Job creation unlikely to pick up soon, courtesy weak exports2 min read . Updated: 11 Dec 2015, 03:07 AM IST
Number of jobs fell by a net 43,000 in April-June; exports in that quarter contracted 16.75% y-o-y to $66.7 billion
New Delhi: A revival in job creation at India’s manufacturing and export-oriented sectors is unlikely soon, thanks to the lingering contraction in exports.
Job creation fell by a net 43,000 in three months ended 30 June from the previous quarter, said the 26th quarterly employment survey conducted by the labour ministry. The net fall in jobs created was the lowest since April-June 2009 (131,000) when global economic crisis was at a high, said the employment data.
India’s merchandise exports contracted for the 11th consecutive month in October as shipments of petroleum products continued to decline on lower crude oil prices, and external demand remained weak amid tepid global economic recovery, according to commerce ministry data.
In October, exports contracted 17.5% from a year ago to $21.3 billion, while imports shrank 21.2% to $31.1 billion, Mint reported on 16 November. The last time exports registered a positive growth was in November 2014 when it expanded 7.27%.
Since India’s exports are not growing, the impact on the job market may continue to be felt in subsequent labour bureau surveys.
Of the 43,000 net fall in jobs, export-oriented companies reported a decline of 26,000 and the rest were contributed by the non-export oriented companies. During the same quarter, merchandise exports in India contracted 16.75% year-on-year to $66.7 billion, according to the commerce ministry data.
When the quick quarterly employment survey was started in October-December 2008 by the labour bureau during the peak of global economic crisis, Indian factories reported a “net decrease in employment" by 500,000 jobs.
The quarterly survey was started then to gauge the impact of global economic crisis on India’s job market. The subsequent quarter (January-March 2009) witnessed a “net decrease in employment" by 117,000, according to the labour ministry data.
Since then, the labour bureau that functions under the labour ministry has been surveying eight key sectors of textiles, automobiles, leather, metals, gems and jewellery, transport, information technology (IT)/business process outsourcing (BPO), and handloom/powerloom sectors.
In April-June 2015, textiles sector jobs decreased by 17,000 and automobile industry jobs by 18,000. Similarly, IT/BPO sector jobs went down by 5,000, handloom jobs by 6,000, gems and jewellery by 3,000 and transport jobs by 2,000, according to the 26th quarterly survey.
The metal sector did not add any new jobs and the leather sector created 8,000 new jobs. What is surprising is that employment in the textiles and IT/BPO sectors, which has been the lead job creators in the past one year, slumped in April-June, Mint reported on 9 December.
What is surprising is employment in the textiles and IT/BPO sectors, which has been the lead job creators in the past one year, slumped in April-June, Mint reported on 9 December.
According to Sandeep Kanwar, chief executive officer at Gurgaon-based business consultancy firm Paradigm Business Advisory, job creation, an outcome of new projects and investments, and economic growth move in tandem.
“Big manufacturing industry promoters are waiting to get a clearer picture on GST (goods and services tax) after which more investment will happen. Since, projects and investments are on hold, job creation is sluggish in the export- and manufacturing-oriented companies," said Kanwar.