Job creation in India Inc grows at slower pace; Banks, IT, Healthcare top employers
Banks, IT, retailing, and healthcare continue to provide increasing job opportunities while sectors like mining, power, telecom have witnessed reduction in the employees.
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Data compiled by Care Ratings for 1,473 companies highlighted that aggregate employment stood at 51,84,222 in FY17 – growing at a paltry 2.25% compared to 50,69,925 in the previous fiscal.
Five sectors namely banks, IT, mining, healthcare and textiles collectively accounted for nearly 60% of this total employment.
Banks (including both private and state-owned) hired 11,06,542 employees in FY17 versus 10,73,043 employees in FY16 and 10,34,544 employees in FY15.
However, the growth rate was lower in FY17 at 3.12% compared to the rate of 3.72% in FY16.
Similar was the case of IT and healthcare that hired 10,33,508 and 3,19,780 employees in FY17 compared to 9,76,761 and 3,03,613 employment in FY16 respectively.
Growth rate in these two sectors stood at 5.81% and 5.32% in FY17 versus 6.66% and 12.46% in FY16.
On the other hand, on year-on-year (YoY) basis, sectors which saw increases in FY17 were - textiles (3,16,798 employees), Automobiles and Ancillaries (2,28,573 employment), finance (1,86,926 employment), infrastructure (98,263 employment), chemicals (96,801 employment), hospitality (48,106 employment), logistics ( 47,419 employment) and electricals (11,421 employment).
Excluding banks, IT and healthcare the aggregate employment reaches at gradual growth of 0.29% in FY17 compared to negative 2.65% in FY16.
Care Ratings said, “In FY16, the employment growth is dragged down by decline in employment in automobile and ancillaries, mining, power and finance while in FY17, the negative employment growth has emanated from reduction in employment especially in the mining, telecom and power sector. “
Furthermore, the aggregate salaries have increased from FY15 to FY17, though salary at a slower pace in FY17 at 8.36% than that in the previous year at 11.85%.
The average salary per employee has increased consistently from Rs 7.13 lakh in FY15 to Rs 8.35 lakh in FY17.
Thus, the employment growth of India Inc has not kept pace with economic growth of the country which is growing at an average growth rate of 7%.
According to Care Ratings, this becomes a major cause of concern for a developing country like India and calls for some proactive measures. It added, 'The recent initiative by the government to push infrastructure in the country is likely to pave way for creation of jobs that might change the scenario going forward. Further, as shown in the study, growth cannot foster employment generation and has to be backed by strong investment and new business opportunities."