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India Turns to Economic Overhaul as Growth Prospects Slide Amid Coronavirus

India Turns to Economic Overhaul as Growth Prospects Slide Amid Coronavirus

NEW DELHI—With India facing an economic crisis brought on by the coronavirus pandemic, Prime Minister Narendra Modi is looking to deregulation as the cure.

The changes pushed through in recent weeks by his Bharatiya Janata Party, affecting everything from factory floors to farming, have so far led to more confusion than acclaim, but economists say the economic overhaul could ultimately improve India’s troubled growth prospects.

“The reforms are in the right direction. They are bold steps,” said Ashok Gulati, an Indian agricultural economist and professor at the Indian Council for Research on International Economic Relations.

India’s economic growth was slowing alarmingly even before the pandemic abruptly threw it into reverse, starting in March. In the months that followed, the economy contracted by almost one-quarter, the sharpest blow suffered by any of the world’s largest economies during the coronavirus-induced downturns.

The poor have been particularly hard hit, as workers who had migrated to cities to support families in rural areas returned home when those jobs disappeared. With many returning to farming, they now depend more than ever on India’s heavily regulated agricultural economy.

Mr. Modi, whose government’s perilous financial state has left few options for addressing the crisis, pushed through a grab bag of dramatic regulatory changes last month with little warning and no debate in Parliament. In a voice vote—obscured by technical glitches with the public broadcast of the proceeding that made it difficult to determine which parliamentarians actually supported the measures—the BJP passed a flurry of politically difficult changes.

In a single swoop, it dismantled a longstanding regulatory system that forced farmers to sell most of their crops through government-approved wholesale markets dominated by traders and middlemen instead of directly to consumers or food processors.

Then the BJP passed a series of new labor measures that increased the number

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Second Wave of Coronavirus Wallops Canadian Consumer Confidence

Second Wave of Coronavirus Wallops Canadian Consumer Confidence

(Bloomberg) — Canadian consumer confidence recorded its largest one-week decline in five months as the nation gets hit by a second wave of Covid-19 cases.

The Bloomberg Nanos Canadian Confidence Index, a composite measure of financial health and economic expectations derived from telephone polling, dropped more than half a point to 52.4 for the week ended Oct. 9. That’s the biggest weekly decline since April, bringing the gauge to the lowest since mid-August.

The sharp decline in sentiment coincides with new lockdowns on activity in the country’s two largest provinces, Ontario and Quebec, which are experiencing a sharp rebound in cases. On Friday, Ontario’s government announced closures of businesses and restrictions on family gatherings, in three regions, including Toronto. That comes after similar restrictions in Quebec in recent weeks.

chart: Canadian consumer confidence takes second-wave hit

© Bloomberg
Canadian consumer confidence takes second-wave hit

Every week, Nanos Research surveys 250 Canadians for their views on personal finances, job security and their outlook for the economy and real estate prices. Bloomberg publishes four-week rolling averages of the 1,000 responses.


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The slide in confidence last week was the first major move for the index since mid-August, when Canadian household sentiment began to plateau after recouping more than four-fifths of pandemic-related losses.

The drop reflects declining sentiment around the broader economic outlook, despite relatively robust indicators in recent weeks including a surprise jobs gain in September. The share of households that expect the economy will strengthen over the next six months dropped to 16%, its eighth weekly decline since hitting a post-pandemic high of 25% in mid August.

Canadians, however, remain bullish on housing. About 44% of respondents expect the value of real estate in their neighborhood will go up over the next six months. That’s unchanged from last week, with the reading for that question hovering at

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State and city leaders blame social gatherings, not businesses or schools, for coronavirus uptick in New London

State and city leaders blame social gatherings, not businesses or schools, for coronavirus uptick in New London

Connecticut and local officials said Monday that the recent uptick in coronavirus cases in New London can be traced back to a series of social gatherings and other small social interactions — not to local school or business reopenings, or to the nearby casinos.

“We’re being told by the contact tracers that it’s not coming from any institutional or business setting, it’s coming predominantly from social spread … where people are letting their guard down,” said New London Mayor Michael Passero.

He pointed to situations — such as small family gatherings that are well within the state limits on gathering size — where people may feel relaxed enough that they remove their masks or sit nearby one another. But COVID-19 can still spread, even among a small group of people and even from people who aren’t displaying any symptoms.

“The institutional environments — nursing homes, schools, even the casino — they have these strict protocols in place, people are less likely to let their guard down,” Passero said. “So where it’s spreading now is where people are more likely to be relaxed and let their guard down.”

The state issued a COVID-19 alert for New London on Thursday, after a steep increase in cases in the city. New London and the surrounding areas saw relatively few cases in the spring, and by Sept. 25 New London had recorded a total of 229 confirmed or probable COVID-19 cases since the pandemic began in March. But from Sept. 25 to Oct. 9, New London’s cases jumped up to 368 — an increase of 139 in just two weeks.

The reported cause of the New London uptick align with comments made by Dr. Deborah Birx, the White House coronavirus response coordinator, during a visit to UConn’s Hartford campus last week.

“This is really

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D.C.-area housing market flourishes despite coronavirus

D.C.-area housing market flourishes despite coronavirus

The various shapes predicted by economists reflect their expectations for the charts generated by employment figures, the stock market, retail sales, auto sales and home sales as people return to work. These expectations are tempered by predictions of any potential future issue with a stronger return of the coronavirus that could cause renewed stay-at-home mandates. Unlike the previous recession at the end of the 2000s, which was fueled in part by the housing crisis, today’s difficulties are directly tied to efforts to control the virus rather than any fundamental economic problems.

Nationwide, the housing market is in particularly good shape because demand remains high and mortgage rates are phenomenally low. The housing shortage will keep competition heated and prices firm.

The Washington region, widely regarded as a recession-resistant economy thanks to jobs tied to the federal government and the tech industry, has seen a strong resurgence since May.

Spring market converted to summer market

The housing market, particularly in the Washington, D.C., region, was on track for a robust spring. In the first half of March, before the stay-at-home guidelines kicked in, homes were selling fast and the median sales price for the month reached a 10-year high of $490,000. More than half of all homes sold in the region were snapped up in one to 10 days.

Even in April, as concern about the novel coronavirus spread, regional home prices were up to a 10-year high for the month, at $507,000, which was also an increase of 6.7 percent over the median sales price in April 2019. Homes were selling for the full asking price or more.

But in April, pending sales declined and new listings dropped significantly as sellers opted to hold back their listings. Pending sales refer to homes that are under contract that have yet to

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India needs to revive jobs that were lost to coronavirus pandemic

India needs to revive jobs that were lost to coronavirus pandemic

SINGAPORE — India needs to restore purchasing power in rural and urban areas for growth to pick up again, an economist said Monday.

To do that, New Delhi has to revive jobs that were lost due to the pandemic through both an existing rural employment guarantee scheme and by introducing a similar program in urban areas where work has dried up, Arun Kumar, an expert on India’s informal economy, told CNBC’s “Street Signs Asia.”

“What the government should do really is that the large number of people who’ve lost work, it needs to revive that,” he said

“So therefore it needs to pump in purchasing power into the rural areas, through the rural employment guarantee scheme, and start an urban guarantee scheme because a lot of people who are returning to urban areas are also not finding work,” he said, adding that the services sector is not carrying the same amount of economic weight as before the pandemic.

“Unless the demand is put into the economy, (growth is) not going to really pick up even if you allow industries to reopen,” he said. Kumar also explained that consumer confidence is likely to remain low due to lingering uncertainty as the festive season approaches.

During festive seasons, Indians typically gather in large crowds at places of worships and at shopping malls, especially during Christmas. India now has reported more than 7.1 million cases of coronavirus and over 109,000 people have died. While the number of daily reported cases have recently declined from September highs, there are worries that the figure could jump during the festive period.

The unemployment rate in India was about 6.7% in September, down from the April high of 23.5%, according to data from Centre for Monitoring Indian Economy.

Green shoots emerging

For the three months from April

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