Karnataka gives hope amid national employment crisis

Last Updated 25 September 2019, 01:30 IST

Karnataka, which is home to India's tech hub, has emerged a beacon of hope for job creation amid rising unemployment around the country. The state has seen its unemployment rate decline to a mere 0.7% -- lowest in the country -- for the month of August, according to the data available with Centre for Monitoring Indian Economy (CMIE).

It is the only state among large states in the country which has seen a decline in its unemployment rate in the last few months.

The current rate of unemployment in Karnataka is only a fifth of the level seen in January 2017, when it had peaked to 6.7%. The experts attribute the phenomenon to the growing demands of the IT industry -- which has been the largest contributor to job creation in the state.

The IT sector, which is largely concentrated in the state capital, Bengaluru, has been on an hiring spree with their headcounts showing an unprecedented increase in the last financial year. Over one million workers are employed by the IT sector in Bengaluru alone.

"The services sector including the startup ecosystem of Karnataka has a great role to play. While the state has a manufacturing base, it also benefits from IT, startups and services in equal measure. Conducive work environment, colleges in both IT and non-IT and its metro culture attracts talent from all over India thus becoming a magnet for corporates," Lohit Bhatia, President, Workforce Management at Quess Corp said.

The services sector, that includes the IT services vertical as well, contributes over two-thirds to the state's gross domestic product.

"The statistics about relatively low employment among Indian states speaks about the turnaround in IT industry hiring. Bengaluru being the Silicon Valley of India has benefited most globally due to the Digital Transformation Revolution which has shaken up the industry," Kris Lakshmikant, MD, Head Hunters India said.

The only other state which has seen decline in the unemployment levels has been the neighbouring state of Goa. The state has seen its unemployment rate decline to 3.7% in August, from 12.4% in February 2017.

The other states having lower degree of unemployment are Meghalaya (1.6%), Sikkim (2.1%) and Telangana (2.4%).

Karnataka's unemployment isn't even one-tenth of national levels that stood at 8.2%, according to the CMIE data. The country has been grappling with rising unemployment of late, which has taken toll on the consumption levels across the industry.

Auto woes hit Haryana

Meanwhile, the election-bound state of Haryana has the highest level of unemployment in the country, owing to the slowdown in the automobile sector. The state has an astounding unemployment rate of 28.7% at the end of August jumping 16-fold in the past two years – from 1.8% in August 2017.

Haryana has long been India’s automobile hub with a massive presence of Maruti Suzuki and Hero MotoCorp. The state is known to generate huge number of contractual jobs on the daily basis, with auto industry being the backbone of it. According to the estimates, around one million contractual jobs have been lost in the auto industry this year.

“The auto sector woes have definitely contributed to the rising unemployment in Haryana. The difference between Tamil Nadu and Haryana is that the latter has majority of its workforce that is contractual and easy to layoff,” Lakshmikant added.

The other states to have high degree of unemployment include Tripura (27.9%), Jammu and Kashmir (22.4%) and Himachal Pradesh (19.2%).

According to the industry estimates, close to 90% of the workers in auto industry in Haryana are contractual, while the thing is vice versa in Tamil Nadu.

(Published 25 September 2019, 01:30 IST)

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