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Wednesday, February 1, 2023

Unemployment Breaks All Records

During 2022-23, the gross import bill may come close to USD 700 billion. Incidentally, the country’s single largest import source is China, which does not feature in India’s oil import basket. The total import from China this fiscal year is expected to be well over USD 100 billion. Record imports are taking place almost every month since the beginning of 2022-23. Excessive imports are leading to falling capacity utilisation of Indian industry and lowering the demand for employment.

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It is rather depressing to note that the unemployment rate in India reached 8.30 percent in December, the highest over the last 16 months. In urban areas, the unemployment rate exceeded 10 percent. Last month, the number of people looking for jobs increased to 40.48 percent, the largest in 2022, reported the Centre for Monitoring Indian Economy. The demand for jobs far exceeds its supply. The unemployment situation is alarming especially during the current peak season (October-March) of the Indian economy. This is despite a projected seven percent economic growth for fiscal 2022-23. The growing unemployment level suggests that economic growth is not reflected in employment growth. A key reason is: India’s increasing imports are eating into local jobs. The country has never witnessed such an import surge as it is being seen during this financial year. Imports help flourish positions in exporting countries at the cost of importing nations. This fiscal, India’s export growth has been extremely sluggish despite the falling value of the Rupee.

The government’s traditional explanation that India’s high import bill is on account of petroleum is unacceptable. The country is indeed 86 percent import-dependent on crude oil. Yet, in 2021-22, crude oil accounted for less than 20 percent of the total import bill. Over 70 percent of India’s imports are in the non-oil group. According to a union commerce ministry report, India’s merchandise imports in FY22 hit a record USD 610.2 billion, an increase of 54.7 percent over the previous year. The imports from April-November this year were USD 494 billion as against USD 381 billion for the same period last year. The merchandise trade deficit for April-November 2022 was estimated at USD 198.35 billion as against USD 115.39 billion in the corresponding period in 2021. During 2022-23, the gross import bill may come close to USD 700 billion. Incidentally, the country’s single largest import source is China, which does not feature in India’s oil import basket. The total import from China this fiscal year is expected to be well over USD 100 billion. Record imports are taking place almost every month since the beginning of 2022-23. Excessive imports are leading to falling capacity utilisation of Indian industry and lowering the demand for employment.

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Although the country’s main items of import can be categorised into five parts, accounting for 63 percent of the total import, others include a host of ordinary and non-essential items for which there is more than adequate domestic capacities. The five main groups of imports are mineral fuels, oils, waxes, and bituminous substances (27 percent of total imports); pearls, precious and semi-precious stones and jewelry (14 percent); electrical machinery and equipment (10 percent); nuclear reactors, boilers, machinery and mechanical appliances (8 percent); and organic chemicals (4 percent). India’s major import partners are China (16 percent of total imports), the United States (6 percent), United Arab Emirates (6 percent), Saudi Arabia (5 percent), and Switzerland (5 percent). So strong is the country’s import lobby that even the RSS-affiliated Swadeshi Jagaran Manch, a rightist political and cultural pan-India movement that deals with economic issues, appears to have failed to prevail upon the government on the issue of self-reliance and import control. What is pushing India to become so heavily import reliant remains a mystery. The country seems happy to export its hapless skilled and semi-skilled workers to pay for the import of luxuries by the rich.

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The Hills Timeshttps://www.thehillstimes.in/
The Hills Times, a largely circulated English daily published from Diphu and printed in Guwahati, having vast readership in hills districts of Assam, and neighbouring Nagaland, Meghalaya, Arunachal Pradesh and Manipur.
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