No matter who you are and where you go, at this point in time, if you happen to pull aside anyone- whether a corporate executive, a student of engineering, a rabble-rouser raising slogans in support of Kashmir, a simple housewife or an industrialist who’s just signed on a new deal, everyone will give his or her fiercely independent views about the state of the country’s economy and without the smallest of doubts, would offer some insights about the state of the employment growth in India.
Because, quite honestly, that is what it takes; different strokes to make different notes about a common topic. But in reality, if you were to ask the horse’s mouth about the state of the employment growth in India, what are the chances of hearing something positive?
So what’s happened, you are ought to ask?
It appears that the state of employment growth in India slowed over the course of the past two years, with job creation growing at around 3.9% during 2017-19, when compared to only 2.8% in 2018-19.
These numbers were reflected in a study conducted by the agency CARE ratings.
But the study, in itself, was an exhaustive exercise that covered no fewer than 1,938 companies in all, that were spread into various industries (or segments). Furthermore, the study also furnished an important fact:
It shared that the total sales generated in FY 2019 were of the value of INR 69 lakh crore, thus covering the entire corporate sector. But at the same time, it is important to note that while the SME sector may not have found a lot of representation in the study, the findings covered all listed public sector enterprises.
In terms of growth in employment on an annual basis, it was 2.5% in 2015-16 and 4.1% in 2016-17.
If you try to understand the greater picture, then the following comes to the fore:
Therefore, there is a case that supports the argument that employment growth has not been commensurate with GDP growth with a difference of 4.2% in CAGR during this period.
The Economic Times highlighted some key findings from the said study, sharing the following:
It showed that around half the companies had witnessed a decline in growth in employment over this time period while 35% of them had witnessed a growth of 11.5% on the aggregate each with an above average CAGR of 3.3%.
That said, among the industries that did not paint a positive picture in terms of employment growth in India are the heavy investment industries, where the growth tended to be largely negative for capital goods and power goods.
There were certain positives to draw from the sphere of the IT and Retail sector industries that registered near or above average growth while the auto and the healthcare sectors experienced a healthy growth rate of nearly 4.8%.
That said, where the realty sector stood, then the decline in growth of business directly impacted the job prospects. ET also shared the following:
The CAGR in employment and growth in physical production for industries in the manufacturing sector are not well related,” CARE Ratings concluded.