Seven Glimpses of the Coming Recession
“Even if we don’t eat one day, the next day we have to eat”
NEW DELHI: “People are not buying anything. 80 percent of my business is now finished,” says a visibly harried Kuldeep, who runs a stall selling an assortment of hair ties, nail polish and mobile phone covers. “Since the elections things have been even worse. I’m doing 10-20 percent of what I used to. You can look around, there are no customers,” he points to the walkway in front of south Delhi’s Green Park Market.
“Mehengai hai – there is inflation – people have no money, and the little they have, they don’t want to spend it,” Kuldeep explains. “Earlier, people would buy four hair ties just to have them. Now they come and buy one only if their hair tie breaks or snaps.”
The latest Reserve Bank of India report confirms Kuldeep’s perception of an economic slowdown. The GDP growth rate slipped to five percent, the lowest quarterly figure in six years. For those who don’t care for government data, news of a sharp and relentless decline in automobile sales, and popular biscuit maker Parle G’s announcement that it may fire up to 10,000 workers indicate deep distress.
Kuldeep at his stall selling an assortment of hair ties, nail paint and mobile phone covers
Given the long decline in private investment and bank lending, the fall in consumption expenditure will only exacerbate the crisis, feeding into a vicious loop for ordinary people: low earnings and even lower expenditure.
For 60 year old Bharat Pal Singh who runs a paan shop, this loop is already a reality. “Of course our expenditure has been affected. We have to live according to our earnings. If earnings are low, expenditure has to be low.”
Singh has seven children, three boys and four girls. “It’s been a year or so since business started slowing down,” he says. “Public kum hai.” There are fewer customers.
If earnings are low, expenditure has to be low, says Bharat Pal Singh
“Since notebandi (demonetisation) there are fewer people to be seen in the markets,” affirms Manoj as he steams a fresh batch of momos. “Earlier I earned close to ₹800 per day. Today I barely make 400.”
Manoj is originally from Darjeeling, and the sole breadwinner in his family with a young child at home. “Business hasn’t improved. It’s very difficult. My earnings are less, but our expenditure is the same. It’s hard to cut down on basics.”
Manoj lives in a rented accommodation and says it’s hard to make ends meet
“How do we reduce expenditure?” echoes Shiv Dayal, his small vegetable cart covered with a thick cloth. “We have to eat. Even if we don’t eat one day, the next day we have to eat.”
“The last two-three months have been especially bad,” he continues. “No one is buying anything, business is down by more than half. Everything is impacted, the demand for everything has come down.”
Dayal is the only earning member of his family, with three young children at home. “Pareshani ho rahi hai… badhti jayegi.” We’re facing hardship… it’s only going to get worse.
Shiv Dayal is the sole earner in his family
As India’s economic growth slows, unemployment has risen to levels not seen in generations. When the government finally released the latest National Sample Survey on May 30 after an unexplained delay, it showed unemployment in 2017-18 stood at 6 percent, a 45 year high. A survey published by the Centre for Monitoring the Indian Economy last July pegged the unemployment rate at 7.8 percent.
“Business kam nahi, khatam ho gayi hai. Business is not down, it’s over” says Harminder Singh, who owns three flower stalls in the market. “Earlier my flower stalls did average combined sales of ₹15,000-18,000 every day. Today, if we make even ₹3000 we’re happy.”
“It’s been like this for the last year, year and a half… Earlier, when business slowed down, it would come up again. This time it’s gone down and not come back up. It’s over,” he says.
“I used to employ eight boys to man the stalls, now I have only two,” he adds, pointing to the young men seated beside a colourful array of flowers. There are no customers in sight.
Sales at Harminder Singh’s flower stalls have crashed, from ₹18,000 per day to below ₹3000
Nearby, bookseller Ramesh Kashyap has a similar story to tell. “Business is down – and books have been impacted especially badly. Book and magazine sales are very low. They’ve been declining over the last 2-3 years, but in the past year it’s been even worse.”
“There’s so much competition from online platforms,” Kashyap explains. “Online they sell nakli (pirated) books but people still buy them. There are fewer customers in the market… I think people now prefer to sit at home and order from online apps like Swiggy.”
How has he dealt with the drop in sales? “Of course I’ve had to curtail expenses, but how much can I curtail. I have to try and earn more. And I am trying… Look, I’m selling mobile phone covers along with books now.”
The past year has been especially bad, says Ramesh Kashyap
“The whole market is running losses,” Kuldeep confirms. “Everyone is struggling. Pait bharna padta hai, people have to fill their stomachs. But they don’t have to buy goods like these,” he says, pointing to rows of hair clips and nail paint.
Many analysts have pointed to the drop in demand as a factor behind the slowdown. Private final consumption expenditure in India declined by ₹1.5 lakh crore in the first quarter of the current financial year. And a sharp decline in the domestic savings rate shows how, despite spending less, households have had to dip into their savings to make ends meet.
Green Park Market at 2 pm on a weekday
“Earlier I used to be able to save, now there is nothing left after paying for rent and food,” says Abirun Bibi, who works as a part time cook in three homes. She is the sole breadwinner in her family. Her husband is too ill to work, and her 19 year old son hasn’t been able to find work.
“Our expenses have increased a lot. Everyday we are spending around ₹500,” she says. “We like to eat meat or fish at least once a day. Even if the others don’t, I definitely do. Now sometimes we get to eat it only after 2-3 days, because everything is so expensive. We get only half a kg where we used to get 1 kg earlier. We mix the meat in with other vegetables like potatoes or saag.”
Her household’s changing consumption pattern tells a story in itself. “Fruits we haven’t been buying, it has become too expensive. We only get one apple for my grandchild because he won’t eat anything else. Milk we used to get 1 kg, now we have reduced it to half. Earlier we would get full cream milk, now we get toned.”
Abirun Bibi is encouraging her son to return to their home in Bengal. “I have been telling him to go back home, so he can earn something by working in the fields. Over here, nothing is left. The rent we have to pay, and the rest goes in buying food.”
“We used to get a sack of rice for ₹700, now it has become ₹1000 per sack. Aata (flour) has also increased in price,” she says.
“How do we cut expenditure on these things? We would go hungry.”
Photographs: Ananya Singh/ The Citizen