New Jobs On Offering: Unemployment Scare May Be Out Of Proportion
There have been things happening around the employment of people in India. There have been technological threats, jobs have been dying and it has emerged as one of the biggest threat to the Narendra Modi campaign for 2019.
But, a new study suggests that the unemployment panic may have been blown out of proportion in India. The study conducted by brokerage and investment firm CLSA has shown that jobs in the organised sector have not shown an appreciable slowdown. There is no visible slowdown in job creation in the listed space, according to the annual reports of BSE500 companies conducted by CLSA.
Employee growth stood at 4.2 percent for FY16 in an employee base of 4 million, while it was 3.4 percent in FY17, according to the study titled 'Boardroom nectar: Distilling the essence of India's annual reports'. This is in sharp contradiction to the general belief that job creation was impacted heavily in FY 16-17.
CLSA says annual reports from listed companies are a good source of employment data as high-frequency jobs data is hard to come by in India.
According to the report, IT and finance drove the bulk of organised sector job creation in the listed space. As expected, there was virtually no job creation in the PSU segment, with certain exceptions such as PNB. Staff cost, as a percentage of sales, did, however, go up by 60 bps in FY17 as revenue growth decelerated and since FY12 staff cost as a percentage of sales jumped by 320 basis points. This could revert when revenue growth picks up.
Women were the highest participants in IT and banks and lowest in materials and autos. The analysis has covered the bulk of organised segment but the numbers adding up to only 2 percent of the non-agricultural job base is the main drawback.
