Jobless growth is a reality, says Care Ratings
‘Government’s infrastructure thrust will help boost jobs’
Confirming fears of ‘jobless growth’, domestic rating agency Care Ratings today said employment generation has not kept pace with GDP expansion,and termed it as a “major concern”.
Such a scenario calls for “proactive measures” from the government and the recent infrastructure building efforts will help, it noted and said “employment growth has not kept pace with economic growth”. It can be noted that the Union Labour Ministry had also conceded and set up a task force to work on the same.
“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 a situation in which an economy recovers from a recession but the jobs market does not.
From a sectoral basis, the agency said the services sector has extended some relief but manufacturing has failed to create jobs in recent times. Banks, IT, retailing, and healthcare continue to create jobs, while mining, power and telecom have saw reduction in employees, it pointed out.
The agency conducted a study of employment in the corporate sector for the last five years and asked for the findings to be taken with caution as the unorganised sector and smaller businesses account for a large share in employment generation.
“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 one percentage point per year compared to over nearly 7 per cent economic growth.
The banking sector generated the highest employment, with a 21.3 per cent share, followed by IT, mining, healthcare and textiles.
Sectors which 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, it said.
From a cost of employment perspective, Care said average salary has risen for a sample of 1,473 firms to ₹8.35 lakh in FY17 from ₹7.13 lakh in FY15.