Unemployment estimates for the first quarter of the financial year show a total of 1.71 lakh job losses, and the spectre loomed over most sectors, according to a study by the Labour Bureau. Buttressing this is data that shows withdrawal requests from the Employees? Provident Fund Organisation (EPFO) between April and June touching a record 31.51 lakh, indicating large-scale layoffs as well as a severe cash crunch among workers.
The textiles industry was worst hit, shedding 1.54 lakh jobs, followed by IT/BPO (34,000). The gems & jewellery sector reported 20,000 job losses, although, ironically, some employers reported worker shortages. Overall employment across the eight sectors surveyed?including metals, leather, automobiles, transport and handloom/powerloom?dipped by 1.31 lakh.
Exporting units remained badly hit. Across all sectors, employment in these units fell by a sharp 1.67 lakh. Non-exporting units across all but three sectors (textiles, transport and handlooms) saw total employment increase by 35,000.
Some sectors did see a recovery of sorts, though they preferred hiring contract workers rather than full-time workers. The handloom/powerloom sector created 49,000 new jobs, followed by automobiles (23,000) and leather (7,000). Overall, contract-worker employment went up by 40,000.
Though employment numbers are typically released only once a year, in the Annual Survey of Industries, the Labour Bureau initiated quarterly employment surveys to study the impact of the global slowdown on India. The first survey revealed 5 lakh job losses between October and December 2008, the first quarter after the worldwide economic meltdown.
In the January-March 2009 quarter, employment in export-oriented sectors like gems & jewellery, textiles, apparel and IT/BPO increased by a marginal 20,000, compared with the earlier quarter, in which leather, metals and transport sectors reported reductions of 0.4-2.8% in their workforce.
?In just the first quarter of 2009-10, the Employees? Provident Fund Organisation (EPFO) received 31.51 lakh withdrawal claims, almost equal to the total number of claims received in 2006-07. This means there may be some recovery, but we need to be vigilant,? a senior government official said.
In 2008-09, EPFO received a record 98 lakh-plus withdrawal requests, most of them filed after September 2008. The EPFO covers 5% of India?s 400-million strong workforce and has close to 5 crore PF accounts. However, many workers have multiple PF accounts due to the changing nature of the job market in the last two decades.
Explaining the worker shortages reported by textiles and gems & jewellery units, a senior labour ministry official said, ?Typically, migrant workers go back to their home towns from April to June. The advent of NREGA and an uncertain outlook for their employers? order books has led to a greater skill shortage this time. That?s why gems & jewellery workers? average earnings went up by 4.68%, as they were paid more overtime.?
The construction sector, which has been one of the worst hit, may see some signs of recovery after fresh sops from finance minister Pranb Mukherjee. But the labour ministry?s attempts to quantify job losses in the sector through a separate survey have failed.
?The manner in which construction workers are employed is so complex that there is no employer to be identified on the ground. But using employment elasticity and the sector?s growth, they have concluded that at least 5 lakh jobs have been lost in construction alone,? a senior labour ministry official told FE.