of -14%, -8% and -5% vis-à-vis corresponding periods a year back. The GST collection amount had shown a growth trajectory in September as well, in line with greater relaxation on economic activities.

The gross GST collection in October comprised of: CGST – Rs. 19, 193 crore, SGST – Rs. 25, 411 crore, IGST – Rs. 52, 540 crore and Cess – Rs. 8011 crore. The total revenue earned by central and state governments after regular settlement in the month of October is Rs. 44, 285 crore (central) and Rs. 44, 839 crore (states).

With the festive season ongoing in the country, it is expected that the positive trajectory in GST collections will continue in November as well. Experts are cautiously optimistic, indicating that lasting of the growth pattern beyond November (when the traditional festive season ends) will give a definite answer to the question of economic recovery.

Kerala the best governed ‘big’ state, UP at the bottom – PAI 2020 reveals

~ by Trinanjan Chakraborty

The 2020 Public Affairs Index (PAI), released by the Bangalore based Public Affairs Center showed that Kerala was ranked at no 1 among large states in terms of governance performance for the period 2019-20. Kerala had an index score of 1.388 and was followed by its 3 southern neighbors, Tamil Nadu (0.912), Andhra Pradesh (0.531) and Karnataka (0.468) in the rankings for big states. This is the 4th year in a row that Kerala has finished top of the PAI standings. Uttar Pradesh, India’s most populous state, was ranked bottom among large states with an index score of -1.461. Odisha (-1.201) and Bihar (-1.158) rounded off the bottom 3.

Among small states, Goa was ranked first with an index score of 1.745 points, followed by Meghalaya (0.797) and Himachal Pradesh (0.725). The worst performing small states were: Manipur (-0.363), Delhi (-0.289) and Uttarakhand (-0.277). Chandigarh (1.05) was rated the best performing union territory, followed by Puducherry (0.52) and Lakshwadeep (0.003). The bottom 3 UTs were: Dadra & Nagar Haveli (-0.69), Jammu & Kashmir (-0.50) and Andaman & Nicobar Islands (-0.30). The full rankings are given below:

The Public Affairs Index (PAI) is a unique statistical tool developed to measure governance performance in the context of sustainable development, defined on the 3 pillars of equity, growth and sustainability. The index is released by the Public Affairs Centre, a non-profit thinktank headed by the former ISRO chief K. Kasturirangan.

India ranked 94th out of 107 countries on Global Hunger Index 2020

~ by Trinanjan Chakraborty

With a score of 27.3, India was ranked 94th out of 107 nations in the 2020 Global Hunger Index (GHI). Only 3 Asian countries were ranked below India – these were Korea DPR (96), Afghanistan (99) and Timor-Leste (106). As per the segment definitions, India’s index score of 27.3 put it in the SERIOUS bracket. The GHI subdivides the countries into 6 brackets with index score of less than/equal to 9 being classified as “low” and score of greater than/equal to 50 classified as “extremely alarming.” This year, there were no countries in extremely alarming while 3 – Madagascar, Timor-Leste and Chad were classified as “alarming.”

The Global Hunger Index (GHI) is a tool designed to comprehensively measure and track hunger at global, regional, and national levels. GHI scores are calculated each year to assess progress and setbacks in combating hunger. The GHI is designed to raise awareness and understanding of the struggle against hunger, provide a way to compare levels of hunger between countries and regions, and call attention to those areas of the world where hunger levels are highest and where the need for additional efforts to eliminate hunger is greatest. The GHI scores are calculated basis four dimensions:

  • Undernourishment i.e. the share of the population that is undernourished (insufficient calorie intake)
  • Child wasting i.e. the share of children under the age of five who are wasted (low weight proportional to height)
  • Child stunting i.e. the share of children under the age of five who are stunted (low height proportional to age)
  • Child mortality i.e. the mortality rate of children under the age of five

India is ranked in the last spot (107) on the dimension of “child wasting” i.e. proportion of children with weights lower than expected w.r.t height. According to GHI 2020, 17.3% of Indian children under the age of 5 had weight lower as compared to their height. This value was 15.1% in 2012 and has gone up in recent years. India’s numbers on the other dimensions were:

  • Undernourishment: 14.0%
  • Child stunting: 34.7%
  • Under-five mortality rate: 3.7%

On these 3 dimensions, the proportions have been declining steadily but the stunting rate is still alarmingly high. A comparison with Brazil, China and Russia also reveals the long way ahead for India in the battle on hunger.

 BrazilChinaRussia
GHI score<5<55.2
Undernourishment (%)<2.5<2.5<2.5
Child wasting (%)1.82.03.5
Child stunting (%)7.25.59.5
Child mortality (%)1.40.90.7

Many experts have feared that the Covid-19 pandemic could further worsen the hunger scenario in most developing countries. They have also warned that hunger and poverty resulting from covid-10 could lead to a higher death count than directly caused by the pandemic. A new analysis by researchers from King’s College London and Australian National University, under the aegis of the United Nations University World Institute for Development Economics Research, for example, warns that the economic contraction caused by Covid-19 could push an additional  500 million people — roughly 8 percent of the Earth’s population — into poverty, reversing 30 years of economic improvement.

NB: The Global Hunger Index sources data from UNICEF and other UN agencies.

Dismal progress of Pradhan Mantri Grameen Awaas Yojana in current fiscal

~ by Trinanjan Chakraborty

The Pradhan Mantri Grameen Awaas Yojana (PMAY-G) – the government’s flagship scheme to provide pucca housing in rural areas – has been making shockingly low progress in in the current financial year. Against a target of 61.50 lakh houses to be constructed in FY 20-21, only 13, 268 structures (~0.2%) have been completed as of date – leaving a shortfall of 99.8% to be completed by end of March of next year. The other stats pertaining to the current FY performance are as below:

  • Total beneficiaries registered – 32.4% (of target)
  • Total geo-tagged – 27.7% (of target)
  • Total houses sanctioned – 26.6% (of target)

A look at the state level performance reveals that the poor performance spreads across the states. Among the 15 states with highest rural population, Rajasthan with 1.5% of target houses completed is the best performer. Rajasthan also accounts for 49% of all houses completed under the scheme in the current fiscal.

In majority of these states, not a single house has been completed. Uttar Pradesh, India’s most populous state and home to more 155 million people in its rural areas (census 2011), has only 33 beneficiaries registered in the current fiscal with not a single house sanctioned. Bihar, the next most populous (92.3 mln rural popn) has sanctioned 13.8% and completed 0.003% of its target houses. The situation is no better in the smaller states.

While it is true that the covid-19 induced lockdown has adversely affected the implementation of the scheme (especially house construction), yet since June, the economy has been gradually reopening to economic activities and such poor on-ground performance across the table is difficult to accept or justify. Moreover, while construction/completion delays are explainable somewhat due to lockdown, even sanctioning of houses is way off with several states registering a zero there as well.

Also, the slowdown in progress is not a recent phenomenon. The % of target house completion stood at just 43% in FY 19-20, as compared to 90% in the phase I of the project (FY 16-17 to FY 18-19). Overall, houses completed stands at approx. 47% of target with 3/4th of the budgeted time elapsed. The PMAY-G target is to build more than 2.47 crore pucca houses in rural India by end-of-March, 2022.

* All figures used for this report have been sourced from the official website of the Ministry of Rural Development, GoI

Spike in crimes against SC/ST continues in 2019, official data shows

~ by Trinanjan Chakraborty

National Crime Records Bureau (NCRB)’s ‘Crime in India 2019’ report shows an alarming increase in crimes recorded against Scheduled Castes (SC) and Scheduled Tribes (ST) in 2019. During the year, 45, 935 cases of crime against SCs were registered across the country – up 7.3% from the previous year. In the same period, 8257 crimes against STs was recorded – a jump of 26.5% as compared to 2018. The trend reaffirms the steady increase in crimes against the SC/ST communities in recent years.

Crimes against SC/ST – 2019 vs 2015

With 11, 829 cases, Uttar Pradesh was no. 1 among the states regarding crimes against SCs – representing almost 26% of the country-wide total. It was followed by Rajasthan (6794) and Bihar (6544). ~8% of total crimes against SCs were in the nature of rapes – 3486 cases, an increase of 7.6% over 2018. Among the states, Rajasthan was on top with 554 cases of rape against SC women, followed by Uttar Pradesh (537) and Madhya Pradesh (510).

With respect to crimes against STs, highest no. of such cases were recorded in Madhya Pradesh at 1922, followed by Rajasthan (1797) and Odisha (576). Together, Madhya Pradesh & Rajasthan accounted for 45% of all crimes against STs in 2019. Madhya Pradesh also led in terms of recorded rape cases of ST women with 358 such registered cases. It was followed by Chhattisgarh (180) and Maharashtra (114). 24.1% of all crimes against STs pertained to rape (1110 cases) or assault on women with the intent to outrage modesty (880 cases). 

7% increase in crimes against women in 2019, NCRB report reveals

~ by Trinanjan Chakraborty

Crimes against women in the country have increased by 7.3% in 2019 over the previous year, according to the annual National Crime Record Bureau’s “Crime in India” 2019 report released yesterday. Total count of recorded crimes against women stood at 3, 78, 236 in 2018 which has gone up to 4, 05, 861 in the current year.

Chart: Crimes against women in India – last 3 years

India’s most populous state, Uttar Pradesh, also accounts for maximum no. of recorded crimes against women in 2019 – 59, 853 cases or 14.7% of the national total. It is followed by Rajasthan – 41, 550 cases (10.2% of national total) and Maharashtra – 37, 144 cases (9.2% of national total). However, in terms of rate of crime against women (per lakh of population), Assam tops at 177.8, followed by Delhi NCT at 144.0. At an all India level, the rate of crime against women (per lakh of population) went up to 62.4 in 2019 from 58.8 in 2018.

During 2019, there were 32, 033 recorded incidences of rape crime against women – amounting to 32, 260 victims. 15.4% victims were children/girls below the age of 18. Maximum no. of recorded rapes were in Rajasthan (5997 incidences / 6051 victims). Rajasthan had 15.9 cases of rape per lakh population – highest among all the states (only the UT of Chandigarh had a higher rate of rape cases at 20.7 per lakh population).

The number of offences registered under Protection of Children from Sexual Offences Act (POSCO) against girl children during the year was 46, 005 with 46, 682 victims. Uttar Pradesh had the maximum cases under POSCO – at 7444, followed by Maharashtra (6402) and Madhya Pradesh (6053). Among the large states, the rate per lakh population was highest in MP (15.1) followed by Haryana (14.6) and Chhattisgarh (14.1). Among all states, the rate per lakh population was highest in Sikkim at 27.1. The all India rate for cases registered under POSCO (girl child only) was 7.1 per lakh population.

Among large cities, Delhi had the highest no. of crimes recorded against women during 2019 – 12, 902 cases which was 28.4% of the total of 19 large metropolises. Mumbai followed with 6519 cases (14.3% of total). Among the top metros, Chennai had the least no. of cases – 729 for a rate per lakh population of 16.9. Among these 19 cities, Jaipur had the highest rate of crime against women at 235 per lakh population.

Crimes against women in 2019: Top 10 cities of India (by popn.)

Disclaimer: All data reported in this article are sourced from National Crime Records Bureau (NCRB) Crimes against Women reports. Any nos. pertaining to West Bengal/Kolkata pertain to 2018 due to non-availability of 2019 numbers.

CAG report accuses GoI of violation of GST compensation law

By: Trinanjan Chakraborty

In the background of the debate and dispute between the center and several state governments over the GST due payment to the latter, a report on the accounts of the central government for 2018-’19, tabled in both Houses of Parliament on Wednesday by the Comptroller & Auditor General (CAG) of India has said that the union government was itself in violation of law by retaining Rs 47,272 crore of GST compensation cess in the Consolidated Fund of India (CFI) during 2017-18 and 2018-19, and used the money for other purposes, which “led to overstatement of revenue receipts and understatement of fiscal deficit for the year.”

The honorable Finance Minister had told Parliament last week that law forbids compensating of states for loss of GST from the CFI. However, now the CAG report reveals that the central government itself is in violation of the GST Compensation Cess Act, 2017. As per the provisions of the GST Compensation Cess Act, the entire cess collected during a year is required to be credited to a non-lapsable fund (GST compensation cess fund) which is part of the Public Account, and is meant to be used specifically to compensate states for loss of revenue. The Act guarantees all states an annual growth rate of 14% in their GST revenue during the period July 2017-June 2022. It was introduced as relief for states for the loss of revenues arising from the implementation of GST. If a state’s revenue grows slower than 14%, it is supposed to be compensated by the Centre using the funds specifically collected as compensation cess. To provide these grants, the Centre levies a GST compensation cess on certain luxury goods.

However, the CAG Audit found that instead of transferring the entire GST amount to GST Compensation Fund, the Center retained a portion in the CFI and used it for other purposes. The report states that during 2018-19, there was provision of Rs 90, 000 crore for transfer to the GST Compensation Fund and an equal amount was budgeted for release to the states. However, though actual collection was Rs 95,081 crore as GST Compensation Cess, only Rs 54, 275 crore out of this collection was transferred to the states. The CAG report further states that the Ministry of Finance has accepted the observations in the report and has stated that it will transfer the proceeds of “Cess collected and not transferred to Public Account” in subsequent year.

The CAG report also called out violation of accounting procedure in the GST compensation cess. As per the approved accounting procedure, GST compensation cess needs to be transferred to the Public Account by debit to ‘Major Head 2047-Other fiscal services.’ But in practice, it was done to Major Head ‘3601-Transfer of Grants in aid to States.’ According to the CAG audit, this is ”wrongful” since GST compensation cess is a right for the states and not a ‘grant in aid.’ The report recommends the Finance Ministry to correct this violation with immediate effect.

Report on Key Economic Parameters of India: July-August 2020

Anindya Sengupta

India has been under lock down due to the COVID -19 pandemic since March, 25th, 2020. The lock down has been stringent for the first months with the first set of relaxations announced from April 21st, 2020. This lock down is expected to have severe impact on the economy. From May there has been gradual relaxations.

The Ministry of Statistics and Programme Implementation (MOSPI) , Government of India announced the IIP growth numbers and the Core sector growth figures for July on September, 10th and August, 31st respectively. Reserve Bank of India (RBI) has announced the sectoral credit growth numbers for June on August ,31st. Centre for Monitoring Indian Economy (CMIE) is publishing the unemployment numbers in regular intervals. Let us examine how the Indian economy has been impacted by this lock down.

IIP and Core Sector Growth

Source: Ministry of Statistics and Programme Implementation (MOSPI), Government of India

Both the IIP and the Core sector witnessed negative growth in the month of July. However the extent of negative growth has seen a continuous decline for the last four months. However as compared to July, last year, both the IIP and core sector growth has been significantly lower. So while the economy has seen more activity in July compared to previous three months, it is still far away from normal and still sees a significant negative growth in the month of July also.

It needs to be noted here that in view of the preventive measures and announcement of nation-wide lockdown by the Government to contain spread of COVID-19 pandemic, majority of the industrial sector establishments were not operating from the end of March, 2020 onwards. Moreover the estimated of July 2020 are quick estimates and may be subject to change in subsequent months.

Source: Ministry of Statistics and Programme Implementation (MOSPI), Government of India

The growth of all the sectors showed some improvement with respect to the previous three months but continued to show a decline as compared to last year same month. Manufacturing sector, which is one of the most people intensive sectors showed some improvement as compared to the previous three months. However this remains much lower than the growth numbers in the same month last year. It needs to be noted here that manufacturing sector contributed to almost 80% of the total IIP.

Similar pattern is witnessed in terms of Core sector growth. Steel industry has witnessed the severest burnt in the stringent lock down month. Apart from the fertilizers sector, all other sector continued to show negative growth in June. It should we be noted that compared to the growth rate of April amd May, all sectors apart from cement and refinery saw an improvement in growth rate in June. The COVID -19 pandemic has very less impact on rural India and hence agricultural activity continued to function since April, 21st. Given this there has been a need of fertilizer leading to higher production and hence positive growth in that sector. All other sector did not witness such stream of demand and hence continued to show a decline in growth.

Source: Ministry of Statistics and Programme Implementation (MOSPI), Government of India

CREDIT GROWTH

In order to combat the impact on economy due the pandemic induced lock down, the Government of India and the Reserve Bank of India announced an economic package. A sizable section of the economic package announced by the government and the central bank is targeted to provide more liquidity and credit in the economy. The first set of such policies was announced by RBI in March 28th and then again around mid April. Government of India announced such measures in mid May. Many economists believe that with lack in demand in the economy, there might not be a higher credit off take even after those measures. Let us examine what has been the scenario in terms of credit growth.

Source: Reserve Bank of India

The sectoral credit growth rate showed either a marginal decline or remained same in the month of July, 2020 as compared to the growth rate of June, 2020 for almost all the sectors. Agriculture and Allied sector and personal loan sector witnessed a increase compared to the previous months However when compared to July, 19 then all sectors witnessed a severe decline in credit growth. The decline has been severe for personal loan segment. However this month shows a positive trend. The personal loan growth is a reflection of demand in the economy and a decline in this reflects lack of demand in the economy. However within the retail loan sector, there has been a surge in auto loan. There has been a considerable decline in all other type of retail loans.

As we see a decline in credit growth of industry sector from the previous three months, let us examine what is driving this. A host of credit measures were taken focusing on the small and medium enterprises. It needs to be noted here that both the micro and medium industrial sector which actually is a source of employment for vast majority witnessed a decline in credit growth. Only the large industrial segment witnessed a positive growth.

Source: Reserve Bank of India

The credit growth for micro, small and medium sized industry segment continued to show a negative growth in July, like the previous three months. The decline in credit growth for small, micro and medium sized industry segment has been less severe in July as compared to the previous months. The large industries show a lower increase in the month of July as compared to the previous four months. So the small, micro and medium industry sector which is one of the most people intensive sectors does not show a credit uptake at least till July and the large industries are also showing a lower uptake. During mid of May, a host of credit schemes targeting this sector has been announced by the government. However, there is no significant impact of the measures at least till June. It remains to be seen how it impacts in the coming months.

Car and Two Wheeler Sales

Source: http://www.rushlane.com

The credit growth numbers showed that the vehicle loans growth has been more than the same month in the previous year and is the only type of retail loan which is seeing a increase in growth. This is reflected in the car sales and two wheeler sales numbers. Month of August has seen a significant growth in both car and two wheeler sales as compared to the previous month. This is a reflection of the fact that there has been significant surge in economic activity after unlock 1 starting from June, 1st. The sales numbers has been more than the numbers achieved in August, 19. So automobile sales shows signs of recovery. It needs to be noted here that both the car sales and two wheeler sales declined in previous financial year as compared to the earlier years.

Unemployment

The IIP figures and the credit growth numbers suggest slump in the manufacturing sector and small and micro enterprises. Both these sectors are people intensive sectors and can have severe impact on unemployment levels. However agriculture sector has been functioning. Moreover additional budget has been allocated to MGNREGA for ensuring more employment, Let us see what has been the impact of unemployment trends.

Source: CMIE

The unemployment rates had seen a record increase in the month of April and May. However with the unlock 1 starting from June, 1st, there has been a significant decline in unemployment rate in the month of June, 2020. It further declined in July. However this showed some increase in August, compared to July. The unemployment rate is comparable to what was there one year back. The unemployment rate in urban India is more than that in rural India.

It needs to be noted here that the unemployment levels in the pre-corona level has itself been in the higher side. The overall unemployment rate which stood at 2.3% in 2011-12 showed a record increase to 6.1% in 2017-18, highest in 45 years. This showed a marginal decline to 5.8% in 2018-19. So overall the unemployment rate which has been in a higher side sees a further growth given this pandemic.

Literacy rate in India touches 77.7% – Kerala tops, Andhra at the bottom

~ Trinanjan Chakraborty

The 75th round of the National Statistical Survey conducted by the National Statistical Office revels that literacy among individuals aged 7 & above stood at 77.7% for the time period July 2017 – June 2018. The 2011 population census had reported all India literacy rate at 74.04%. The NSS 75th round revealed that while urban literacy was 87.7%, rural literacy stood at 73.5%. Gender-wise, a big disparity exists with literacy among males (7 years & above) being 84.7% while the same among females standing at 70.3%. In rural areas 46.1% of males and 40.7% of females in the 3 – 35 years age-group were currently attending an educational institution. The same figures for urban areas was 46.7% (M) and 42.6% (F).

Completed educational levels in Urban and Rural among individuals aged 15 & above:

(Total >100.0% due to decimal approximation)

However, a big disparity exists across states in terms of literacy.

State wise literacy rate among 7 years and above (figs in %) – for large states
(excluding N/E and UTs except NCT of Delhi)

While Kerala is at no 1 on both male and female literacy with only 3.8% of population aged 7 years & above reported as “Illiterate”, Andhra Pradesh at the other extreme, has nearly 2/3rd of its population of the same age group as “Illiterate.” While male literacy is lowest in Andhra among all states (73.4%), in female literacy, Rajasthan is at the bottom (only 57.6% literate). In what would be a cause of concern, the literacy rate is well below the national average in some of India’s largest and most populous states like Andhra, Rajasthan, Bihar, Telangana and UP (the bottom 5) with Madhya Pradesh at 6th from bottom.

Top 5 states in terms of highest completed education as “Graduate & above” among 15 years or above population:

Delhi – 24.7% | Uttarakhand – 18.7% | Telangana – 15.8% | Kerala – 14.9% | Haryana – 14.8%

Bottom 5 states in terms of highest completed education as “Graduate & above” among 15 years or above population:

Jharkhand – 5.3% | Bihar – 6.0% | Assam – 6.2% | Odisha – 7.0% | Chhattisgarh – 7.2%

COMPUTER OWNERSHIP & INTERNET FACILITY:

At an all India level, 10.7% households (U+R) owned a personal computer while 23.8% had access to internet facility during the survey year, according to the survey results. Computer ownership and internet facility was 23.4% and 42.0% respectively in urban while the same stood at 4.4% and 14.9% in rural households. Among the states, Delhi topped the charts on both – with 34.9% computer ownership and 55.7% internet facility while Odisha was at the bottom on both – just 4.3% computer ownership and 10.0% internet facility.

All India, 16.5% in the age group of 5 years and above claimed to be proficient in handling a computer – 32.4% in Urban and 9.9% in Rural.