Five million lost jobs in India between 2016 and 2018

According to the Center for Monitoring the Indian Economy, employment actually contracted in the year following demonetization by 3.5 million jobs. The think tank said unemployment reached 7.4 percent in December 2018, its highest rate in more than two years. (AP)
Updated 17 April 2019
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Five million lost jobs in India between 2016 and 2018

  • The report by the Azim Premji University comes as Indians are voting in a staggered general election, which is due to end on May 19
  • The unemployed were mostly higher educated and young people, in the 20-24 age range

NEW DELHI: At least five million Indians lost their jobs between 2016 and 2018, and young urban men are being hit hardest, a Bengaluru-based private university said in a report on Tuesday.
The report by the Azim Premji University comes as Indians are voting in a staggered general election, which is due to end on May 19, with Prime Minister Narendra Modi’s government keen to defend its economic record, including on jobs.
“In addition to rising open unemployment among the higher educated, the less educated (and likely informal) workers have also seen job losses and reduced work opportunities since 2016,” said Amit Basole, an economist and lead author of the report.
The report did not say how many jobs were created during the period.
Modi’s abrupt withdrawal of high value currency notes from circulation in November 2016, with the aim of curbing tax evasion and promoting digital transactions, disrupted small businesses and sparked layoffs.
The introduction of a national sales tax the following year compounded difficulties for some businesses.
The unemployed were mostly higher educated and young people, in the 20-24 age range, according to the study titled “State of Working India 2019.”
“Among urban men, for example, this age group accounts for 13.5 percent of the working age population but 60 percent of the unemployed,” it said.
Modi has faced criticism for not doing enough to create jobs for millions of unemployed young people despite official annual economic growth of about 7 percent for the past five years.
An official survey that the government withheld showed unemployment rose to its highest level in at least 45 years in 2017/18, the Business Standard newspaper reported in February.
The unemployment rate rose to 7.2 percent in February 2019, its highest since September 2016, and up from 5.9 percent in February 2018, according to data compiled by the private research house, Center for Monitoring Indian Economy (CMIE).
The report suggested the next government should consider an urban employment guarantee scheme to create jobs, build infrastructure and provide services.
India has a rural jobs guarantee program, launched in 2006, which offers work to about 70 million rural people at the minimum wage for 100 days a year.
“India is at a crucial juncture in its economic development where timely public investment and public policy can reap huge rewards,” Basole said.


Saudi Real Estate Refinance Co. plans up to $1.07bn sukuk sale this year

Updated 23 April 2019
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Saudi Real Estate Refinance Co. plans up to $1.07bn sukuk sale this year

  • The plan by SRC, a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, comes as it prepares to purchase more home loan portfolios
  • SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year

RIYADH: Saudi Real Estate Refinance Co. (SRC), modelled on US mortgage finance firm Fannie Mae, aims to issue up to 4 billion riyals ($1.07 billion) of long-term sukuk this year, its chief executive said on Tuesday.

The plan by SRC, a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, comes as it prepares to purchase more home loan portfolios from mortgage financing companies and banks to boost the Kingdom’s secondary mortgage market.

SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year, Fabrice Susini told Reuters in an interview.

“Our strategy is clearly to tap the market twice this year,” he said. “We are really looking at probably issuing something between ... 2 and 4 billion riyal that we may be issuing in two tranches.

He said SRC was looking at sukuk in the 10 to 15-year range, to help minimize refinancing risks. “Generally speaking we are trying to issue as long as possible,” Susini said.

He said the company was assessing whether it could also issue bonds in currencies other than the local riyal.

In March, SRC completed a 750 million riyal sukuk issue with multiple tenors, under a program that allows it to issue up to 11 billion riyals of local currency denominated Islamic bonds.

“The rule of the game for us is, like many projects across the Kingdom, attract liquidity from foreign investors,” Susini said.

He said SRC had spent 1.2 billion riyals from its balance sheet buying mortgages from local mortgage financing companies and provided liquidity to these firms.

It has also signed initial accords with several commercial banks to acquire housing mortgage portfolios.

Saudi Arabia’s housing ministry is targeting the mortgage market to reach a total value of 502 billion riyals by 2020 from around 300 billion riyals now.

The government wants to increase activity in the real estate market as it moves to revitalize the economy and is taking steps to reform the sector as part of its 2030 reform plan.

It has been working with developers and local banks to counter a shortage of affordable housing — one of the country’s biggest social and economic problems. Saudi Arabia wants 60 percent of its nationals to own homes by 2020, up from 47 percent in 2016.

The size of real estate financing relative to its gross domestic product is 5 percent in Saudi Arabia compared to 69 percent in the United States, 74 percent in the United Kingdom and 43 pct in Canada, the housing ministry has said.

“The goal of SRC in this market was to make sure that we will be able to refinance at least around 10 percent of the market in 2020, and 20 percent of the market by 2028,” Susini told Reuters.