By Albin Joseph

After a series of economic slowdowns, two of the world’s major economies, namely Japan and the United Kingdom, have plunged into recession recently. Japan has been displaced from its position as the third largest economy by Germany. The United Kingdom fell into recession at a critical juncture when the elections are just a few months away. This poses severe challenges to Prime Minister Rishi Sunak, whose primary commitment to the nation was to promote the overall economic growth of the kingdom.

A recession is defined as two consecutive contractions in the Gross Domestic Product (GDP) of a country. If there is a dip in GDP growth for a continuous six months, then it’s termed a Recession; Japan’s economy contracted by 0.4% and that of the UK by 0.3% in the last three months of 2023. There was a steady decline in the economies of these two nations throughout the course of 2023. From July to September 2023, Japan’s economy witnessed a de-growth of 3.3%, and the UK’s economy had a slump of 0.1%. Going by these numbers, it’s obvious that these two economies are under the grip of Recession.

The cost of living in the UK has risen considerably, major sectors like manufacturing and construction have not been performing well, and the British Pound has been on a weakening trend against the US Dollar during the past six months. During 2023, the UK’s economy grew by a meagre 0.1%, which is the weakest growth ever since the 2009 financial crisis. All eyes are set on the next UK budget that UK Finance Minister (Chancellor of the Exchequer) Jeremy Hunt is to present in a couple of weeks. The budget is expected to bring in concrete measures to curb inflation and propel overall economic growth.

Japan was relegated to fourth place in terms of GDP which totaled $4.2 trillion in 2023, whereas Germany assumed third place with its GDP estimated at $:4.5 trillion. A weaker Japanese yen is the major reason attributed to the slump in Japan’s economic growth. Moreover, there has been a slowdown in business, which leads to a lack of wage increments and layoffs. This lead to a fall in domestic demand, which made people curtail their expenses and hold on to their earnings.

A decline in population growth and an ageing population have affected the overall GDP, as well as the productivity of Japan. Traditionally, both Japanese and German economies were powered by small and medium-scale industries that were renowned for their high productivity. Of late, Japan’s productivity took a beating because of its shortage of qualitative labour, whereas Germany managed to keep its productivity intact by endorsing immigration, which led to overall population growth as well. By immigration, Germany’s population grew to 85 million in 2023. This not only made up for the low birthrate in Germany but also fueled the overall growth in GDP. Japan could overcome its labour shortage by endorsing immigration, but the country has its own reservations in the formulation of policies on this front.

Though this recession wouldn’t last long, it’s quite obvious that whenever major economies plunge into recession, it will have a ripple effect across the world, at least in the short run. The Euro zone has revised its growth forecast for 2024 from 1.2% to 0.8%, and it remains to be seen whether other countries will follow suit.

The author is a Member of Loka Kerala Sabha

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Benchmark Sensex spurted 418 points to settle at more than six-month high while Nifty closed above the 17,700 mark on Tuesday amid optimism in the global markets and positive domestic macroeconomic data points.

Buying in index majors Reliance Industries and ITC also added to the optimism in equities. Climbing for the second straight session, the 30-share BSE Sensex jumped 418.45 points or 0.67 per cent to settle at 63,143.16. During the day, it advanced 452.76 points or 0.72 per cent to 63,177.47.

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“India’s rating reflects strengths from a robust growth outlook compared with peers and resilient external finances, which have supported India in navigating the large external shocks over the past year,” Fitch Ratings said.

However, these are offset by India’s weak public finances, illustrated by high deficits and debt relative to peers, as well as lagging structural indicators, including World Bank governance indicators and GDP per capita, it added.

The agency has kept India’s credit rating unchanged at ‘BBB-‘ — the lowest investment grade rating — since August 2006. Fitch Ratings forecast India to be one of the fastest-growing rated sovereigns globally at 6 per cent in the current fiscal year ending March 2024 supported by resilient investment prospects.

“Still, headwinds from elevated inflation, high interest rates and subdued global demand, along with fading pandemic-induced pent-up demand, will slow growth from our FY23 estimate of 7 per cent before rebounding to 6.7 per cent by FY25,” the global rating agency said.

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Inflation in India is slightly above the “tolerance limit”, and the government is taking steps to control it, Indian Finance Minister Nirmala Sitharaman has said.

 “Because we took a very calibrated approach, today we have an inflation which is slightly above the tolerance limit, but which is constantly being worked at so it can be brought down,” she said on Saturday.

India’s annual retail inflation for March rose at the slowest pace in nearly 15 months and was below the central bank’s upper tolerance level for the first time this year, on the back of softer food prices.

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Albin Joseph

The ongoing economic crisis in Sri Lanka has been sending shock waves not only within the island nation, but across the South Asia region. Soaring prices and lack of essential food supplies have created panic amongst the vast majority of the 22 million population. Moreover, the lackluster attitude of the government in dealing with the crisis resulted in people taking to the streets. Sri Lanka’s problem stems from the fact that the country is quickly running out of its foreign exchange reserves; and while this prognosis may seem right at first, it’s a symptom of a problem that is much deep-rooted. Let’s take a reality check on the core issues and the way forward in resolving this impending crisis.

Basically Sri Lanka falls under the category of a “Frontier Economy”, an economy that’s neither developed nor big enough to be branded as an emerging economy. It can be positioned somewhere in between these two spheres. Countries like these are usually reliant on a few focused sectors to generate national income. The nation’s economy has also been classified as a twin deficit economy by Asian Development bank in 2019. Twin deficits signal that the country’s national expenditure exceeds its national income and that its production of tradable goods or services is inadequate.

Sri Lanka’s national income is highly dependent on tourism, tea and a few other agricultural products. In fact, tourism accounts for more than 10% to its GDP and  when the pandemic hit, it was inevitable that the country would have to deal with unprecedented issues in this sector. Sri Lanka’s tourism industry took a severe beating, and the economy nosedived, with a shrinkage of 3.6% in 2020. Tourists were no longer thronging the fascinating beaches of the island and the nation’s foreign income dropped significantly. According to data from Trading Economics, Sri Lanka used to earn revenues to the tune of $455 million a month during the healthy pre-pandemic days, which plummeted to a meagre $3 million a month in the second half of 2021. While large economies such as US, Japan, China, and India were easily able to muster resources to fight the pandemic, frontier economies like Sri Lanka had to face an uphill task on this front.

As the country was reeling under the pressure of an economic crisis, its government took an untimely and unwarranted decision to go “hundred per cent organic” and in a bid to fully realise this vision, it banned the import and sale of all chemical fertilizers. This was a severe blow to the tea plantations and since tea exports accounted for a major chunk of the foreign trade, foreign exchange reserves took a hit once again. Tea accounts for the major share of Sri Lanka’s exports, generating more than $1.25 billion a year and making up almost 10% of the country’s export income. This “ill thought out” crusade not only cost tea plantations and farmers dearly but also impacted related services and financial sectors that fed off from tea exports. Eventually, tea industry capitulated, as did many other plantations. By the time the government relaxed some restrictions, the damage was already done beyond repair, and the country had already lost out on much needed foreign income.

At present, Sri Lanka is in a state of economic emergency. The nation’s foreign exchange reserves are getting depleted as it plummeted to $2.0 billion by the end of 2021 from $7.5 billion in November 2019. The outbreak of the Russia-Ukraine war was the last nail in the coffin on the foreign exchange reserves of Sri Lanka, as fuel prices soared globally making imports too expensive. With the current state of affairs, the chances of making a major recovery at the foreign exchange reserves front seems to be very remote.

What makes foreign exchange reserves so precious?

Foreign exchange, basically dollars ,  is how a country makes payment  for importing goods from international markets. So, if Sri Lanka wants to buy fuel or foodstuff, it will have to pay for it with foreign exchange reserves they have earned. Unfortunately, they have been spending a lot of foreign currency while not earning as much. So, if they need to import basic amenities from the international markets anytime soon, they’ll be in a bit of a pickle.

That’s not the end of the nation’s woes. The country was heavily reliant on foreign loans to pursue developmental and infrastructure activities. Sri Lank must repay $26 billion of its loan by 2026 and by the end of 2022 alone, they will have to settle $7 billion as repayment of loans, that they have borrowed from countries like, China, Japan and India. With hardly $1.5 billion in its reserves, and deteriorating foreign exchange income, the repayment of loans would turn out to be a herculean task.

What’s the way forward?

Although there aren’t any quick fixes to resolve these issues, the first priority is to ensure that the nation’s loan repayments need to be restructured with the major lending countries. The forex reserves will get a sigh of relief, once a deferred and prolonged repayment schedule is charted out.  Subsequently, the government will have to come out with concrete and positive measures to boost its exports with impetus on tea and other agricultural products. Imported coal accounts for almost 44% of Sri Lanka’s electricity generation, which causes a major drain on the foreign exchange reserves. Long-term policies to reduce the dependency on coal for power generation are the need of the hour. Approaching International Monetary Fund for immediate financial assistance is very much on the cards to get an immediate bailout. Though this is viewed as one of the ideal measure to deal with this crisis, it can only be done by adhering to IMF’s stringent regulations and measures to restructure the economy in its entirety.

Lessons Learned

It’s quite imperative to have a look at the lessons learned from this crisis from a political point of view and from an academic perspective as well. Misappropriation of government funds and corruption at the peripheral level can ruin the economic stability of any nation and this is a key learning that one can infer from the current turmoil in Sri Lanka. Secondly, borrowing of loans has to be done with adequate due diligence and clear rationale. Obtaining foreign loans for the overall development of a nation is ideally right and this is something that most of the frontier economies and developing nations do on an ongoing basis. But these loans can turn out to be a heavy burden on the exchequer if they are not utilised in productive areas.

Sri Lanka is a classic example of an economy that took huge loans, particularly from China for infrastructure development, which hardly generated any significant revenue to the government directly or indirectly. A frontier economy such as Sri Lanka should have used these loans in highly productive areas that could enhance the technology to fuel agricultural and industrial growth. Last, but not the least, decision making on major policy change should be done rationally and logically instead of doing it in an ad hoc manner. The current regime did a historical blunder by taking a decision overnight to abolish the import of fertilizers in order to resort to hundred per cent organic farming. The end result of this immature decision-making was quite apparent, with drop in agricultural produce and resulting in acute food shortage.

The author is a Member of Loka Kerala Sabha.

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“India’s GDP is expected to contract by 9.6% in the fiscal year that started in March,” the World Bank said on Thursday. Regional growth is projected to rebound to 4.5% in 2021, it said.

The Washington-based global lender, in its latest South Asia Economic Focus report ahead of the annual meeting of the World bank and International Monetary Fund, forecasts a sharper than expected economic slump across the region, with regional growth expected to contract by 7.7 per cent in 2020, after topping six per cent annually in the past five years.

World Bank said that India is facing an exceptional situation since the spread of the coronavirus and containment measures have severely disrupted supply and demand conditions in India.

There was a 25% decline in GDP in the second quarter of the year, which is the first quarter of the current fiscal year in India.

“The situation is much worse in India than we have ever seen before,” Hans Timmer, World Bank Chief Economist for South Asia told reporters during a conference call.

Factoring in population growth, however, income-per-capita in the region will remain 6 per cent below 2019 estimates, indicating that the expected rebound will not offset the lasting economic damage caused by the pandemic, it said.

Prime Minister Narendra Modi announced a nationwide lockdown from March 25 to contain the spread of Covid-19, which brought as much as 70% of economic activity, investment, exports, and discretionary consumption to a standstill. Only essential goods and services such as agriculture, mining, utility services, some financial and IT services and public services were allowed to operate.

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If supply has to be smooth there has to be demand. In other words, it makes sense to supply only where there is demand. This is the basic principle of traditional economics. At the same time, there is a non-traditional way of investing first and thereby creating demand.

Which of the following methods should be used to accelerate economic growth? Today, China, the world’s largest producer, has successfully applied a second, unconventional method to achieve that. In China, a “government-sponsored economy”, large-scale investment has been made with the support of the government and a large number of jobs have been created. The investment paved the way for export-oriented income and growth. On the other hand, domestic demand naturally improved with the increase in employment. The demand for a supply that meets this demand was met by an earlier investment. Elsewhere in the world, where there has been growth the focus was on investment.

But the situation in India is very different. India, the world’s second most populous country, has always been an economy based on demand and consumption. In many areas we have not been able to meet the demand-driven supply. The main reason for this was the inadequacy of capital investment. Therefore, we have to depend heavily on imports. In India, the government invests heavily in infrastructure development. There is not enough supply in any of the sectors where the government mainly invests.

India can only become an ‘investment-centric economy’ once there is a transition from substantial government investment to the growth of private investment. One of the main expectations after the Modi government came to power was that private investment would increase. But that did not happen. We have seen in recent times that even domestic investors are reluctant to invest more capital. Although the government has taken some important steps in recent years to implement investment, such as the implementation of the GST and corporate tax cuts, it has not produced any positive effects on the economy.

For India, demand must strengthen if more capital investment is to take place. India is mainly an economy based on domestic consumption. Unlike China, a significant portion of the country’s income is not dependent on exports. Therefore, more investments will be made in our country only if there is a feeling of strong demand from investors in India.

COVID-19 has grounded both supply and demand. Production activity declined significantly and demand fell due to the loss of income of the people. The government has to deal with this situation in two ways. As people’s incomes fall and job losses spread, the first step is to re-create demand through stimulus measures that put money in their hands and thereby pave the way out of the
recession. According to economists like Raghuram Rajan, Abhijit Banerjee and Amartya Sen, ways need to be opened to get more money into the hands of the people. It should be recognised that strengthening consumption is the only way out of the recession.

Another move that needs to be made along with the demand-strengthening move is to give incentives to the manufacturing sector to improve supply. Following the spread of COVID across the world, there has been hostility to China. This has created an opportunity to attract more investment in the manufacturing sector. Although some moves have been made to seize this opportunity, it has not been adequate. The government needs to have a comprehensive plan in this regard.

India’s economic growth slowed to 23.9 per cent in the April-June quarter due to the impact of COVID. It is safe to say that supply was low and demand was high for most of the economy. Every positive step taken at present will help the economy to recoup very quickly. Delaying immediate action is tantamount to wasting opportunity.

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His attack comes after official data showed on Monday that the country’s economy suffered its worst slump on record in April-June, with the gross domestic product (GDP) contracting by 23.9 per cent as the coronavirus-related lockdown weighed on the already declining consumer demand and investment.

“India is reeling under Modi-made disasters: 1. Historic GDP reduction -23.9% 2. Highest Unemployment in 45 yrs 3. 12 Crs job loss 4. Centre not paying states their GST dues 5. Globally highest COVID-19 daily cases and deaths 6. External aggression at our borders (sic),” Gandhi tweeted.

Rebutting Gandhi’s attack in a video earlier this week on the state of the economy, the BJP had mocked him saying he should release a video about the “G-23”, a reference to the 23 leaders who wrote to the Congress chief seeking the party’s overhaul.

Chief Economic Adviser K. V. Subramanian has said the economy was “experiencing a V-shaped recovery” after the lockdown was eased.

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The world’s third largest economy was already ailing when the virus outbreak struck towards the end of last year. The fallout has since gradually worsened both in COVID-19 cases and social distancing restrictions.

Japanese media reported that the latest drop was the worst since World War II. The previous worst contraction was in 2009, during the global financial crisis of 2008-09.

The economy shrank 0.6% in the January- March period, and contracted 1.8 % in the October- December period last year, indicating that Japan slipped into recession in the first quarter of this year. Recession is generally defined as two consecutive quarters of contraction.

For the April-June period, Japan’s exports dropped at a whopping annual rate of 56%, while private consumption dipped at an annual rate of nearly 29%.

That was without any full shutdown of businesses to contain coronavirus outbreaks, which have worsened in the past month, pushing the total number of confirmed cases to over 56,000.

Analysts say the economy is expected to recover gradually, once the impacts of pandemic reduce. Japan’s export-dependent e

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Evolutionary theory that went astray

The world of globalisation was very different from the days when economies of two opposites, capitalism and socialism, existed and their mutual purchases were very limited in the context of the Cold War. This change was beyond the comprehension of those who held socialist views and practised opposition to capitalism as a religion. The reactions of such people at that time to what could be called a turning point in history were strange and irrational. For example, at the time of the collapse of the socialist nations, Communist thinker EMS Namboodiripad said: “Socialism cannot return to capitalism as man cannot return to the ape.”

The observation of Namboodiripad was based on Marxian mathematics on the evolution of economics and history. But that socialist bloc collapsed, proving that the growth from feudalism to capitalism, from capitalism to socialism, and from socialism to communism was only a concept confined to the book ‘Social Darwinism’ and that it was impossible to put into practice.

Man did not return to be an ape; but socialist countries abandoned the government-controlled economy that had existed until then and embraced the free market economy. (In fact, countries such as Russia did not return to capitalism, but abandoned socialism and embraced capitalism for the first time.

History with no end

Yoshihiro Francis Fukuyama, historian and thinker, described the transition to a new world order, ending the Cold War between capitalist nations and socialists, as ‘the end of history’. In his book, The End of History and the Last Man, Fukuyama observes that Marxian theory of the evolution of human society has become irrelevant and that liberal democracy has proved to be the most acceptable final social model for human society. He said that humanity have witnessed the end of the ideological dimension of human society and the pervasiveness of Western liberal democracy as the ultimate form of government.

But three decades after the end of “history”, there is a worldwide debate about the crisis faced by capitalism. At the same time, liberal democracy is in crisis. COVID-19 put this political and economic system in even greater danger. At a time when the spread of COVID has become one that adversely affects the dynamics of the free market, the far-right political forces who have anti-democratic genes ingrained in their genes see it as an opportunity for dominance. Is it any accident that we see economic downturns and the decline of democracy coinciding in many parts of the world including the United States, the United Kingdom, Russia and India.

Even before COVID-19, we faced a world order that was very different from the global context in which Fukuyama actually described the end of history. It is a very strange and paradoxical one.

We were witnessing a competition between the free trade model of capitalism in countries, including the US, and the government-controlled model of capitalism in China before COVID. Although Fukuyama claimed in 1992 that Western liberal democracy was becoming ubiquitous as the end of the ideological dimension of human society, what actually happened around the world was not such an evolution within the set boundaries of certain parameters.

China, which aims to become the world’s largest economic power, is ruled by the Communist Party and is a government-controlled capitalism. Over the past few decades, China has become one of the fastest growing economies in the world, proving that the notion that Communist rule and capitalism are incompatible with each other is wrong. In the same decade since the collapse of the Soviet Union, China has made it clear that it will never tolerate the mass thirst for democracy by massacring young people in Tiananmen Square. Much water has flowed down the river since.

China’s dictatorship was further strengthened and now the the president could remain in power until the death as in a monarchy. At the same time, China has become one of the most effective free market economies under government control.

The ideological war between the two political streams, known as the Cold War three decades ago, ended as a result of the democratic thirst of the people in the socialist countries. In the language of Fukuyama, the end of history. But the complex picture of today’s world shows again and again that we cannot put an ‘end’ to history so easily. Politically, liberal democracy is the most acceptable final model for human society, but China is still far behind. If the free market economy is the most acceptable final model, then China is far ahead.

The country where democracy does not exist has used capitalism most effectively for economic growth. China’s government apparatus aims to overtake the United States to become the number one economic power by 2050. But the unique global environment created by COVID-19 has put up huge obstacles on the path to that goal.

The future of history

The United States and China have come to terms with the political and economic tensions that existed between the United States and the Soviet Union three decades ago. One of the major changes of the COVID era was that the whole world turned against China, which was moving forward with a clear agenda of overtaking the United States as an economic power. The road to China’s goal of becoming number one in the world by 2050 has become extremely difficult.

There is a widespread perception that the health care system created under the capitalist model will not be capable enough to deal with the global epidemic at the same pace as COVID. It has been described as a fall of capitalism. At the same time, the world has to be aware of another great danger. In fact, the root of this failure lies in a dangerous cocktail that the world has never seen before, with a totalitarian and government-created free market economy.

While it is true that the health care system in the capitalist countries has not been able to prevent the dangerous march of corona, if the disease had erupted in a country where democracy existed, it would have taken precautions to prevent its spread at the very outset. But China had a lot to hide from the world and its own people. It was not ready for any transparent disclosure that would affect their financial goals. In fact, the COVID period revealed the dangers of dictatorship rather than the limitations of capitalism.

In 2018, addressing a world context in which the possibility of a return to socialist thought in the face of the challenges of liberal democracy was being explored, Fukuyama said in an interview, “In the light of two-and-a-half decades of new experience, the potential structural threat to liberal democracy is not that of socialism, but that of China’s state capitalist model. The Chinese openly claim that their model is superior because it can guarantee stability and growth in the long run rather than democracy. If it is bigger than the US in the next 30 years, the Chinese people will be richer and the country will stand together, then we would have to concede that their stand was the right model.”

But now it is not easy to get away with that claim anymore. It is quite doubtful whether China will be able to tell us that this is the way forward. The realisation that over-reliance on China is putting themselves at risk (not only emotionally, but also by the nations of the world recognising that it is a problem of long-term economic stability) has led the whole world to move towards a trade war with China.

The word trade war, familiar to the US world, is now included in their dictionaries all over the world. Prior to the coup, almost all countries except the US believed that a trade war between the US and China would adversely affect the global economy and should be avoided. But after the advent of COVID, these countries are choosing the path of a trade war against China (even if they do not know how long it will last and what price they would have to pay).

Of course, the post-COVID era will be a new one full of experimentation for a free market economy. And as countries move towards a de-globalisation, market contraction will occur. We are deliberately preparing to close many of the windows that were previously open. At present, we are aware of its long-term effectiveness. But what we can do with optimism is to put aside the ambitions of overgrowth and see the recession and trade war as a healthy corrective step.

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The country has recorded the third highest number of coronavirus cases globally, behind only the United States and Brazil, with over 1.8 million confirmed infections and more than 38,000 deaths, according to a Reuters tally.

That has forced state and central governments to impose strict lockdown measures to curb the spread of the virus, keeping people at home and businesses closed, stifling demand and cementing fears of a deep recession.

July was the fifth straight month the index was sub-50, the longest such stretch since a 10-month run to April 2014.

Although slightly improved from June, sub-indexes tracking domestic and foreign demand remained firmly in contraction territory even though firms cut prices despite an uptick in input costs.

Meanwhile, firms remained pessimistic about the next 12 months and cut jobs at the fastest pace on record.

A composite PMI, which includes manufacturing and services, suggested an ongoing deep contraction in Asia’s third-largest economy, falling to 37.2 from June’s 37.8. A
poll shows analysts expect the economy would shrink 5.1% in the fiscal year 2020-21 – the biggest decline since 1979.

India’s worsening economic outlook has likely raised the chances the Reserve Bank of India will cut interest rates at its policy meeting on Thursday.

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UST Global announced a strategic investment in London headquartered Ksubaka, a provider of innovative in-store gamified sales, data collection, and marketing tools for retailers. The collaboration combines Ksubaka’s platform to deliver fast-to-market solutions and UST Global’s broad reach for deep system integrations and working with most of the top retailers in the world.

“At UST Global,we are constantly looking for innovative ways to help our clients find their crucial edge in the rapidly shifting and highly competitive retail market. Ksubaka will help us revolutionize the digital landscape for our retail clients globally,”said Sunil Kanchi, Chief Investment Officer, UST Global.“Ksubaka’s vast experience in enhancing customer experience and their unique business strategy has helped them carve a niche in the retail industry.Our clients will now have access to a framework that allows retailers to grow their solution,integrate,and scale,”he said.

Ksubaka has developed a wide range of cutting-edge products that enable retailers to deliver a superior customer experience. The company has launched initiatives like Smiles, a customer research app; Cloudshelf, a powerful offline-to-online aisle for retail stores; and Gamified Experience, a range of custom games to connect with customers, encourage exploration,and promote brands.

“Ksubaka is excited to be at the heart of the digitization of physical space that is underway. Our solutions deliver trackable results via touchscreens, without any of the pain points they are accustomed to,” said Julian Corbett,Co-Founder and Chairman,Ksubaka. “We aim to constantly improve the retail space by helping retailers better engage, communicate with, and understand their shoppers. We are very excited to partner with UST Global and deliver these innovative in-store experiences,”Giles Corbett,Ksubaka’s Co-founder and CEO said.

Adapting to the Covid-19 situation of their clients,Ksubaka has released a suite of products to support their return-to-market, most recently a remote temperature sensing kiosk to reassure and help keep safe staff and visitors as they return to stores.

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For the first time, diesel price in India has surpassed the petrol as fuel rate hiked for the 18th day in a row on Wednesday. The diesel price was hiked by 45 paise while there was not a hike in petrol by price. Diesel will cost Rs 75.62 per litre and petrol Rs 80.69 per litre on Wednesday.In this current hiking, the domestic rates of auto fuels may soon cross the Rs.80 liter. International benchmark Brent crude has surged $42.03.The increase in rates started since June 7.

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The much-awaited southwest monsoon is expected to reach the Kerala coast between June 1 and June 5 this year. The India Meteorological Department (IMD) has factored in a delay of four days and has said that the seasonal rains would arrive in the Kerala around June 5 with a model error of four days.
A rogue circulation, likely emerging midway off Somalia, is seen as throwing a spanner into the monsoon works.
However, a persisting circulation nearer home over the South-East Arabian Sea, off Kerala and over Lakshadweep, has been engaging the IMD’s attention for several days now.
Meanwhile, the monsoon pieces are falling right into place elsewhere over Maldives where all indications are that the rains may have established. The normal timeline of onset is mid-May. Scattered showers and few thunderstorms have been forecast for the country, to the South-West of Sri Lanka.

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The world’s biggest lockdown forced 122 million people out of jobs in India in April 2020, according to estimates by Center for Monitoring Indian Economy (CMIE).

Employment plunged in April after the government imposed a 40-day lockdown in a nation of 1.3 billion people, forcing businesses to shut and pushing up the jobless rate to 27.1% in the week ended May 3, surveys by CMIE showed.

Daily wage workers and those employed by small businesses have taken a massive blow, according to CMIE. These include hawkers, roadside vendors, workers employed in the construction industry and many who eke out a living by pushing handcarts to rickshaws.

The estimates of India’s job losses are more than four times the 30 million Americans who’ve filed for unemployment benefits over six weeks. The data could get worse in India with the lockdown extended in many areas, the CMIE warned.

The government began easing restrictions in some areas in the mid week of May, resulting in violence and chaos as liquor stores reopened and transport resumed for migrant workers stranded during the lockdown.

The economic crisis will be one of Prime Minister Narendra Modi’s biggest tests.

The CMIE figures show more people are also looking for jobs amid the downturn. The labor participation rate rose to 36.2% in the week ended May 3 from 35.4% previously.

The last official unemployment figures from the government, released in May 2019, estimated the unemployment rate at 6.1% in the year to June 2018.

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