The employment growth of 3.8% in FY18 for the samples covered has been much slower than the 6.7% economic growth achieved in FY18.
Even as India clocked a good growth of 6.7% in the financial year 2018-19, job creation by corporate India dropped to just 3.8%, which can be seen as confirming fears of jobless growth in the country, news agency PTI reported quoting a Care Ratings.
The report said that the employment growth of corporate India moderated to 3.8% in FY18 from 4.2% in FY17, with smaller companies creating fewer jobs than the previous year. “The employment growth of 3.8% in FY18 for the samples covered has been much slower than the 6.7% economic growth achieved in FY18, reflective of the proposition that higher economic growth is weakly translating into higher job creation,” Care Ratings said in the report.
It was former labour minister Bandaru Dattatreya who had used the term ‘jobless growth’ in May last year, which reflected higher GDP growth but a lower job creation. Over the year, many economists have echoed the worry over job creation not keeping pace with the country’s growth, while the government has blamed the lack of comprehensive employment data to ascertain ‘real’ job creation in the economy.
The Care Ratings report, based on an analysis of over 1,600 corporates, said that the smaller companies, with net sales of less than Rs 500 crore, have witnessed a contraction in employment growth, while larger companies, with over Rs 500 crore sales, had a positive employment growth in FY18.
“The moderation in overall employment growth at 3.8% in FY18 compared with an employment growth of 4.2% in FY17 could in part be attributed to 50.3% of companies witnessing negative growth and unchanged employment growth over the preceding year,” the report said.