Small contractors, security cos create bulk of jobs in May

NEW DELHI: Many of the new jobs created in India’s formal sector are low-paid and temporary work, offering little job security or upward mobility, official payroll data showed, raising questions over its long-term socio-economic implications.

Employees’ Provident Fund Organisation (EPFO) data for May showed that maximum jobs were created in the ‘expert services’ category comprising manpower agencies, private security firms and small contractors, while established sectors such as engineering, financial establishments, and construction sectors lagged behind.

In the 18-25 age group, almost 59% of net payroll additions in May came from expert services. Of the net addition of 345,000 new hires across 10 top industry segments, the category contributed over 200,000, with the rest spread across the other nine sectors.

While the expert services category added 83,903 people in the 29-35 age group, the ‘trading and commercial establishments’ category added 8,500 employees in the same age cohort, textiles sector 5,800 employees and building and construction firms added 7,478 workers. In this age bracket, the contribution of expert services was slightly more than 60% of the total payroll additions of 139,532. The trend is a continuation from April when expert services contributed 101,349 out of the total of 173,797 people joining formal work in the 29-35 age group.

The trend is almost similar across several age groups, prompting labour economists to say that decent, well-paid jobs are missing from the market, and the formal sector additions may be happening in low-paid and contractual works.

K.R. Shyam Sundar, a labour economist and professor at XLRI Jamshedpur, said the sectoral details indicate a changing labour market.