Data Summary: Informal Sector Work, India-Russia Trade, High Inflation

A new government study shows that the number of jobs in the informal sector has fallen over the past seven years. Meanwhile, India and Russia have agreed to increase trade between them to $100 billion by 2030.

Shrinking job market

Unemployment is one of the biggest problems facing India, and a new study released by the government reveals a worrying trend in the informal sector. In 2015-16, the sector employed 111.3 million workers, but in 2022-23, it only employed 109.6 million, mainly due to a decline in the manufacturing sector, Mint analysis of the Annual Survey of Unincorporated Sector Enterprises showed. However, employment in 2022-23 was higher than the 97.9 million recorded in the previous year.

Trade relations between India and Russia

India and Russia have agreed to increase bilateral trade to more than $100 billion by 2030 at the 22nd annual bilateral summit. The two nations hope to achieve this by increasing cooperation in energy, infrastructure and agriculture, among other areas. Since the outbreak of the Russia-Ukraine war, India has increased its crude oil imports from Russia. Imports rose to $61.4 billion in 2023-24 from just $9.9 billion in 2021-22. India’s trade with Russia stood at $65.7 billion in fiscal 2024, with exports accounting for just about 7% of imports.

A sharp increase in the inflow of funds to investment funds

17%: This is the increase in investments in equity funds from May to June. Investments in equity funds in June amounted to ₹40,608 crore, while the assets under management (AUM) of equity mutual funds stood at around ₹27.68 trillion: Contribution from Systematic Investment Plans (SIPs) hits record high ₹21,262.22 crore, against ₹20,904.37 crore in May.

Another MGNREGS mistake?

Even though BJP is losing popularity in rural areas, the government is unlikely to change ₹In the interim budget, an outlay of Rs 86,000 crore was announced for Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), Mint reported. However, the government is open to increasing this amount later in the year if necessary. A look at previous allocation figures shows that the government’s actual spending on the program has consistently exceeded budget.

Streaming platforms accept ads

After offering premium content via subscription, Netflix and Amazon are both moving to ad-supported plans as their revenues have fallen significantly. Netflix launched its ad-supported plan in November 2022 and recently decided to discontinue its cheapest ad-free plan in the UK and Canada. Amazon has also enabled ads for all Prime Video users, asking them to upgrade to access the ad-free service. This comes at a time when video ad spending in the US has more than doubled, according to an analysis by howindialives.com.

Growing appetite for eating out

₹7.76 trillion: This is the estimated size of the food service sector in India by 2028, compared to ₹5.69 trillion in 2024, according to a report by the National Restaurant Association of India and Kantar, a market research agency. That would translate to a compound annual growth rate of 8.1%. The sector includes catering and delivery services. Millennials and GenZ, who are eating out more than ever, will drive industry growth.

Experts say GST should be cut, not income tax

While Indians are expecting income tax relief in the upcoming budget, experts believe that GST cut will be the right way to boost consumption in India, Mint analysis has shown. While income tax cuts could be a quick fix, they would only benefit a small section of the population. And since 45% of the 1,455 items are still subject to 18% GST, there is scope for reducing indirect tax to the benefit of all Indians.

Chart of the Week: More Price Pain

India’s retail inflation is expected to rise for the first time in six months on the back of a 4.9% rise in vegetable costs in June from 4.75% in the previous month, Mint survey showed. If today’s inflation data proves to be in line with expectations, it will be the highest in four months.