Foreclosures in America Are Leading to Loss of Jobs in India
In a chain reaction, foreclosures in America are leading to loss of jobs in India. Unemployment in the industrial and service categories in India are increasing but the government lacks a sense of urgency in tackling the same.
The recession in USA is beginning to impact India. A timid survey reveals that employment in various sectors have gone down form 16.2 million in September 2008 to 15.7 million in December 2008. This calculated to a job loss of nearly half a million. Many think that reality is far worse than what the survey indicates – both in numbers and time span. More people have lost jobs during a greater period of time.
The survey showed that employment fell in each month during the period studied. The media has focused on the loss of white-collar jobs like those in Jet Airways. High oil prices, increase in competition and fall in demand led to the laying off of about thousand employees. The reaction to this piece of news was so strongly adverse that the company was forced to back track on the decision and restructure its operational costs with governmental concessions.
The crisis in America and the developed world impacted those in the software and ITeS (IT-enabled Services) because outsourcing was one of the main issues in these countries. India was the most important country where services were outsourced with the help of the information technology. Here too however the work force affected belonged to the white-collar elite.
The other sections badly mauled by the foreclosure related crisis in America is the export oriented textile and garment, gem and jewellery and leather and carpets industries of India.
The IMF predicts that the export growth of the emerging and developing countries is likely to plummet from a positive 9.6% in 2007 and 5.6% in 2008 to a negative drop of 0.8% in 2009. 2010 holds out hope – if IMF is to be believed totally. Reality shows that 2009 slump will be sharper than had been estimated.
Recession in developing world is taking its toll also on the domestic market in India with demand having fallen for a wide range of goods and services – housing, automobiles, consumer durables etc. The latter had so far been driven by easy liquidity of cash and low interest. It is also telling on crop production and rural employment schemes.
