Ironically, direct employment increased by 0.97 lakh sequentially during the Q1 of 2012-13 mostly in IT and textile industries as companies hired more skilled workers to replace unskilled contract workers.
The decline in contractual jobs during Q1 was more pronounced than 0.03 lakh fall in January-March. It had risen by 0.32 lakh during October-December 2011.
On a year-on-year basis, the direct employment was up by 6.92 lakh until June 2012, while it was marginally down for contract labour.
The maximum decline in employment of contract workers is observed in the automobiles sector (0.28 lakh) followed by leather (0.09 lakh), handloom/powerloom (0.04 lakh during the period June 2011 to June 2012, the report said.
While companies tend to slash contract workers whenever there is a downturn, there is a increasing trend of absorbing the productive contractual workers.
Overall employment growth in Q1 of 2012-13 was up by a measly 0.24% sequentially as companies in metals and automobile sectors cut jobs while transport, leather and handloom firms froze fresh hiring following a sharp slowdown in industrial activity.