The International Monetary Fund (IMF) on Tuesday slashed India's growth forecast for 2022-23 (FY23) by 80 basis points to 7.4 per cent, citing less favourable external conditions and rapid policy tightening by the central bank. In its update to the April World Economic Outlook, the IMF said that though a global recession in 2022 was ruled out with a growth estimate of 3.2 per cent, the balance of risks was squarely to the downside, driven by a wide range of factors that could adversely affect the global economic performance. "The risk of recession is particularly prominent in 2023, when in several economies growth is expected to bottom out, household savings accumulated during the pandemic will have declined, and even small shocks could cause economies to stall.
The results of Indian IT services players in the just-concluded fourth quarter of 2021-22 are expected to reveal continuing growth momentum as demand surges on the back of digital transformations and the cloud shift, but analysts anticipate margins to be under pressure due to supply challenges. Analysts covering the sector expect revenue commentary should be strong despite the Russia-Ukraine conflict and inflation. Top-line growth will be driven by broad-based demand with a strong uptick for cloud, digital, cybersecurity, data analytics, and artificial intelligence, among other services.
Two US lawmakers have introduced a bill in the House of Representatives that aims at granting an automatic right to H-4 visa holders to work in the country, a move which will benefit the spouses of thousands of foreigners, including Indians, and also address the labour shortage affecting American businesses. H-4 visas are issued to dependent spouses and children who accompany H-1B, H-2A, H-2B, and H-3 visa holders to the United States. Many H-4 visa holders are highly skilled people in their own right and previously had careers of their own or worked to support their families.
'Re-evaluate your career goals and be ready to embrace challenges. ' 'Work thoroughly on your resume by highlighting the key skills and major areas of work.' 'Check and apply for jobs posted by employers regularly.' 'Stay positive.'
Indian companies are expected to dole out an average increment of 9.1 per cent in 2022, higher than the pre-COVID-19 increment in 2019, as companies are focusing on retention of talent through rewards. According to the 2022 Workforce and Increments Trends Survey by Deloitte Touche Tohmatsu India LLP, the average India 2022 increment is expected to go up to 9.1 per cent from eight per cent in 2021. Moreover, the 2022 projected increment is higher than the pre-COVID-19 increment in 2019 by 50 basis points (bps).
The week ended October 17 was remarkable as it saw a fall in the unemployment rate. We have not seen such a level in any monthly estimate of the employment rate since March 2020, Mahesh Vyas points out.
'The impact of economic shocks on the labour markets is usually on the young who delay their entry in response to a fall in job opportunities,' says Mahesh Vyas.
India's recruitment activity has been recovering steadily as the hiring rate in June 2021 was around 42 per cent above the pre-pandemic levels in 2019, says a report. According to LinkedIn India - Labour Market Update for June 2021, there was a deepening hiring dip in April 2021, corresponding to a second wave of COVID-19 cases in India. Since then, it has been recovering steadily, compared to the pre-COVID levels in 2019. Hiring rate was 35 per cent higher at the end of May 2021, and 42 per cent higher at the end of June 2021.
'By November 2020, men recovered most of their lost jobs, but women were less fortunate: 49 per cent of the job losses by November were of women.' 'The recovery has benefited all, but it benefited women less than it did men,' notes Mahesh Vyas.
'India is not so distant from years of high and entrenched inflationary expectations that it should start trying to play games with the economy the way the West's central bankers think they are entitled to,' argues Mihir S Sharma.
The Trump administration has announced new restrictions on H-1B non-immigrant visa programme which it said is aimed at protecting American workers, restoring integrity and to better guarantee that H-1B petitions are approved only for qualified beneficiaries and petitioners, a move which is likely to affect thousands of Indian IT professionals.
Keeping the employment rate from slipping is challenging. To merely keep the employment rate unchanged, the economy has to generate additional jobs. It needs to run to stay where it is, points out Mahesh Vyas.
If the central banks act harshly now, the markets will crash and then rally. If they are hesitant, the pain will be prolonged, predicts Debashis Basu.
The encouraging news, however, is that India features among the top four countries out of 44 nations that projected a positive hiring trend.
The cumulative loss of salaried jobs since the pandemic is even larger at 12.6 million, reveals Mahesh Vyas.
But, the Wall Street Journal said that the US labour market is operating with millions fewer jobs than in February, the month before the coronavirus pandemic struck the country's economy.
Issues such as the economy's health and the government's ability to produce an environment where jobs are available are not of particular concern to us as voters, asserts Aakar Patel.
Labour reforms have been pending in India for long.
Indian women have education, inspiration and perspiration -- but not enough employment, points out Mahesh Vyas.
'It does not look like unemployment is a priority for the government.' 'If there was one external factor which could have made an impact on low investment and low jobs, it was the Budget and it has not made any difference.' '2020 is going to be a difficult and challenging year.'
India's growth projection released by the latest World Economic Outlook remains unchanged from its previous WEO (World Economic Outlook) update of July this summer but is a three-percentage point in 2021 and 1.6 percentage point drop from its April projections. According to the latest WEO update, released ahead of the annual meeting of the IMF and the World Bank, the world is expected to grow at 5.9 per cent in 2021 and 4.9 per cent in 2022.
'The cost of the lockdown so far is the loss of about 11 million jobs.' 'It is important that a fresh lockdown does not make this worse,' asserts Mahesh Vyas.
'The high unemployment rate being witnessed today is not only the highest in three years but is far more debilitating for the economy than the similar unemployment rates witnessed in 2016,' says Mahesh Vyas.
International Monetary Fund Chief Economist Gita Gopinath tells Indivjal Dhasmana high-frequency indicators for the third quarter of 2021 indicate momentum in economic recovery in India.
Only West Asia and North Africa have a lower employment rate than India, points out Mahesh Vyas.
India is among the worst-performing BRICS nations along with Brazil (ranked even lower than India at 71st this year).
In a drastic measure to stem any major disruption to the US economy as a result of the coronavirus outbreak, the Federal Reserve has cut its benchmark interest rate to almost zero and said it would buy USD700 billion in bonds. The covid-19 pandemic has sickened more than 156,000 people worldwide and left more than 5,800 dead. The death toll in the US stands at 68, while infections neared 3,700.
Labour law changes for three years may not be enough as it takes a couple of years for factories to build and operations at a proper scale start only in the third or fourth year.
Neither the CAA nor the proposed NRC are important enough to stake the well-being of so many or stake economic growth. Getting growth back on track is more important, notes Mahesh Vyas.
US President-elect Joe Biden plans to increase the number of high-skilled visas, including H-1B, and eliminate the limit on employment-based visas by country, both of which are expected to benefit tens of thousands of Indian professionals impacted by some immigration policies of the outgoing Trump administration.
Nearly 490 million people of working age are outside the bounds of India's unemployment assessments. A decrease in the unemployment rate could signal economic growth, but could just as well mean that people have given up looking for work. A revealing excerpt from Tata Sons Chairman N Chandrasekaran and Tata Chief Economist Roopa Purushothaman's Bridgital Nation: Solving Technology's People Problem.
The Survey noted that while women account for almost half of India's population, their participation in labour market is almost one-third and has been declining.
Inflation is expected to remain low in the near term, in part because of the further declines in energy prices.
Given the rapid changes in the Indian labour market, there is an urgent need to have current, accurate and publicly available data through regular, dynamic and comprehensive surveys. Indeed, this was the intention behind constituting the NITI Aayog Task Force on Improving Employment Data. The attempts by the government to "improve" labour data has actually made it worse, say Rosa Abraham, Janaki Shibu & Rajendran Narayanan.
'The large scale and widespread shrinking of the labour force in November, the peaking of unemployment in October and the fall in lead indicators in October and November point towards a worsening of the slowdown of the Indian economy in the third quarter of 2019-20,' says Mahesh Vyas.
Half of the world's youth population are subject to anxiety or depression-causing circumstances, discovers ILO survey.
'Aggressively stepping up vaccinations will constitute the most enduring stimulus of all in the coming quarters,' observes Sajjid Z Chinoy, Chief India Economist at J P Morgan.
The recovery seen in the increased economic activity till September or October is running out of steam. Labour statistics indicate a substantial slowing down of the economy in November, notes Mahesh Vyas.
On June 23, in a huge blow to Indian IT professionals eyeing the US job market, the Trump administration suspended the H-1B visas along with other types of foreign work visas until the end of 2020 to protect American workers in a crucial election year.
'...because of its permanent nature.' 'If you work for the private sector or for yourself, you are not regarded as being employed,' points out T C A Srinivasa Raghavan.
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