Job'less' growth? Job growth less than half of GDP

India seems to be witnessing jobless growth in the past few years, as a new set of data shows that the employment level of India Inc has grown at half the rate of growth in national income and corporate revenues.

According to data put out by Care Ratings and analysed by DH, the employment in India’s corporate sector has grown by a compounded annual growth rate (CAGR) of 3.3% since March 2015 -- less than half of the GDP growth in the country and that of the turnover of India Inc.

Data compiled from annual reports of 1,893 companies reveals, corporate India employed 61.98 lakh people by the end of March 2019. At end of 2014-15, the same number stood at 54.33 lakh.

The GDP of India from March 2015 to March 2019 has grown by an annual CAGR of 7.6% growing to Rs 140.78 lakh crore from Rs 105.28 lakh crore.

The turnover, or the top line of India Inc, in the said period grew by 7.2%. The topline of 1,893 companies grew to Rs 84.09 lakh crore in 2018-19 from Rs 63.65 lakh crore at the end of FY15.

“Ideally, the rate of growth in employment should link with growth in GDP which is the broadest indicator of economic growth... 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,” Care Ratings said in a statement on Tuesday.

What can be more worrying is the fact that employment in the core sector has constantly declined in the past four years.

At the end of FY19, 153 companies in the four core sectors (mining, iron and steel, crude oil and construction material) employed 7.06 lakh people, down 10% from 7.8 lakh at the end of FY15 -- a CAGR decline of 2.5% sustained over the past four years. In fact, in the last four years, the core sector has seen a decline in the employment level, primarily driven by a loss of employment in the mining sector.

The sector, which has been the biggest employer among the core sectors, has seen a dip of 13% in employment over the past five years and is currently providing livelihood to 3.01 lakh people.

In yet another alarming trend, of the 32 sectors that have been profiled in the study, 12 have seen a decline in the employment levels in the past five years.

However, the silver lining has been the services sector, which has seen growth in the employment levels by 20% to 30.63 lakh at the end of March 2019, primarily driven by the demand of talent in the financial services companies (other than banks).