Are we headed for a recession?

It’s not even a month since India’s Finance Minister, Nirmala Sitharaman presented her maiden budget and the writing is on the wall — tough days are coming. Brace up (“India’s passenger vehicle sales drop at steepest pace in 2 decades,” Aug. 13, Gulf Today).

The BJP and Modi who came to power for a second term by a landslide majority are still groping in the dark on its major challenge, that of providing employment to the millions who voted them to power. The party promised the electorate that it would create avenues for employment, but the reality is stark.

The recent downturn in the auto industry has hit the job market adversely with some reports stating that around 3.5 lakh auto sector jobs have been lost alongside the sale of passenger cars in July 2019 falling 35 per cent compared to the same month last year.

The auto industry which accounts for nearly half of India’s manufacturing output employs over 35 million people directly and indirectly. And with the industry going through one of its worst periods in the last two decades, we can’t expect much relief in the coming months.

As mentioned in your report, India’s jobless rate climbed to 7.51 per cent in July from 5.66 per cent a year earlier. That’s a disturbing stat. It is not only the auto sector which is hit hard even the real estate industry is facing a sharp drop. Reports are stating the outlook for Indian real estate fell to a 21-month low in the quarter to June. Are we headed for a recession?

Omar Sajid
By email