Can’t blame coronavirus for India’s job misery; employees’ growth halved in last fiscal too

Can’t blame coronavirus for India’s job misery; employees’ growth halved in last fiscal too

jobs, employment, economy, industry, unemploymentThe realty sector has come as a surprise as it has been through tough times post-implementation of RERA.

While the coronavirus deepened the employment woes in India, the country’s job situation was already miserable in the previous year as well. The growth in the number of employees fell from 4.1 per cent in FY19 to 2 per cent in FY20, according to a report by Care Ratings. In absolute terms, the headcount moved from 61.6 lakhs in FY18 to 64.2 lakhs in FY19 and 65.4 lakhs in FY20. Further, given the pandemic-induced lockdown in the current fiscal year, the employment picture in the current financial year FY21 would be even worse, the report added. It is to be noted that the report is based on the data received from 1,703 companies spread across various industries.

On the brighter side, the segments which witnessed growth in jobs in both the years were banks, electricals, FMCG, insurance, finance, IT, and realty. The realty sector has come as a surprise as it has been through tough times post-implementation of RERA. However, the growth rate had slowed down for the sample companies in this industry from 9.7 per cent to 4.4 per cent.

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The lockdown affected several industries, especially in the services segment and the non-essential category within manufacturing. With the first two months of the fiscal year being virtually closed, companies had to relook at their staff strength. While layoffs were announced by several companies, others had put on hold their plans on further recruitment as there was uncertainty on the issue of when production would begin. Under these conditions, Care Ratings estimated that the growth in overall job creation could slow down this year as even after 7 months have passed, there is still very limited activity in services like hotels, entertainment, tourism, etc. 

In addition, the job growth in other sectors such as infrastructure will largely depend upon the government’s effort to start new projects. Meanwhile, the top 5 sectors accounted for nearly 60 percent of the total headcount in the corporate sector in FY20. The dominance of IT and banking was visible with close to 39 per cent being employed in these two sectors. Further, the IT and BFSI segments are expected to show accretions in their staff headcounts this year too.

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