Employment generation in eight key manufacturing and services sectors during the first quarter of the current fiscal (April-June 2012) slumped to its lowest in the last three quarters, with contract workers taking a bigger hit as compared to regular employees.
Employment generation in the eight sectors was up by a mere 0.24 per cent, or 0.73 lakh, on a sequential basis in the latest reported quarter, according to the Labour Bureau’s Fifteenth Quarterly Report on the ‘Effect of Economic Slowdown on Employment in India’. While job creation in sectors of metals and automobiles declined marginally in the first quarter of the fiscal by 0.04 lakh and 0.05 lakh, there was a virtual hiring freeze in other sectors such as leather, handloom and transport.
But sectors such as textiles (0.50 lakh), gems and jewellery (0.05 lakh) and IT and BPO (0.27 lakh) have registered a marginal rise in employment, the first quarter survey revealed. Even on a cumulative basis, job creation moderated to 6.94 lakh in the 12 months ending June 2012, as against 8.37 lakh at the end of the March 2012 and 9.29 lakh in the third quarter of last fiscal.
“This is a direct outcome of the slowdown in economic growth. But the moderation in employment generation has been greater than the moderation in GDP growth, indicating that businesses are of the view that growth is yet to bottom out,” said Sunil Sinha, head of economic research and senior economist at rating agency Crisil. First quarter GDP growth was at a decade low of 5.5 per cent pulled down by the manufacturing, mining and quarrying sectors. With industrial performance still sluggish, finance minister P Chidambaram recently scaled down his growth projection for 2012-13 between 5.5 per cent and 6 per cent as against the Budget estimate of 7.6 per cent (+/- 0.25 per cent).
Infact a recent survey by industry chamber Ficci also revealed that companies are gearing up for jobless growth. “ ...net responses with regard to prospect of employment opportunities has turned negative, the first time since the 2008-09 crisis. Thus, the current economic slowdown coupled with a negative growth