There is a visible absence of pressure especially on the capacity of manufacturers. As the goods are stock piled, manufacturing activity in the country has been slipping down to an 18-month low in December 2023, as per the HSBC India Manufacturing Purchasing Managers’ Index, whose reading for the month stood at 54.9 compared to 56 in November. A reading of over 50 on the index indicates expansion in activity.

The output in the factories was coming at the slowest pace since October 2022, as demand for certain commodities had started fading. The orders, that came as scant tiny drops, new orders never crossed speed gained earlier, for example in the first few months of the year. International orders continued to grow in December, but at the joint-slowest rate in eight months.

For production of commodities, it is imperative to have inputs. The cost of production has started rising and the sale has gone down. Input costs rose at the second-slowest rate in nearly three-and-a-half years, and at the same time, inflation in output charges paid by buyers had been a nine-month low, according to the 400-odd participants of the survey-based index which is put together by S&P Global.

In a statement, the HSBC and S&P Global said that the latest reading was above the long-run series trend, but contributed to the lowest quarterly average of 55.5 since the first quarter of fiscal year 2022-23. Outstanding business volumes rose only marginally, creating little room for new jobs to be created. The HSBC India PMI data showed a general lack of pressure on the capacity of manufacturers at the end of the third fiscal quarter. In December, employment rate kept its stability, with the respective seasonally adjusted index only fractionally above the 50 mark that indicates no change in activity levels. Companies continued to raise their inventories of inputs, albeit at the slowest rate since November 2022. However, their ‘year-ahead outlook’ was the most upbeat in three months.

The key inputs for which higher prices were reported in December were chemicals, paper and textiles. “Growth of both output and new orders softened, but on the other hand, the future output index rose since November,” remarked HSBC chief India economist while trying to explain the situation. While explaining the closely knitted issues of inputs, like that of failing growth, and scarcity of essentials as well as the fall in manufacturing growth, there is another issue intimately connected with all this and influencing it, which is growing rate of unemployment among youth in the prime of their lives and yet absent from the national politics.

It is a fact that India has a serious issue so far as generating jobs is concerned, which is a classical part of means of production. Data from the Centre for Monitoring Indian Economy, for example, shows that the share of youth (aged 15-29) in the workforce dropped sharply from 25 percent in 2016-17 to 17 in 2022-’23. In contrast, for those aged above 45, the share has gone up from 37 percent to 49 percent.

The youth employment problem is haunting the country and many reports been carried even about the suicidal tendencies growing among the poverty stricken youth. Job markets being run at a very low key, India finds it difficult to keep up with population growth and offering suitable employment to new adults.

One of the estimates by HSBC says that while India will need to create billions of jobs over the next decade, it will only end up with 24 million. The rate of unemployment among graduates is also very high. It is at 42 percent and still going up.

Unemployment leads to not only absence of bare minimum, but also spreads gloom over the generation that is to take the development further. Failure to meet the tasks and no optimism left for the future, the working class in the country is at the top in terms of suicides. A third of these figures are suicides of farmers and farm labourers. The next highest number of suicides is that of daily wage labourers. Over the years people’s purchasing power has gone down, while inflation has been on the rise. Along with this, unemployment has also peaked. As a result, people’s savings have also declined by 5 per cent. NCRB data says that most workers opt to quit the world due to family reasons that are caused of financial crisis. (IPA Service)