Job creation shows upswing,grows 9% in eight key sectors

* 1.68 lakh jobs created during July-December 2012,says a Labour Bureau survey

Written by Anil Sasi | New Delhi | Published: April 1, 2013 1:06:40 am

Employment generation in eight key manufacturing and services sector grew by over 9 per cent between July and December 2012 compared to the first half of 2012,indicating that green shoots may indeed be taking root in the economy.

Though signs from other economic data like industrial output and exports are less optimistic,economists suggest that there’s usually a lag before more hiring translates into a spurt in production.

A bi-annual survey of the Labour Bureau revealed that 1.68 lakh new jobs were created in the eight sectors in the six months to December 2012 as against 1.54 lakh jobs added during January to June 2012.

Prior to this,the highest number of jobs in the eight selected sectors were created in the second half of 2011 at 5.41 lakh,as seen in the table.

But even though companies may have begun to hire more,they seem unwilling to bet on the long term business prospects and are hiring more contract workers.

The survey results show that contract labour hiring showed a positive growth of 0.59 lakh after declining by 0.27 lakh in the first half of the fiscal. Meanwhile,1.09 lakh new regular workers were employed in the eight sectors between July to December 2012,as against 1.81 lakh in the first six months of the year.

“Contract workers can be brought in to meet requirements as and when necessary. But for hiring regular workers,companies must be confident about their long term business prospects,” said an industry expert. “With the global economy still in choppy waters and investors wary of domestic policy uncertainties,companies are scared of taking on such long-term bets,” he added.

NR Bhanumurthy,an economist with think tank NIPFP believes that the data is in sync with other macro-economic indicators such as exports and industrial production that are now beginning to see a minor upturn.

“Employment is one of the leading indicators of growth. An upturn in hiring is reflected in production with a lag of about two quarters. So the data may be providing some indication of a turnaround in the economy that the finance ministry has also been predicting,” he said.

While the Central Statistics Office has forecast a 5 per cent growth for 2012-13,the finance ministry had contended that growth would be higher as several indicators such as the Purchasing Managers’ Index for manufacturing,moderation in inflation and higher indirect tax mop up point to “early sign of an upturn in the economy”.

For 2013-14,the government has pegged economic growth between 6.1 and 6.7 per cent.

The Labour Bureau survey covered a total of 2,514 units in eight sectors – textiles,including apparel,leather,metals,automobiles,gems and jewellery,transport,IT and BPO,and handloom and power-loom. 

The IT / BPO sector registered the highest increase in employment at 0.64 lakh during the reference period,followed by textiles sector where 0.50 lakh jobs were added. Gems and jewellery was the only sector that witnessed a marginal decline in employment of 0.03 lakh in December 2012 over June 2012. 

The survey further noted,“In the previous quarterly surveys results,the increase in employment under the exporting units was considerably higher than the non-exporting units. However,in the present survey,in exporting units the increase in employment is more or less same as observed in non-exporting units.”

While employment in exporting units has risen by 0.80 lakh in the period under review,it has increased by 0.88 lakh in non-exporting units in December 2012 as against June 2012.

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