NEW DELHI: The hunt for work becomes more desperate every day on Delhi’s street corner labour markets as India’s economic slowdown bites deeper, piling pressure on Prime Minister Narendra Modi just half a year into his second term.
Meanwhile, the central bank left the interest rate unchanged for a sixth time on Thursday because of high inflation, while it slashed its annual growth forecast as the government struggles to jumpstart the economy.
The Reserve Bank of India (RBI) said the benchmark repo rate — the level at which it lends to commercial banks — would remain unchanged at 5.15 per cent, a nine-year low.
With no cut in the lending cost with amid rising unemployment, which is at a four-decade high, the patience was running thin at the “labour Chowk”, or market, in the packed, narrow streets of Old Delhi.
Among the hundreds of painters, electricians, carpenters and plumbers who anxiously gather at dawn each day, 55-year-old painter Tehseen has been a regular for three decades. But he is despondent.
RBI leaves interest rate unchanged for sixth time owing to high inflation
His monthly income has slumped from about $350 to $140 in the past three years. He is at least still earning. The unemployment rate, currently about 8.5 per cent, has hit a four-decade high in the past two years.
Tehseen blames government efforts to eradicate the tax-avoiding “unofficial economy”. A government survey this year estimated that more than 90pc of the workforce are “unofficial”.
Modi stunned the country in November 2016 by cancelling more than 80pc of the bank notes in circulation, and the introduction a year later of a nationwide goods and services tax dealt a new blow to business confidence.
Last week, official figures showed the economy grew just 4.5pc in the second quarter, the slowest rate in six years. Modi’s rightwing government is struggling to convince the public that it has the answers to the slowdown.
“Companies have suffered since the note ban,” said Tehseen.
“They do not want to think about getting their offices renovated when they have no business. We have to bear the brunt now.” Raju, a labour market carpenter for 20 years, said he now goes for days on end without a job offer.
“The work and the money are 50pc down on what I used to get,” he said.
And lower wages means a harder time to get a meal on the table.
At the Old Delhi food market, Zarina Begum said she sometimes goes home with her bags empty. “The vegetables are just too expensive,” said the 50-year-old housewife.
On bad days her children get a meal of pulses, or chickpea flour with oil.
Raj Kumar used to sell a meal of lentils and vegetables in his nearby restaurant for the equivalent of 56 US cents. But increased costs means he now asks 70 cents and sales have taken a hit.
“I had to increase prices to keep up with expenses. But people just don’t have the money,” he said.
Sandip Jain, a 45-year-old stone mason, said people might have a good opinion of Modi but they are disappointed with his handling of the economy.
“Every businessman is in trouble and is worried. Those who ended their day with an income of 700 rupees (10 dollars) are now down to 270,” he said.
Finance minister Nirmala Sitharaman has announced reforms, including easing restrictions on foreign investment and cutting corporate taxes. But that does little to boost public confidence in a country where hundreds of millions live barely on poverty wages.
Published in Dawn, December 6th, 2019