India's job growth slowed to 1.1 per cent as economy grew 7 per cent in 2016: report

19 May 2017

India's job market grew at a slow pace of 1.1 per cent in the year 2016 even as the economy grew an above 7 per cent annual rate, a sign that points to jobless growth in a country where thousands are searching for jobs, and several thousands more from colleges and other institutions are joining the ranks.

While the GDP growth of the economy at 7 per cent over the years is considered a positive sign for India country, the country performed disappointingly on the job creation front last year. Obviously, the BJP government that came to power in 2014 with the promise of providing jobs for all failed to keep its promise.

These figures were revealed in a recent report that covered eight key sectors of the non-farm economy.

This, combined with an earlier report that had shown joblessness of 5 per cent in 2015, could pose more problems with reports of possible mass lay-offs in the key information technology and BPO sectors.

Besides, last year's report had pointed to a high level of underemployment at 35 per cent of the work force over a 15-year period.

Clearly, the economic reforms the government follows are pro-capital and do not seem to be providing a solution to the crucial area of employment.

The report, based on the annual surveys conducted by the Labour Bureau, which tracks quarterly survey conducted among 10,000 field units.

The current survey, which began in April last year, had replaced the earlier method which also covered certain sectors related to exports.

The job market in the country has recently seen major job losses in the important sectors such as IT and BPO. The new visa restrictions imposed by the US, a major client for these sectors, and the slowdown around the globe in IT services are seen as major reasons behind such cuts.

The current scenario of the job market can also be seen in the light of other indicators which have an effect on it. Such as the gross credit provided to industry, which directly relates to the capital that businesses can invest in their plans, grew by just 6.7 per cent in the past three years whereas the index of industrial production grew by 6 per cent.

Also, growth in fixed capital formation increased by just 0.6 per cent compared to 6.1 per cent last year. In all, 2.3 lakh jobs were added to the sectors included in the survey: manufacturing, construction, trade, transport, accommodation and restaurants, IT / BPO, education and health. Of these, almost half were added in education and health, which are traditionally considered to be low-paying sectors.

On the other hand, sectors such as construction and hospitality/food sectors showed loss of jobs, with the former showing a fall of nearly 7 per cent.

Other than the low growth of jobs, another worrying sign in the Labour Bureau's report is under-employment or concealed unemployment. These basically mean not finding work for a year and work for very low wages. Out of the total workforce, only 61 per cent were found to have jobs for the whole year and 34 per cent worked between 6 to 11 months though they wanted to work for the whole year.

According to the report, 68 per cent of the households had Rs10,000 per month or less in annual earnings while almost 160 million people of the workforce were underemployed.

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