Unemployment rate lowest in Karnataka

Karnataka, which is home to India’s tech hub, has emerged as a beacon of hope for job creation amid rising unemployment across the country.

The state has seen its unemployment rate decline to 0.7% — the lowest in the country — for the month of August, according to data available with the Centre for Monitoring Indian Economy (CMIE).

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

The current rate of unemployment in the state is only a fifth of the level witnessed in January 2017, when it had peaked to 6.7%. Experts attribute the phenomenon to the growing demands of the information technology (IT) industry, which has been the largest contributor to job creation in the state.

The IT sector, largely concentrated in state capital Bengaluru, has been on a hiring spree with 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 making it a magnet for corporates,” said Lohit Bhatia, president, Workforce Management at Quess Corp.

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,” said Kris Lakshmikant, MD, Head Hunters India.

The only other state which has seen a decline in unemployment levels is neighbouring Goa. The state saw 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 rate isn’t even one-tenth of the national levels that stood at 8.2%, according to CMIE data. The country has of late been grappling with rising unemployment, which has taken a toll on consumption levels across the industry.

Auto woes hit Haryana

Election-bound Haryana has the highest level of unemployment in the country, owing to the slowdown in 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 a daily basis, with the auto industry being the backbone.

According to estimates, around one million contractual jobs have been lost in the auto industry this year.

“Auto sector woes have definitely contributed to the rising unemployment in Haryana. The difference between Tamil Nadu and Haryana is that a majority of workforce in Haryana is contractual and easy to lay off,” said Lakshmikant.

The other states with high unemployment levels include Tripura (27.9%), Jammu and Kashmir (22.4%) and Himachal Pradesh (19.2%).