Confirming fears of a ‘jobless growth’, domestic rating agency Care Ratings said employment generation had not kept pace with GDP expansion, terming it a “major concern”.
Such a scenario called for “proactive measures” from the government and the recent infrastructure building efforts would help, it noted and said, “employment growth has not kept pace with economic growth”.
The Union labour ministry had also admitted to the problem and had set up a task force. “The current growth is a jobless growth. Many European and Asian countries, including India, are facing it…growth is being reported but it is not reflecting in employment generation,” the then labour minister Bandaru Dattatreya had said in May this year.
A jobless growth is a situation in which an economy recovers from a recession but the employment market does not. From a sectoral basis, the agency said the services sector had extended some relief, but manufacturing had failed to create jobs in recent times. Banks, IT, retailing and healthcare continue to create jobs, while mining, power and telecom have seen a reduction in employees.
The agency, which conducted an employment study in the corporate sector for last five years, asked for the findings to be taken with caution because the unorganised sector and smaller businesses accounted for a large share in the generation of jobs. “It is however believed that these numbers are broadly indicative of the trends witnessed in the last two years,” the report said.
Aggregate employees in 1,473 companies grew to 5.18 million in FY17 from 5.01 million in FY15, a growth of a little over 1 percentage point per year compared to over nearly 7 per cent economic growth. Banking is the highest among sectors when it comes to generating employment, with a 21.3 per cent share, and is followed by IT, mining, healthcare and textiles.
Sectors that witnessed a fall in employment in FY17 from the previous fiscal included fast moving consumer goods, media and entertainment and paper. Crude oil, infrastructure, trading, automobiles and ancillaries, finance and hospitality, which had recorded negative growth in employment in FY16, also witnessed growth in FY17, the report said.
From the cost of employment perspective, Care said the average salary had risen for a sample of 1,473 firms to Rs 8.35 lakh in FY17 from Rs 7.13 lakh in FY15.