Economic growth reduces to 5.8% in india

Slumping sales of cars and motorcycles along with the other industries in India are triggering massive job cuts, with many companies forced to shut down factories for days and axe shifts, multiple sources said.

As per industry sources, the cull has been so extensive that one senior industry source told Reuters that initial estimates suggest that automakers, parts manufacturers and dealers have laid off about 350,000 workers since April.

Within this previously unreported figure, car and motorcycle makers have laid off 15,000 and component manufacturers 100,000, with the remaining job losses at dealers, many of which have closed.

The downturn, regarded by industry executives as the worst suffered by the Indian auto industry, is posing a big challenge for Prime Minister Narendra Modi’s government as it begins its second term at a time when India’s jobless numbers are climbing.

It may be stated that, the Indian economy has been reduced up to 8% since June 2019 and it is the lowest rate among last 5 years which came down to 5.8% in between of January-March.

To revive the sector, auto executives plan to demand tax cuts and easier access to financing for both dealers and consumers at a meeting with officials from India’s finance ministry schedule.

The fallout from the auto slump could be huge. The sector employs more than 35 million people, directly and indirectly, accounting for nearly half of India’s manufacturing output. India’s jobless rate rose to 7.51% in July 2019 from 5.66% a year earlier, according to private data group CMIE. The CMIE data is more up-to-date than government figures and regarded in financial markets as more credible. At least 7% of temporary workers employed by 15 automakers in India have lost their jobs in recent months, said Vishnu Mathur, director-general at the Society of Indian Automobile Manufacturers (SIAM).

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