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    Jobs growth slows in past 2 years, core companies hit hard

    Synopsis

    Job creation has slipped to 2.8% in 2018-19 as compared to 3.9% in 2017-18 according to CARE Ratings. The ratings agency highlighted that core industries have witnessed “virtually negative growth in headcount”, impacted by the slowdown in GDP growth as well as the challenges on the NPA.

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    New Delhi: The pace of employment growth in India slowed in the last two years with job creation growing at 3.9% in 2017-18 and 2.8% in 2018-19, a study by ratings agency CARE Ratings showed.

    Based on a set of 1,938 companies spread across sectors, the study said the value of sales in FY19 was Rs 69 lakh crore, thus covering the entire corporate sector. It includes all listed public sector entities but the SME segment may find less representation in this sample.

    As per the study, the aggregate headcount or employment increased at a CAGR of 3.3% over a four-year period from 2014-15 to 2018-19 compared with a CAGR of 7.5% in gross domestic product (GDP) during this period.

    Growth in employment on an annual basis was 2.5% in 2015-16 and 4.1% in 2016-17. The Periodic Labour Force Survey (PLFS) released in May showed the unemployment rate at 6.1% in FY18, a 45-year high, but the government said this was not comparable with earlier years because of the change in methodology.

    “Therefore, there is a case that supports the argument that employment growth has not been commensurate with GDP growth with a difference of 4.2% in CAGR during this period,” the study showed.

    It showed that around half the companies had witnessed a decline in growth in employment over this period while 35% of them had witnessed growth of 11.5% on the aggregate, each with an above average CAGR of 3.3%.

    CORE WORRIES

    The ratings agency highlighted that core industries have witnessed “virtually negative growth in headcount”, with crude oil just about maintaining the employment level. These industries have been impacted by the slowdown in GDP growth as well as the challenges on the NPA side for banks.

    A similar picture is seen for the heavy investment industries where growth has tended to be negative for power and capital goods, and just 0.4% for infrastructure.

    However, consumer-oriented industries showed a varied patter.
    (Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times.)

    6 Comments on this Story

    Anil 311 days ago
    Make in India effect. Nitiayog effect. Free tax payers money can be experimented even to buy votes. Indians must enjoy the effect for their wisdom in election. But don’t u think world in recession? Only the best survives in this situation. Countries like Japan, China, USA and Germany have little effect but u need to visit abroad to see where we stand. We are No 1 in world in cheap labour and Professional export rest is like .....
    Ravie Gupta311 days ago
    only idiots can think that job growth should be at par with GDP growth. in normal cases it should be half of GDP growth, as half of growth will always comes from increase in efficiency.
    Prithvi Chauhan311 days ago
    Strong LABOUR Laws is needed, so that employee cannot be sacked easily for no reason.
    Top management, board members take hundreds of crores every month as SALARY, and they sack employees in the name of RESTRUCTURING
    The Economic Times