Economic News in India

27 March 2020 India is in a 21-day lockdown period, spelling doom for many of the workers in unorganised sectors of the country. The unorganised sector forms around 83% of the labour force in India. As they rely on the regular supply of work to earn enough money to subsist, 21 days of nationwide lockdown means that they have no job or any means of finding one. Thus the government has released a 1.7 lakh crore relief package to mitigate the effects on the vulnerable sectors of society.

However, many experts are critical of the relief package. While the package does succeed in putting money in the hands of the poor, some say that a majority of the schemes are only benefiting a narrow sliver of the population.  In the package, 800 million people will be offered free cereals and cooking gas, as well as direct cash transfers. The package also includes free medical insurance for medical personnel fighting on the frontline to treat the vulnerable and affected. Learn more about living and working during the Covid-19 pandemic

27 March 2020  -  With the number of positive cases for Covid-19 (novel coronavirus) breaching the 800 mark, India has shut down its national borders for 21 days effective from March 25 to April 14. Many businesses have been shut down temporarily during this period, to contain the spread of the pandemic. One of the most affected groups are the daily wage workers, as well as the informal economy of the self-employed, and contractual workers.

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA), which gives daily wage workers 100 days of employment every year, has also come to a standstill. These workers of the informal economy are facing a dire situation, with employment opportunities going down countrywide, as well as government-guaranteed work also coming to a stasis. There are 26.6 crore workers employed in the MGNREGA scheme, and to mitigate the effect of a countrywide lockdown on these workers some states have allocated funds to pay these workers. However many others have not taken the required steps yet to address the issues.  Tell us about working during Covid-19!

4 March 2020 OYO, the largest Indian hospitality chain, is planning to reduce its global headcount by approximately 5000 people due to the novel coronavirus (COVID-19), which has affected businesses worldwide - especially in its critical market, China. The firm plans to reduce staff in China, India, and the US. The Indian workforce, comprising around 10,000 people, will see a 12% reduction.  Chinese employees of OYO are facing the brunt of staff reduction. The company plans to fire 6,000 of its direct full-time workers. Out of the 4,000 discretionary workers - those employed in support areas like call centres - a portion will be laid off but will be called back once business improves. At the end of the process, OYO is expected to reduce its global workforce from 30,000 to 25,000 employees. What other jobs can laid-off employees look into?

25 February 2020 -  CPI inflation in India for the month of January 2020 was 7.59%; higher than a rate of 7.35% in December 2019. The January figure is the highest CPI inflation has risen to in six years. A rise in international LPG prices has been thought to be a cause for such an increase in inflation rates. As of October 2019, 96.5% of households in India had an LPG connection, due to the implementation of the Pradhan Mantri Ujjwala Yojana. LPG contributed to 31 base points to headline inflation between October to December 2019. A non-subsidised LPG container cost INR 575 in August 2019. The price for the same was INR 858 in February 2020. The Indian government has been forced to increase subsidies in order to combat inflation. Tell us how much you pay for LPG and other commodities!

18 February 2020 The annual salary hike of Indian firms has been projected to be 9.1% for 2020, the lowest in a decade. The figure was 9.3% in 2019. This figure is in accordance with the state of the Indian economy which is in the midst of an economic slowdown. The Indian economy grew at a rate of 4.5% in the September quarter, which was the lowest in six years. Reports showed that employee attrition rates increased from 15.8% in 2018 to 16.1% in 2019. The top paying sectors this year are expected to be startups, professional services, and e-commerce platforms with an average hike of 10%, pharmaceutical companies with a pay hike of 9.9% and IT companies with a pay hike of 9.6%. What is your salary in comparison to others in the same occupation?

3 February 2020 - India’s Finance Minister, Nirmala Seetharaman, proposed new tax slabs of 15% and 25% in the 2020-21 budget. These new slabs would be beneficial for those who are not availing specific deductions or exemptions. According to the new brackets, an individual with an annual income of INR 13 lakhs would pay INR1.43 lakhs as income tax, while they would have paid INR 1.48 lakh under the old regime, saving INR 5,200. Those earning INR 14 lakh annually would save approximately INR 10,400 on income tax while those earning INR 15 lakhs would save up to INR 15,600. Under the proposed tax regime, those earning an annual income of below INR 2.5 lakh would be exempt from tax. Those earning between INR 2.5 lakh to INR 5 lakh will be taxed at 5%. People earning between INR 5 lakh and INR 7.5 lakh will be taxed at 10%. Those earning INR 7.5 lakh to INR 10 lakh would come under the 15% tax bracket and those earning between  INR 12.5 lakh to INR 15 lakh would be taxed under the 25% bracket. Those earning over INR 15 lakh annually will be taxed at 30%.  Learn more about work and law in India

29 January 2020 - The Indian government is expected to increase expenditure on infrastructure and cut personal taxes in the 2020-21 budget. This is expected to increase consumer demand and investment to combat the economic slowdown being faced by the country. The growth of the Indian economy dropped to 4.5% in the July-September quarter of 2019. This has worsened job prospects for those who newly entered the job market. Increasing the expenditure on roads, railways and rural welfare along with fiscal stimulus for the budget could help boost growth. Earlier in January, the International Monetary Fund cut its forecast for Indian growth to 4.8%. It also reduced its forecast Indian growth rate to 5.8%. Take our Cost of Living survey

22 January 2020 According to a report by the World Economic Forum (WEF), 76% of workers in India are vulnerable in employment. It is the country with the second-highest level of workers in vulnerable employment; Saudi Arabia claims the first spot. The report emphasizes the need for India to provide fair wages and social protection to improve their standing. India spends 2.68% of its GDP on social protection coverage, which is lower than its regional peers. Furthermore, the report states that the most vulnerable employees - those who are self-employed or work in the informal sector - are excluded from social protection. This, along with the lack of fair wages, has had a detrimental effect on the social mobility of the country’s population. To combat this, the report suggests payment of fair wages, provision of social protection and reducing the gender wage gap to improve their standing. Learn more about the Gender Wage Gap

13 January 2020The rate of consumer inflation in India increased to 7.35% in December 2019, much higher than the Reserve Bank of India’s medium-term target of 4%. This rate of consumer inflation is the highest since July 2014. It has been attributed to the rising cost of food. Food inflation rose from 10.01% in November 2019 to 14.12% in December 2019. While the prices of fruits and vegetables are expected to fall thanks to their short cultivation cycles, it is expected that the prices of other foods, such as pulses, will continue to remain high for longer.  How much does food cost in your locality?

8 January 2020 - The central government of India has increased the amount of wages that need to be considered for the calculation of compensation to be given to employees under the Employees Compensation Act 1923. The Act, which provides compensation to workers who die or suffer injuries in the workplace, has increased the wages to be considered from INR 8,000 to INR 15,000. According to the Act, an employer is liable to pay their employee if they suffer any injury that causes death or partial or complete disability. However, the employer is not liable to pay the employee if the injury does not cause total or partial disability for more than three days, if the accident happened while the employee was under the influence of alcohol or drugs, or if the employee willfully ignored safety protocol. Learn more about Health and Safety Laws

17 December 2019 - According to the Code on Wages, 2019, an employee must receive their due payment from their employer two days after the end of their job. This includes their full salary and any allowances they are entitled to. This is applicable irrespective of whether the employee was dismissed by their employer or whether they chose to leave themselves.  The Payment of Wages Act, 1936, the predecessor to the Code of Wages, 2019, did not specify the time by which all employees had to receive their payment. Due to this reason, companies had their own timelines. Furthermore, the Act also only specified the timeline for employees whose earning wages did not exceed Rs. 24,000. The Code on Wages, 2019 will include a wider class of employees and will have strict penalties for those who do not comply with the two-day time period. Although the Code has been passed by the Parliament, it is yet to receive a date for implementation.  Learn more about India’s work and wages laws.

10 December 2019 - India has witnessed an increase in the retail price of essential goods since January 2019. The prices of onions have increased four times over the past year. The prices of pulses, potatoes, rice and wheat have also increased significantly. This rise in cost has been attributed to poor weather conditions and a mismatch in demand and supply of the goods. The government has a list of 22 essential goods whose prices they monitor. The prices of 20 of those goods has increased significantly since the start of 2019. The Consumer Supplies and Consumer Affairs ministers at the state as well as central level have been asked to review the prices of these goods with dealers on a regular basis to help regulate prices. How much do these essential goods cost in your area?