Survey finds hiring in formal job market stagnant; data shows jobs lost not high either as unemployment rate fell to 5.29% in May from 5.64% in April.
Hiring in India’s formal job market remained stagnant even as growth accelerated at the fastest pace among the world’s biggest economies.
A survey of 5,110 employers conducted by Manpower Group found 16 percent planned to increase their workforce in the quarter ending September. It includes companies in the formal sector, who employ 10 or more workers. Data on India’s informal labor market, which employs the majority of its workers, is limited.
“Major trends that will drive recruitment in 2018 in India are diversity, automated recruitment, virtual reality, remote working options,” AG Rao, group managing director of Manpower Group India said in a statement Tuesday. The service sector and wholesale and retail trade are expected to have the strongest outlook, with 20 percent of respondents saying they planned to hire in the September quarter.
Prime Minister Narendra Modi’s government is counting on high levels of economic growth to deliver jobs before the country heads for elections in 2019. Gross domestic product growth has accelerated in each of the last four quarters, hitting 7.7 percent for the quarter ending March.
Before sweeping to power in 2014, Modi appealed to young job-seekers with a promise to create 10 million jobs. Four years later it remains unclear how many positions have been created. More than 12 million Indians enter the workforce every year, government data show.
Though the rate of hiring isn’t increasing dramatically, neither are large numbers of jobs being lost, data indicates. The unemployment rate fell to 5.29 percent in May from 5.64 percent the previous month, data compiled by Center for Monitoring Indian Economy show, which is the lowest since January. India does not have official government data on unemployment available for 2018.
“A large part of the acceleration in recent quarters comes from increased public administration spending,” said Mahesh Vyas, chief executive officer at CMIE. “This is not sustainable and so there are inherent limits in the nature of the current growth.” – Bloomberg