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Demonetisation hits December services growth

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Mumbai, January 4: The government’s demonetisation move provoked a downturn in the Indian service sector growth in December, with business activity contracting for the second consecutive month, revealed key macro economic data on Wednesday.

Indian service providers continued to be impacted by the November 8 move with the Nikkei Services Purchasing Managers’ Index (PMI) stuck almost unchanged at 46.8 in December as compared to the 46.7 in November.

An index reading of above 50 indicates an overall increase, while below 50 an overall decrease.

The PMI series of data are published by the leading global diversified provider of financial information services “IHS Markit”.

“Business activity in the service sector fell for the second consecutive month in December, reflecting a steeper reduction in incoming new work. Backlogs continued to rise, while employment decreased fractionally,” the survey said.

“Panel members widely blamed the deterioration in economic conditions on the rupee demonetisation, with concerns towards the speed of the recovery weighing heavily on sentiment,” it said.

The Indian service economy ended 2016 on a grim note, with the average PMI activity index reading for the October-December quarter the lowest since early 2014,” said Pollyanna De Lima, economist at IHS Markit and author of the report.

According to the report, services activity fell in response to a solid and accelerated drop in new business during December.

The rate of contraction in new work quickened to the fastest since September 2013, with evidence suggesting the decline reflected shortages of money in the country.

Order books at manufacturers decreased in December for the first time in 2016, it said.

With factory production also falling, activity across the private sector economy as a whole dipped to the greatest extent in over three years, De Lima said.

“This was highlighted by the seasonally adjusted Nikkei India Composite PMI Output Index (manufacturing and services) recording 47.6 in December, from 49.1 in November,” she said.

“Of concern, business confidence among service providers plunged to one of the lowest in the series’ 11-year history, suggesting that an imminent rebound from the rupee demonetisation downturn is unlikely,” she said.

Business confidence is being hampered by worries about the speed of the recovery following the rupee demonetisation, the Nikkei survey found.

IANS

Business

Chidambaram slams government over ‘economic mismanagement’

“After 5-month-high inflation and 7-month-low industrial growth comes the news of soaring trade deficit.”

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New Delhi, July 14 : Senior Congress leader P. Chidambaram on Friday slammed the government over its poor management of economy, saying inflation is at five-month high, industrial growth at five-month low and the trade deficit has soared.

Chidambaram, a former Finance Minister, said in tweets that exports were lower in June compared to May and the imports higher.

He said despite the higher trade deficit, the government would continue to say that all is well.

“After 5-month-high inflation and 7-month-low industrial growth comes the news of soaring trade deficit.”

“June exports lower than May. June imports higher than May. June trade deficit higher by $2 billion. But the government will say all is well,” he said.

Chidambaram said the Congress leaders had estimated that demonetisation would lead to a cut in growth rate by 1.5 per cent and the outgoing Chief Economic Advisor Arvind Subramanian has said that purging high currency notes in November 2016 led to a definite slowing down of economy.

The official data showed on Thursday that retail inflation in India touched the 5 per cent-mark in June, compared to 4.87 per cent in May, even as industrial output in May grew at 3.2 per cent compared to the same month last year but declined as compared to rise of 4.9 per cent in April mainly on account of a decline in manufacturing.

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Online hiring for government jobs fell 20% in June: Report

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New Delhi, July 5: Online recruitment activity for government services, including public sector enterprises and defence sector, declined by 20 per cent in June on a year-on-year basis, a monster.com report said here on Thursday.

Overall online recruitment in June 2018 fell by three per cent on a year-on-year basis and eight per cent compared with May 2018, the Monster Employment Index for June 2018 said.

“Printing and packaging sector witnessed the steepest decline — 27 per cent year-on-year basis and 15 per cent month-on-month basis,” the report said.

In the agriculture-based industries, online hiring declined by 19 per cent in June 2018, compared with June 2017.

However, the production and manufacturing segment registered a 49 per cent rise in online recruitment. Home appliances segment registered a 27 per cent fall.

“Production and manufacturing (up 49 per cent) led all monitored industry sectors by the way of long-term growth for the third month in succession,” the report said.

IANS

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Farmers’ struggle forced Centre to hike MSP: Yogendra Yadav

“It is not the price promised by PM Modi in hundreds of election meetings and contained in the 2014 election manifesto of Bharatiya Janata Party (BJP).”

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New Delhi, July 4 : Swaraj India leader Yogendra Yadav on Wednesday said that a “historic struggle” by the farmers “forced” the government to hike Minimum Support Price (MSP) for Kharif crops, though it is “not the price” what Prime Minister Narendra Modi had promised before 2014 Lok sabha elections.

“The MSP announcements of Kharif 2018-19 is a small victory for farmers. In this election year, the Modi Government has been forced to partially act, at least on paper, on the promise of remunerative MSP that it had made before the previous election,” Yadav said in a statement.

Finding flaws with the MSP announcement, he said that the announced MSP has not been “computed at 50 per cent above comprehensive cost (C2) being demanded by farmers’ organisations.

“It is not the price promised by PM Modi in hundreds of election meetings and contained in the 2014 election manifesto of Bharatiya Janata Party (BJP).”

He also raised concern over implementation of the decision, saying: “It is not an immediate relief to farmers, it is merely a promise, the fulfilment of which depends on government procurement and intensive support, something that has been lacking till now.”

Stressing to make MSP as a legal right, he said that unless MSP is prepared as a legal right, for enforcement, it remains “discretionary” and farmers will be left at the “mercy” of the next government.

Drawing a comparison between the UPA II and NDA governments, Avik Saha, National Convenor of Jai Kisan Andolan, in a statement said: “There is nothing historic or substantial about the MSP hike – it is in fact lower than the hikes given by UPA II government, in respect of almost all crops. For paddy, while the average hike provided by the UPA II was 69 per cent, the Modi government’s hike is only 41 per cent.”

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