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And in a misfiring economy like India’s, negative news on jobs is never really far away. SBI’s research report Ecowrap has just summed up the toll taken by the slowdown on job creation, and the new projections appear to be a major party pooper: as per its findings, 16 lakh less jobs will be created in FY20 compared to a year ago.
One look at the report makes it clear that the lack of jobs remains very much the same anathema that it has been for much of the last couple of years. Which means that if this Budget were to have any realistic chance of engineering a turnaround, then finding a way to bring back the jobs must feature among Sitharaman’s primary tasks this year.
ET readers thought so too. In our pre-Budget survey, a huge chunk (46.4%) of the participants said it’s jobs that the FM needed to prioritise above all else in this Budget.
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This year’s ET Online Poll featured two direct questions on jobs, or rather the lack of it. One of them — the one mentioned in the above para — returned unequivocal results as to what the most pressing concern for Sitharaman was. The other — “What is the one move that can make Budget 2020 a super hit” — also underlined how grave a matter unemployment has become, with more than a third of all respondents saying a fix for the jobs crisis would be the one move that can make Budget 2020 truly special.
No country for jobseekers
Ecowrap revealed that during April-October 2019, the actual number of new jobs generated was 43.1 lakh which, when annualised, comes to 73.9 lakh for the whole of FY20. This compares poorly to last year’s figures, which as per EPFO data stood at 89.7 lakh new jobs.
This year’s data clearly indicates a fall in the number of jobs created in the government sector, too. This fall adds to the country’s already serious job woes — last year’s unemployment rate was the highest in 45 years — raising the heat on a government grappling with the worst growth in a decade.
The job crisis has had the most severe impact on semi-skilled or unskilled manual labour, commonly called blue-worker workers. Sector-wise, auto has been hurt the biggest, followed by construction and export sectors. The delay in resolution of IBC cases may have forced many companies to cut down on contractual labourers, Ecowrap has found.
White-collar, skilled employees have been affected too, but to a lesser extent compared to blue-collar ones. This category has been hurt primarily by factors such as lower/nil salary hikes and lack of job-change options.
BCCL
The worsening employment scene is likely to hit Indian economy in a number of ways. The most noticeable one among these would be the likely blow to GST collections. The figures reveal a fall in the level of formalisation in the economy. For FY20, the number of jobs created in the formal sectors accounts for 9.5% of the total jobs created, a slip from 11% a year earlier. This could impact GST mop-up, meaning the govt could have a tough time with the Rs 1.1 lakh crore target that it expects to meet.
A better 2020? Hope floats
There is hope, based on a number of factors.
First, Modi govt is putting in serious efforts to revive construction, which is one of the biggest job generators. Results could be visible soon.
Second, a likely thaw in Trump’s trade war could be a wind in the sails of global trade. That could give India a significant boost in export sector jobs.
Third, there are signs that the troubled financials sector could be finally back from the brink in 2020. If that happens, it would be a great news for the jobs arena.
And last but not least, on February 1, Nirmala Sitharaman might actually find a way to give the economy a much-needed fiscal stimulus.
Will the FM bite the bullet, come Budget day? Your guess is as good as ours.
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