India's job market grows by just 1%
In what is sure to be bad news for those searching for jobs in the country, including the thousands of graduates passing out of colleges, the country performed disappointingly on the job creation front last year.
While the growth of the economy at 7 per cent over the years is considered a positive sign for India, it witnessed the job market increase by just 1.1 per cent in the last year. And the current figures would be considered a major setback to the BJP government which came to power in 2014 and had made providing jobs one of the key promises during its campaign.
The current numbers were revealed in a recent report released which covered eight key sectors of the non-farm economy. While an earlier report had shown the joblessness of 5 per cent in 2015, which was a five-year high. It had also reported under-employment at a 35 per cent of the labour force over a 15 year period.
This brings into focus the challenge the current government is facing as the various initiatives by the current administration do not seem to be providing a solution to the crucial area of employment.
These reports are based on the surveys conducted by the Labour Bureau. While the figures related to unemployment are recorded in an annual survey involving 7.8 lakh people, the growth in jobs is tracked by a quarterly survey conducted among 10,000 units. The current survey which began in April of last year had replaced the earlier method which also covered certain sectors related to exports.
The job market in the country has recently seen major job losses in the important sectors such as IT and BPO. The new visa restrictions imposed by the US, a major client for these sectors, and the slowdown around the globe in IT services are seen as major reasons behind such cuts.
The current scenario of the job market can also be seen in the light of other indicators which have an effect on it. Such as the gross credit provided to industry, which directly relates to the capital that businesses can invest in their plans, grew by just 6.7 per cent in the past three years whereas the index of industrial production grew by 6 per cent. While another important aspect, the growth in fixed capital formation increased by just 0.6 per cent compared to 6.1 per cent last year.
In all, 2.3 lakh jobs were added to the sectors included in the survey: manufacturing, construction, trade, transport, accommodation and restaurants, IT/BPO, education and health.
Of these, almost half were added in education and health, which are traditionally considered to be low-paying sectors. While the sectors of construction and hospitality/food sectors showed loss of jobs, with the former showing a fall of nearly 7 per cent.
Other than the low growth of jobs, another worrying sign in the Labour Bureau's report, came in the form of under-employment or concealed unemployment. These basically mean not finding work for a year and work for very low wages.
Out of the total workforce, only 61 per cent were found to have jobs for the whole year and 34 per cent worked between 6 to 11 months though they wanted to work for the whole year. And according to the report, Rs 10,000 per month or less was the earnings of 68 per cent of households and almost 16 crore people of the workforce were underemployed.