Home >companies >India Inc moves to smaller cities to cut costs: Assocham

India Inc moves to smaller cities to cut costs: Assocham

India Inc moves to smaller cities to cut costs: Assocham


New Delhi: Corporate India has begun to move towards tier-II and tier-III cities such as Ranchi, Meerut, Udaipur and Patiala to bring down its rising manpower and infrastructure costs in the metros, industry body Assocham said on 6 May.

In a report on “Trends of Job Openings", Assocham said the share of jobs increased to 38% in tier-III cities and 28% in tier II cities.

Of the total 60 cities that have been tracked, tier-II and tier-III cities have cornered two-thirds of new jobs created in the first quarter of this year, the chamber said.

Ranchi has emerged as the top employment provider with a share of 13.8% among tier-III cities, followed by Mangalore, Mysore, Raipur, Udaipur, Aurangabad, Patiala, Jalandhar, Meerut and Vishakhapatnam.

“A change in the job trend has been observed with emergence of small cities among the top employment generating places while traditionally the maximum of job openings used to be concentrated in metropolitan cities", Assocham president Venugopal Dhoot said.

Among tier-II cities, Pune (16.5%) and Lucknow (12.3%) were on the top in providing maximum vacancies. Ranchi (13.8%) and Mangalore (11.6%) emerged as the highest employment generating cities in the tier-III segment, the study said.

The study conducted for the period January-March 2008 also reveals that the rising demand and advantage of skilled and cheap manpower in tier-II and tier-III cities is pushing industry to look beyond the metropolitan cities that are expanding its sphere and providing large number of vacancies in these cities.

The study was based on the sample of 32,000 vacancies posted by 3,500 companies in the national and regional dailies, journals and job portals during the three months period of January-March 2008, Assocham said.

As per the study, metropolitans remain the maximum employment-generating cities for job seekers. The top four ranks were occupied by the tier-I cities, with Mumbai topping the chart with a share of 18.52% as the most prominent employment destination for the aspirants, followed by National Capital Region (15.41%), Delhi (11.55%) and Bangalore (10%), it said.

Interestingly, Pune, a tier-II city, was ranked fifth among the top 10 employment providing cities followed by Chennai, Hyderabad, Lucknow, Kolkata.

Pondicherry, a tier-III city was ranked 10 as the union territory offers infrastructure facilities that have attracted companies to set up outlets and generate job avenues.

The city has an advantage of easy availability of land, water, labour and power. It also offers facilities to the companies in terms of incentives, concessions and tax holidays attracting them to expand its sphere in the region, Assocham said.

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