India's Job Crises - India’s journey from jobless to job-loss growth l Updates, News & Discussion

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India’s journey from jobless to job-loss growth
Sneha Alexander
India’s economic growth has moved from not just being a jobless regime but to being a ‘job-loss’ one, suggests new research. In a study published in the Economic and Political Weekly, K.P. Kannan and G. Raveendran break down the latest Periodic Labour Force Survey (PLFS) findings to suggest that the Indian economy is losing its ability to absorb new entrants to the work-force with less-educated rural women suffering the most.

Combining historical National Sample Survey (NSS) employment data with the recently-released PLFS survey, the authors find that the ability of the Indian economy to absorb its growing working-age population has been steadily decreasing. In 2004-05, 58% of the population entering the workforce in the previous two decades were absorbed into the workforce but by 2011-12 this figure had fallen to 15% in 2011-12. In 2017-18, this figure turned negative (-5%) suggesting that some of the working-age population actually left the workforce. And all this has happened even while India recorded positive aggregate growth.

They estimate that the economy lost 6.2 million jobs between 2011-12 and 2017-18. Breaking down jobs by location, gender, education and sectors, they find that it was mostly the less educated (below secondary level) who lost jobs. Within this cohort, it was rural women who suffered the most (rural women's employment fell by 24.7 million).

Sectoral analysis of the data shows that the net job loss stems from losses in sectors such as agriculture, quarrying, mining and manufacturing. Taken together, job losses in these sectors accounted for 95% of the total job loss. According to the authors, this jobs crisis is a result of several structural and policy failures in agriculture, rural-to-urban migration and education.

Also read: From Jobless to Job-loss Growth: Gainers and Losers during 2012–18

Snap Fact features new and interesting reads from the world of research

 

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India's jobs crisis: It's no more about who's responsible, it's about what we do now to arrest precipitous slide
A full-blown unemployment crisis is looming over the Indian economy. And, for the first time, there is evidence to show that this crisis makes no distinction between the political persuasions of one kind or another.

According to a recently released academic paper titled: India’s Employment Crisis: Rising Education Levels and Falling Non-agricultural Job Growth by Santosh Mehrotra and Jajati K Parida and published by the Centre of Sustainable Employment at the Azim Premji University, India lost no less than nine million jobs in six years between 2011-12 and 2017-18, straddling three years each of the rule of Manmohan Singh's UPA and Narendra Modi's NDA. This is unprecedented. Real wages also declined in the same period.

Interestingly, what the paper says is contradictory to the job scenario projected by a study by the Economic Advisory Council to the Prime Minister that claimed that total employment grew from 433 million in 2011-12 to 457 million in 2017-18.

Calling this trend (decline in total unemployment between FY2012 and FY2018) ‘unprecedented’, i.e. the first time total employment is falling at this scale, the paper said: “Due to a decline of employment in agriculture and manufacturing and slow growth of construction jobs, the process of structural transformation, which had gained momentum post-2004-5, has stalled since 2012. Mounting unemployment of educated youth, and poor quality of non-farm jobs have caused an increase in the disheartened labour force,” the paper said.

This is another grim reminder of the worrying course of the economy and the rise in unemployment. Of course, this isn’t the first time experts are warning about the state of jobs in the country.

The National Sample Survey Office’s (NSSO) job survey for the year 2017-18 had shown a jump in the unemployment rate to over 6 percent, a 45-year high. The Centre for Monitoring Indian Economy (CMIE) has been warning about the decline in job availability even for skilled youth, for quite some time now. The lack of availability of employment generation commensurate with the increase in population indicates the economy is on course to a full-blown unemployment crisis faster than what experts warned initially.

The CSE paper has some detailed findings.

Key findings of the survey

One of the most important aspects is that real wages have not increased between 2011-12 and 2017-18 in neither rural nor urban areas. Real wages are wages adjusted for inflation and the purchasing power of the individual. This would, in turn, mean that actual poverty might not have declined as certain surveys have shown. Second, agriculture is fast losing its tag of the biggest employer. The share of employment in agriculture and allied sector also declined from 49 percent to about 44 percent (Table 1).

During this period manufacturing also recorded a 3.5 million decline in jobs, which resulted in a fall in its share of employment from 12.6 to 12.1 percent.

The manufacturing sector (mostly construction) which was creating about 4 million jobs per annum during 2004-05 and 2011-12, created only about 0.6 million per annum during 2011-12 and 2017-18 (Table 1). The slow growth of construction jobs has negative implications for low-skilled employment, real wages and the incidence of poverty.

The only sector which sustained growth in jobs (3 million per annum) is services, although the quality of jobs in this sector is mostly poor (outside of modern services).

The Narendra Modi government, very prickly about criticism on the economy, has been defending the problem of job deficit by picking the methodology that suits its counter-narrative, using the EPFO-based methodology. But there is an issue with that. The EPFO-based employment mapping does not capture data in the informal sector, while other studies like CMIE base their findings on household surveys to arrive at the unemployment figures.

Second, there may have been a spike in new EPFO registrations, but many of them may not be active accounts. What this means is that not all the new registrations may be of people currently employed. Experts have cited some more issues with using EPFO data-based methodology to calculate employment/unemployment figures.

The deterioration in the job situation raises a question mark on the quality of GDP growth the Indian economy witnessed in the past decade. It shows that the fruits of an average 6-7 percent GDP growth have failed to reach the common man—to generate jobs and handhold the poor out of poverty as the official numbers had us believe.

It is high time the government in consultation with experts formulates a national policy for employment generation. Baby steps and sector-specific policy tweaks will not work anymore. This isn't about a blame game. It is about what we can do to arrest the unemployment slide.

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Updated Date: Nov 04, 2019 16:29:33 IST

Tags : Agricultural Jobs, Centre For Monitoring Indian Economy, CMIE,Economic Advisory Council, EPFO-Based Methodology, InMyOpinion, Job Deficit, Manmohan Singh, Manufacturing Jobs, Modi Government Takes On UPA Governors, Narendra Modi, National Sample Survey Office, NSSO Job Survey, Poverty, Real Wages, Rise In Unemployment, Unemployment Crisis,UPA Govt

 

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First time in India's history, employment slumps 9 million in six years: Azim Premji University
The data showed the service sector is the only industry that is "driving the growth jobs in the non-farm sectors, while employment growth in construction has decelerated along with a fall in manufacturing employment during 2011-12 and 2017-18"
BusinessToday.In
Total employment in India dropped by 9 million between 2011-12 and 2017-18, a first in the country's history, a paper published by Azim Premji University says. The new academic paper titled 'India's Employment Crisis: Rising Education Levels and Falling Non-Agricultural Job Growth' said that employment fell from 474 million in 2011-12 to 465 million in 2017-18. "Total employment during 2011-12 and 2017-18 declined by 9 million. This happened for the first time in India's history," the study said.

The paper is written by Santosh Mehrotra and Jajati K Parida and published by the Centre of Sustainable Employment at the Azim Premji University. Mehrotra teaches Economics at Jawaharlal Nehru University while Parida is a Professor at the Central University of Punjab.

"The Indian economy is passing through an unprecedented phase in its employment history, in which total employment (Workforce) is declining, and open unemployed and disheartened Not-in-Labour Force-Education-Training" (NLET) youth (a reserve army) are rising massively," the paper added.

Some of the key conclusions of the report:


Informal Jobs

There was a marginal rise in the share of regular and formal employment owing to the growth of formal jobs in the private sectors. Despite the increase, the share of informal jobs rose within the government/public sector. Meanwhile, a predominant share of jobs is still generated by the micro and small units of the unorganised sectors without any formal or written job contract, the study revealed.

"Though the share of regular and formal employment increased marginally due to growth of formal jobs in the private sectors, the share of informal jobs within the government/public sector increased. A dominant share of jobs is still generated by micro and small units of the unorganised sectors without any formal or written job contract. In both government and private sectors, the number of contract jobs (with less than a year's contract) is on the rise post-2011-12. Not surprisingly, real wages have not increased in either rural or urban areas," the report disclosed.

Service sector

The data showed the service sector is the only industry that is "driving the growth jobs in the non-farm sectors, while employment growth in construction has decelerated along with a fall in manufacturing employment during 2011-12 and 2017-18." Although the job market has witnessed sluggish demand conditions, the increasing influx of youth (who have recently completed their education and training) on the supply side has led to a massive rise in the "number of open unemployed and disheartened labour force."

Falling employment in agriculture and manufacturing

The agriculture sector kept the momentum of continued decline in employment level at the rate of 4.5 million per annum (around 27 million in total) during 2011-12 and 2017-18. The report further stated that the share of employment in agriculture and allied sector also declined from 49 per cent to about 44 per cent. Meanwhile, the manufacturing sector also registered a 3.5 million decline in jobs during the said period leading to a fall in its share of employment from 12.6 to 12.1 per cent. "The non-manufacturing sector (mostly construction ) which was creating about 4 million jobs per annum during 2004-05 and 2011-12, created only about 0.6 million pa during 2011-12 and 2017-18," the report added.


Mounting youth unemployment causes an upsurge in the disheartened labour force

According to the report, the labour force (those looking for work) increased only by about 10 million to reach 495 million during 2017-18.

This is because both Labour Force Participation Rate (LFPR, or share of those in working-age looking for work) and Work Participation Rate (WPR, or share of those looking for work actually finding work) declined from 39.5 per cent to about 37 per cent, and 38.6 percent to about 34.7 percent respectively between 2011-12 and 2017-18.

For youth, the LFPR fell from 44.6 per cent to 38.3 per cent, and WPR fell from 42 per cent to 31.4 per cent between the same period.

Massive rise in unemployment among educated youth

The report states that the overall unemployment rate (based on CWS) increased to an all-time high of 8.8 per cent from 3 per cent between 2011-12 and 2017-18. The incidence of unemployment almost doubled from 6.1 per cent between 2011-12 to 17.8 per cent in 2017-18 across all education categories.

Rising disheartened labour force

The slow growth of non-farm jobs and the rising open unemployment together have resulted in a massive increase of disheartened youth, said the report. "Youth Not in Labour Force, Education and Training (NLET)" increased in India by about 2 million per annum during 2004-05 and 2011-12, which further increased by about 3 million per annum in 2011-12 and 2017-18. About 100.2 million youth declared themselves as NLET during 2017-18," the report enunciated.

The states with a higher incidence of unemployment have also reported a large number of disheartened labour force in the form of NLET youth. Uttar Pradesh ranked top among the states having about 21 million NLET youth in 2017-18 followed by Bihar, West Bengal, Maharashtra, Madhya Pradesh, Andhra Pradesh, Rajasthan, Gujarat, Karnataka, Tamil Nadu, Odisha, Jharkhand and Assam.

Micro and small enterprises still hold the key role in creating jobs- The report stated that the overall growth in non-farm sector employment is driven by enterprises which hire less than 10 workers in India. These enterprises contributed about 68 per cent of the total non-farm employment during 2017-18. In manufacturing their share is 61 per cent, while in non-manufacturing and services their share is about 66 and 71 per cent respectively during 2017-18.

"This result shows why the share of informal and un-organised sector employment are still so high in India, despite a rise in the number of registered enterprises. Because even though these enterprises might have registered themselves under GST to continue their business (and pay sale tax), but they could not provide employment with social security benefits to their employees because of the size of their business," it said.

Also read: India's unemployment rate rises to 3-year high of 8.5% in October: CMIE


Also read: Unemployment continues to remain biggest worry for Indians: survey

 

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More than half of South Asian youth are not on track to have the education and skills necessary for employment in 2030

8-11 minutes


KATHMANDU/NEW YORK/MUMBAI, 30 October 2019 – An estimated 54 per cent of South Asian youth leave school without the necessary skills to get a decent job in the next decade, according to data produced by the Global Business Coalition for Education (GBC-Education), the Education Commission, and UNICEF.

According to the data, South Asia lags behind several other regions in preparing the next generation of young people with the skills they will need for 21st century work. Projections place South Asia well below the global average. This builds on the estimates UNICEF produced with the Commission last year on the projected learning outcomes in 2030 for all South Asian countries.

"Every day, nearly 100,000 young South Asians – a large sports stadium of young people – enter the labour market, almost half of them not on track to find 21st century jobs,” said Henrietta Fore, UNICEF Executive Director. “South Asia is at a critical juncture, with a limited window during which it can reap significant demographic dividends from its talented and capable youth. Get it right, and millions could be lifted out of poverty. Fail to do so, and economic growth will falter, youth despair will rise, and further talent will be lost to other regions.”

Special edition of GBC-Education’s 2030 Skills Scorecard: School age children on track to complete secondary AND reach the learning benchmarks, per cent[1]

Country

Today

2030 Projection

Bangladesh

26%

55%

Bhutan

47%

81%

India

19%

47%

Maldives

16%

46%

Nepal

13%

46%

Pakistan

18%

40%

Sri Lanka

With almost half of its population of 1.8 billion below the age of 24, led by India, Pakistan and Bangladesh, South Asia will have the largest youth labour force in the world until 2040.This offers the region the potential to drive vibrant and productive economies. If strong investments in skills development are made, the region is poised to maintain strong economic growth as well as an expansion of opportunities in the education and skills sectors in the coming decades.

However, a recent UNICEF ‘Voices of Youth’ survey conducted among 32,000 young people in South Asia reveals concerns among these under 24-year-olds about how well they are being prepared for the modern economy. According to the poll, many young people in South Asia feel their education systems are outdated and do not prepare them for employment. They cite lack of work experience (26%), inadequate support services to improve employability (23% received no support and most received limited and not comprehensive support), and bribery demands/discriminatory and unfair hiring practices (44%) as key barriers to finding employment even after they have graduated.

“This is a crisis,” said Justin Van Fleet, Executive Director of the Global Business Coalition for Education. “Addressing the youth skills gap in South Asia requires government investments, commitments from the business community, contributions from civil society, and the perspective of young people to best equip the next generation to successfully enter the rapidly changing job market.”

A separate new report commissioned by UNICEF identified major obstacles to addressing the youth skills gap in the region. These include the low quality of education and suboptimal vocational training which do not give students the desired skill levels the labour market demands, among others. Compiled by Ernst & Young India, this report identifies a total of 30 already-in-operation solutions to the youth skills crisis.

UNICEF, the Global Business Coalition for Education, and Generation Unlimited are convening a major forum from October 29-31 in Mumbai to bring together leaders from government, youth and the business community to address the education and skills crisis and showcase solutions. Representatives from Accenture, Britannica, Grameenphone, Tata STRIVE, Google, Maruti Suzuki, ILO, Capgemini Technology Services, Ooredoo, Jetwing, etc. will also attend.

“In my travels, I have heard the voices of young people — their ideas, their enthusiasm, their vision for the future. I have also heard their worries about not getting the education or skills they need, and not being able to find a job,” Fore said. “The world of work is changing fast. If governments invest in better and modern education, and businesses create better opportunities for young people to enter the job market, South Asia can set an example for the world. But this can only be done if we act smart, and act together.”

###


Notes to editors:

About the South Asia Youth Skills and Solutions Forum:

The South Asia Youth Skills and Solutions Forum will build upon the Generation Unlimited initiative and GBC–Education’s Youth Skills and Innovation initiative, and aims to advance the development of partnerships between the private sector, governments and international agencies to scale-up sustainable solutions to the youth skills crisis in the region. It will engage young people from across South Asia in meaningful interaction, action-focused meetings and sessions linking education, employability, and skills.

About Developing Skills in Youth to Succeed in the Evolving South Asian Economy: Developing Skills in Youth to Succeed in the Evolving South Asian Economy (Ernst & Young India) cited additional barriers, including a lack of or limited support for self-employment and entrepreneurship, especially for youth who have problems obtaining loans, registering businesses or obtaining soft skills that can help them succeed. The education and skills training systems and the labour market are particularly biased against young women due to factors like marriage expectations, safety concerns and gender stereotypes. Youth with disabilities are one of the most marginalised and excluded groups in South Asia when it comes to obtaining education and employment. A lack of motivation and participation by local youth in certain sectors and job categories lead to increased demand for migrant workers. Construction and manual labour jobs are instances where a change in perception of the value of these jobs is needed as much or more than skilling initiatives.

The solutions identified in the report by EY India reveal new efforts to address longstanding issues, like rural access to training, matching skills training with labour market needs, and matching soft skills development (e.g. communication, team management) with technical skills growth. These solutions each require committed partnerships between public and private actors and youth themselves, and indicate where investments can boost economic growth, increase employer profitability, lower unemployment, and drive high returns to the labour and skills of young workers.

About the Global Business Coalition for Education:

The Global Business Coalition for Education (GBC-Education) is a movement of businesses committed to ending the global education crisis and unleashing the potential of the next generation. The organization's mission is to ensure that every child has the best start in life, a safe place to learn, and skills for the future. Established in 2012 by the global children’s charity Theirworld, GBC-Education is committed to bringing together the expertise and resources of the business community to help achieve Sustainable Development Goal 4 – quality, inclusive education for all. Serving as the business community’s social impact advisor, the organization helps businesses develop customized programmes and identify investments, partnerships, and opportunities that will have the greatest impact.

About Generation Unlimited:
Generation Unlimited is global partnership working to prepare young people to become productive and engaged citizens. It connects secondary-age education and training to employment and entrepreneurship, empowering every young person to thrive in the world of work. Visit: www.generationunlimited.org. Follow Generation Unlimited on Twitter and Instagram

* These estimates were generated based on a 2019 update of the Education Commission’s original 2016 projections model for the Learning Generation report. Most recent national learning assessment data used for each country as follows: BCSE 2015 for Bhutan, GCE O Levels 2016 for Sri Lanka, LASI 2015 for Bangladesh, NAT 2016 for Pakistan, NCERT 2017 for India, Nepali country assessment 2017 for Nepal, O Level Exam 2016 for Maldives. Afghanistan is not included due to lack of recent learning assessment data at the secondary level.

 

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Indian IT companies to shed 5-10% of mid-level workforce: Ex-CFO of Infosys
IT cos have no choice but to lay off some of their mid-level staff to become more agile, said ex-CFO of Infosys.
BENGALURU: Information technology companies in the country have no choice but to lay off at least five to ten per cent of their middle-level staff to ward off margin pressure and become more agile, IT industry veteran V Balakrishnan said on Thursday.

The middle-layer accounts for about 20-30 per cent of the total workforce of IT companies.

The former Chief Financial Officer of software giant Infosys Ltd said the companies have no choice because they all have built a lot of fat in the middle, so they have to reduce it and become more agile.

"Also, they have to get employees who understand new technologies, they have to get rid of some of the employees, who are more on the legacy, and try to attract talent which is more digital, that has to happen, there is no choice", Balakrishnan told PTI.

Asked if other companies would follow suit after lay-offs at Cognizant and Infosys, he said they have no choice, because there was lot of pressure on the margins.

"When you go more on the digital side, customers are also becoming more conscious about the cost. On the other side, you have to become more agile, cut all the flab, that's (lay-offs) inevitable, that will happen with all companies", Balakrishnan said.

However, he said, the growth of Indian IT services companies in general in the calendar year 2019 has been stable with reasonable growth. There were fears of slowdown in the global economies but that impact has not been seen.

"Digital is driving growth. With new technologies, most of the companies are reconfiguring themselves, focusing on digital and also reducing the flab with legacy technology employees and trying to be more cost-effective and having a better pyramid," he said.

"So, it's a combination of both. Focusing more on digital, that's where the growth is, and also reconfiguring employees & slowly moving away from the legacy technologies," he added.

On the prospects of IT services companies in 2020, he said all the global economies seem to be stable and there are no fears of recession.

If they play the game properly, it would be a good year for them as there are no concerns, Balakrishnan added.

 

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Each Indian IT Giant To Fire Upto 20,000 Employees: 3 Reasons Why This Is Happening
Last updated Nov 13, 2019

Infosys, TCS, Cognizant and others have already announced, or hinted that senior and mid-level employees from their organizations will be asked to leave.

Although the numbers varies from case to case, but as per industry experts, IT giants can layoff 10,000 to 20,000 employees in the coming days.

Why is this happening?

Here are three reasons why..

3 Reasons Why IT Giants Will Fire Employees
As per a Business Standard report, IT biggies in India are resorting to termination of employees due to:

• Rising pressure on core business verticales, due to heavy discounts to US clients
• Increased hiring in the US, due to strict H1B visa rules for Indians
• Emergence of new technologies, such as automation, AI and machine learning, which are making employees redundant

This is the reason that IT biggies are expected to fire 5-8% of their total employees in the coming days, which translates to 10,000 to 20,000 employees, per IT company.

Who Will Be Fired?
As per Kris Lakshmikanth, founder-head at executive search firm Head Hunters, the employees who are in the roles of Project Managers, and Delivery Managers, having salary of Rs 20-40 Lakh per annum, would be the first to be asked to leave.

He said, “It (reduction of personnel) is happening across all tier-I IT services companies. Employees in the senior project manager or delivery manager kind of roles, where the annual salary range is Rs 20-40 lakh, are facing the maximum risk..”

As per an industry veteran from Infosys, as much as 1.2 lakh Indian IT employees face terminations in the next few months.

Layoff News Coming In From All Quarters
IT biggie Cognizant has already announced that upto 6,000 employees in India can be asked to leave, as one of the major content based projects from Facebook has been pulled off.

IT Employees in India have formed Unions, and they have termed this as illegal, and asked for Govt. interference to stop this mass terminations.

Overall, globally, Cognizant can fire upto 13,000 employees.

On the other hand IT biggie Infosys has made it clear that they will fire tons of senior and mid-level employees, and hire freshers, which will help them to save upto Rs 1000 crore this year.

Although they have described this as normal exercise, and only under-performers will be asked to leave first, but employees are skeptical.

As much as 12,000 employees from Infosys face job loss.

At the same time, TCS too is planning to fire a large number of senior and mid-level employees, and hire freshers to reduce costs, and increase profits.

Capgemini, another IT behemoth, too is firing employees in India.

Interestingly, Indian IT employees have already dragged some of the IT companies to Court, over long working hours, and zero extra pay, even as the salaries of Indians in the IT companies have actually decreased in the last few years.

 

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After Cognizant, Infosys Plans To Cut 10,000 Middle, Senior Level Staff; Capgemini Fires 500 Employees

The Logical Indian Crew India
November 7th, 2019 / 3:49 PM

Indian IT giant – Infosys Ltd is reportedly planning to lay off thousands of employees at the middle and senior levels.

The company has rebuffed the move as mass trimming and called it an integral step for smooth running of a high-performance organisation.

“As a high-performance organisation, involuntary attrition is integral to the normal course of business and this should not be interpreted as any mass trimming across any level”, The Times Of India quoted Infosys.

The company said that it is firing people who are not matching up to the expected performance standards.

“There is no planned layoff. We have performance reviews and people who are not performing are asked to leave. This is normal, there is no targeted layoff,” chief operating officer (COO) UB Pravin Rao said.

The tech giant is sacking 10 per cent of its workforce in the JL6 band (job level 6), which refers to the level of senior managers.

This means that the company will cut 2,200 jobs at that particular level (job level 6). The company currently has 30,092 employees in the JL6, JL7, and JL8 bands.

The company’s share fell 1.86 per cent to Rs 695.80 on the Bombay Stock Exchange (BSE) on November 5 at the back of the news.

The Economic Times reported that in addition to JL6 job cuts, it will also let go of employees working at the associate (JL3 and below) and middle (JL4 and 5) levels, which comprise of 2-5 percent of the workforce in these levels.

It is also reported of the total 971 senior executives, the company will lay off 2.5 per cent of people holding the ranks of vice-presidents, senior vice-presidents, executive vice-presidents. This is equivalent to 50 job losses at the executive level.

IT major Cognizant, which has over 2 lakh employees working in India, exited content operations business recently.

Capgemini, a French multinational corporation with a massive workforce in India has also laid off nearly 500 employees. The company blamed the slow down in business as the reason for layoffs.

Also Read: Cognizant Likely To Lay Off 7,000 Mid-To-Senior Employees To Cut Costs

Contributors

Written by : Debarghya Sil

Edited by : Shweta Kothari

 

[Chakar The Great]

Thats not good. Up untill an year ago Indians use to call Pakistan " Bankrupt nation", what happened to mighty Indian economy , 5 Trillion Dollar economy by 2024?

 

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India’s job crisis is worse than people thought — and its government tried to squelch the data
Joanna Slater

People crowd into a job fair organized by the employment department of the Delhi state government in New Delhi on Jan. 21, 2019. (Anushree Fadnavis/Reuters)
NEW DELHI — As Indians prepare to vote in national elections later this spring, one burning question has dominated the debate over Prime Minister Narendra Modi’s track record: Has he fulfilled his promise to create jobs for millions of people?

Anecdotal evidence suggests the answer is no: College graduates have been applying for menial jobs by the millions, and daily laborers report that work and wages are declining. A private survey recently showed that the number of people working shrank by 11 million in 2018.

But the government has insisted the jobs picture is healthy. Plus, some officials said, the gold standard of employment data in India is a nationwide survey conducted by the Ministry of Statistics. Until this week, those figures were a closely held secret.

Now that data has been leaked — and it’s bad.

According to a report first published in the Business Standard, an Indian financial newspaper, the nationwide unemployment rate rose to 6.1 percent in 2018, a 45-year high. It’s also nearly triple the jobless rate in 2012, the last time this type of survey was conducted.

The statistics on youth unemployment are even more striking. The jobless rate for young men in rural areas spiked to 17.7 percent since 2012. For young men in cities, it more than doubled, to 18.7 percent.

To say this is a political problem for the Modi government is an understatement. Modi was elected on promises of ushering in “achhe din” — good times — and rising unemployment is a major disadvantage in making his pitch for reelection.

On Friday, the Modi government used its last budget before the polls to offer an array of voter-pleasing measures, including tax breaks and income grants for poor farmers. Piyush Goyal, the minister who presented the budget, defended the government’s track record on job creation by citing a source that economists say is deficient and reflects only a fraction of the economy.

The bad news in the nationwide employment data is only one part of the problem: The government also tried to prevent such figures from becoming public. The jobs report was approved by India’s National Statistical Commission in December, according to its acting chairman. The normal procedure is that the data gets released five days later, said Pronab Sen, the country’s former chief statistician.

Weeks passed and the report did not appear. Then, earlier this week, two members of the statistical commission, including the chair, P.C. Mohanan, resigned in protest — an unprecedented move in India’s statistical community. (When contacted, Mohanan declined to comment.)

India’s government did not deny the accuracy of the job figures reported by the Business Standard. But senior officials at NITI Aayog, the policy-planning arm of the government, held a news conference where they said the leaked data was neither finalized nor comparable to earlier surveys.

Both claims are untrue, Sen said. The policy-planning arm “has absolutely no business in holding forth on the data,” which falls under the purview of the statistics ministry. “Frankly, in my opinion, it was bizarre.”

The furor over the jobs data adds to a broader sense of unease over the Modi government’s handling of statistics. Late last year it revised the way gross domestic product was calculated, to the disquiet of some economists. The updated figures downgraded the economy’s performance during the previous government and elevated it during the Modi years.

While India’s statistical apparatus is far from perfect, it had functioned relatively free of interference, Sen said, particularly with surveys that involve primary data collection, such as the employment survey. Now the “impression you’re giving to the world is that the data put out is the data the government wants put out.”

Meanwhile, the leaked employment data suggests that whoever wins the next election will continue to have a massive challenge ahead. Within two years, the number of people in India between the ages of 15 and 34 will reach nearly 500 million. The share of the working-age population is expected to continue growing for the next 15 to 20 years — a rare opportunity for any country to boost its economic development.

But rising joblessness among young people threatens that scenario.

“What this data tells us is that we’re basically squandering the demographic dividend,” said Radhicka Kapoor, an economist at the Indian Council for Research on International Economic Relations. “The problem that is staring us in the face is youth unemployment, and that’s what we need to address.”

 

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Exclusive: Tens of thousands losing jobs as India's auto crisis deepens - sources
NEW DELHI (Reuters) - Slumping sales of cars and motorcycles are triggering massive job cuts in India’s auto sector, with many companies forced to shut down factories for days and axe shifts, multiple sources said.

FILE PHOTO: Workers assemble a Tata Tiago car inside the Tata Motors car plant in Sanand, on the outskirts of Ahmedabad, India, August 7, 2018. REUTERS/Amit Dave/File Photo

The cull has been so extensive that one senior industry source told Reuters that initial estimates suggest that automakers, parts manufacturers and dealers have laid off about 350,000 workers since April.

Within this previously unreported figure, car and motorcycle makers have laid off 15,000 and component manufacturers 100,000, with the remaining job losses at dealers, many of which have closed, the industry source said.

Reuters was able to identify at least five companies that have recently cut or plan to cut hundreds of jobs, mainly from their temporary labor force.

The downturn - regarded by industry executives as the worst suffered by the Indian auto industry - is posing a big challenge for Prime Minister Narendra Modi’s government as it begins its second term at a time when India’s jobless numbers are climbing.

To revive the sector, auto executives plan to demand tax cuts and easier access to financing for both dealers and consumers at a meeting with officials from India’s finance ministry scheduled for Wednesday, the senior industry source said.

The industry’s plight was highlighted by the Automotive Component Manufactures Association of India (ACMA), with the trade body’s director general, Vinnie Mehta, saying the sector was experiencing a “recessionary phase”.

SPREADING MALAISE
The malaise has been spreading across much of the industry, both in terms of vehicle type and components as well as geographically in India’s manufacturing hubs.

For example, Japanese motorcycle maker Yamaha Motor (7272.T) and auto components makers including France’s Valeo (VLOF.PA) and Subros (SUBR.NS) have laid off about 1,700 temporary workers in India after a slump in sales, sources told Reuters.

Subros, which is part-owned by Japan’s Denso Corp (6902.T) and Suzuki Motor Corp (7269.T), has laid off 800 workers. Indian parts maker Vee Gee Kaushiko has cut 500 people while Yamaha and Valeo last month reduced their workforces by 200 each, said several sources aware of the cuts.

Meanwhile, automotive supplier Wheels India (WHEL.NS) could cut its temporary workforce by as much as 800 and has started realigning its shifts, two of the sources said.

The layoffs come as carmakers including Honda Motor Co (7267.T), Tata Motors (TAMO.NS) and Mahindra & Mahindra (MAHM.NS) have implemented brief suspensions to production in recent weeks in the face of slow demand, separate sources said.

The auto sector, which contributes more than 7% of India’s GDP, is facing one of its worst downturns.

Passenger vehicle sales have dropped for nine straight months through July, with some automakers suffering year-on-year declines of more than 30 percent in recent months.

Manpower is the only variable factor for companies and more workers will face the axe, said ACMA’s Mehta.

Yamaha, Subros, Vee Gee Kaushiko and Wheels India did not respond to requests for comment.

Valeo India said it is realigning for changing conditions and has trimmed its temporary workforce.

FILE PHOTO: Employees work at the production line on a Honda Mobilio car at a Honda plant in Greater Noida on the outskirts of New Delhi July 21, 2014. REUTERS/Adnan Abidi/File Photo
HUGE FALLOUT
The fallout from the auto slump could be huge. The sector employs more than 35 million people directly and indirectly, accounting for nearly half of India’s manufacturing output.

India’s jobless rate rose to 7.51% in July 2019 from 5.66% a year earlier, according to private data group CMIE. The CMIE data is more up-to-date than government figures and regarded in financial markets as more credible.

At least 7% of temporary workers employed by 15 automakers in India have lost their jobs in recent months, said Vishnu Mathur, director general at the Society of Indian Automobile Manufacturers (SIAM).

“It is a conservative estimate based on our initial analysis,” he said.

Maruti Suzuki (MRTI.NS), India’s biggest carmaker, cut its temporary workforce by 6% over the past six months, Reuters reported on Friday.

There is little sign of a revival.

Tata Motors has had week-long shutdowns at four of its plants in the past two weeks, while Mahindra has said it had 5-13 days without production at various plants between April and June.

A statement from Tata Motors said it has aligned production with demand and adjusted the shifts and temporary workers.

Honda has stopped production of some car models at its plant in the northwestern state of Rajasthan since July 16 and is halting manufacturing entirely at its second plant in Greater Noida on the outskirts of Delhi for 15 days from July 26, two sources said.

The company’s Indian business said that production management will be critical throughout the year and it is seeking to avoid stock build-up.

Writing by Aditi Shah; Editing by Martin Howell and David Goodman

 

[d00od00o]

India's engineers struggle for work as jobs crisis worsens

CHINCHWAD, India (Reuters) - Santosh Gurav gained a bachelor’s degree in technology from a mid-tier college in western India last year, specializing in electrical engineering and hoping to land a job in industrial automation.

Six months on, the 27-year-old repairs mixer-grinders, table fans and other household appliances at a cramped shop in the western city of Pune. On better days, he picks up broken LED lights from scrap dealers, fixes them, then sells them. He earns about $50 a month, just enough to cover the rent for the room he shares with two others as his home.

“I haven’t even started repaying my education loan,” said Gurav, referring to the nearly $4,000 he’d borrowed for his undergraduate study.

He is one of hundreds of thousands of engineers - studying everything from computer code to civil engineering - that India’s education system churns out each year, many with large loans and little prospect of finding a job in their field.

They highlight Prime Minister Narendra Modi’s difficulty in fulfilling a promise he made weeks after coming to power in 2014: creating millions of jobs by boosting manufacturing under a flagship ‘Make in India’ project launched with much fanfare.

“Come, Make in India, we will say to the world, from electrical to electronics,” Modi said in his maiden Independence Day speech as prime minister, pledging to create up to 100 million new jobs by 2022.

NO ECHOES OF CHINA BOOM
Four years on, the program’s impact on job creation is unclear and growth in the manufacturing sector has been sluggish, partly due to a lack of land and labor reform.

India’s unemployment rate rose to 7.2 percent last month, up from 5.9 percent in February 2018, according to data compiled by the Centre for Monitoring Indian Economy (CMIE) think tank. The figures are more recent than government data and many economists regard them as more credible.

The data, which is an estimate based on household surveys, shows 31.2 million people were actively looking for jobs in February this year, said Mahesh Vyas, the CMIE managing director. It did not have a breakup for engineering or technology graduates.

With more than half of India’s population under 25 years of age, critics say the votes of jobless youth could hurt Modi’s chances of securing a second term in the upcoming general election to be held in April-May.

The increasing use of automation in industry, the massive number of young Indians coming onto the job market, and the regulatory hurdles that companies still face if they want to set up shop in India, are all big issues for those without work.

The manufacturing boom that helped China in the past 40 years will not wash up on India’s shores. Companies can no longer afford to just rely on cheap labor: they need skilled labor and better infrastructure to drive technological innovations and increase productivity.

Employers often complain about the lack of skilled engineering and technology graduates, said Varun Aggarwal, an electrical engineer and co-founder of the skills assessment firm Aspiring Minds. Its surveys show over 80 percent of the engineers India produces are not employable. The employability has not improved in seven years, Aggarwal said.

“The numbers have just not budged,” he said. “Many can’t even write basic code.”

“We need to start there, at the beginning of the education system,” said Aggarwal.

The IT industry had long been seen as a gateway to the middle class in India, but a move to robotics and artificial intelligence has replaced some positions. The business process outsourcing industry – seen as a stable provider of “offshore” jobs – added the least number of employees in seven years in 2017-18 (April-March), according to the trade body Nasscom.

LACK ENGLISH SKILLS
At a recent job fair organized by a college in the town of Chinchwad in western India, Gurav was among hundreds queued up to apply, including dozens of engineers, even though most companies were hiring for marketing and finance positions.

Many came from rural areas where they studied in regional languages, and lacked strong English skills – another gap that recruiters say India’s education system needs to address.

Ankush Karwade, 22, who traveled 80 miles (130 km) to reach the fair, said his father was a farmer and the family couldn’t fund him to earn an undergraduate degree. He did a shorter and cheaper diploma course in engineering.

“I watch some English movies and read the newspapers to improve, but most employers want graduates,” he said. “They (also) want English speaking skills, which I don’t have.”

Gayatri, a 24-year-old woman who goes by one name, gained a master’s degree in engineering four months ago, under pressure from her parents. She said she had wanted to continue her education in Indian classical music.

“My father wanted me to do engineering, so I did it. Now there are no jobs,” she said. A company at the fair offered her a customer service position that would pay about $140 a month.

“Can you believe it?” she said. “I didn’t get this degree to sit at a call center.”

Jobless engineers are not a new problem and “miniscule” in comparison to the millions of farmers dissatisfied over weak crop prices, said Himanshu, an associate professor of economics at the Jawaharlal Nehru University who also uses one name.

Still, they represent a lot of untapped potential.

Fixing household appliances is not what Gurav expected to do as a graduate. “I could find work at a call center, but it’s not what I want to do,” he said. He may soon be forced to reconsider though as his father is due to retire next year and the family will need the money.

For now, Gurav plans to continue to do the repairwork – but is too ashamed to tell his friends about it, he said, and refused to be photographed at the shop.

“If people see me working there they might think I’m unskilled. But I have skills. I am passionate about this field.”

Reporting by Zeba Siddiqui in CHINCHWAD; Additional reporting by Aftab Ahmed; Editing by Martin Howell and Raju Gopalakrishnan

 

[Chakar The Great]

20000 employees = 20000 families.

 

[d00od00o]

Indian factory output shrinks 4.3%; Lowest in almost 8 years
As per the Index of Industrial Production (IIP), factory output contracted 4.3% in September, the lowest in almost eight years in this series, which began April 2012 (with 2011-12 as the base year) and the lowest since October 2011when compared wi...
NEW DELHI: India’s industrial production shrank for the second consecutive month in September, its worst performance in the series that began April 2012, highlighting the persistent structural slowdown in the economy and firming up expectations of further monetary easing next month with scant signs of a turnaround.

As per the Index of Industrial Production (IIP), factory output contracted 4.3% in September, the lowest in almost eight years in this series, which began April 2012 (with 2011-12 as the base year) and the lowest since October 2011when compared with the earlier series with base year 2004-05. IIP had contracted 5% in October 2011.

The decline was steeper than the 1.4% reduction seen in August, suggesting that the economy may have slumped further in the second quarter of the current financial year. Industrial production grew 4.6% in September 2018.

Economists expect second-quarter growth — the GDP figure is to be released on November 29 — may be lower than the six-year low of 5% in the June quarter. The Reserve Bank of India (RBI) had said last month that growth may be marginally better at 5.3% in the July-September period.

“This is a weak phase in the economy and sentiments are not robust but it’s tough to say if the economy has bottomed out,” said IDFC First Bank chief economist Indranil Pan. The lender sees second-quarter growth at 4.9-5.1%.

The central bank has pared its FY20 annual growth forecast to 6.1% from 6.8% estimated earlier. The economy grew 6.8% in FY19.

Full year growth estimates
Economists’ estimates for the full year are generally more gloomy. Growth for the current fiscal year may dip to around 4.7%, dragged down by the industrial sector, said ICRA principal economist Aditi Nayar. Nomura cut its GDP forecast to 4.9% for FY20 from 5.7% earlier. Axis Bank chief economist Saugata Bhattacharya said, “Overall, Q2 GDP growth is likely to be weak and robust recovery will take some time.”

The RBI has cut interest rates by a cumulative 135 basis points this year and will review monetary policy early next month, with the announcement scheduled for December 5. One basis point is one-hundredth of a percentage point.

Last week, Moody’s Investor Service lowered its outlook on India’s sovereign rating (Baa2) to negative from stable, saying that the domestic economic downturn could be structural, as opposed to cyclical, implying that more policy changes were needed in order to revive growth.

The statistics office revised the contraction to 1.4% in August from 1.1% earlier. India’s core sector output contracted 5.2% in September, posting its worst performance in 14 years.

“The Indian economy is presently facing a structural growth slowdown originating from declining household savings rate and low agricultural growth,” said Devendra Kumar Pant, chief economist, India Ratings. April-September factory output growth at 1.3% was well below 5.2% for the same period in the last fiscal.

Society of Indian Automobile Manufacturers (SIAM) data showed passenger vehicle sales in the country rose marginally by 0.28% in October, breaking an 11-month streak of declines, driven by festive buying amid deep discounts. However, those of cars dropped 6.34%.

CARE Ratings said that in order to attain 4% growth for FY20, industrial output would need to grow at an average 6-6.5% in the second half of the year.

Broad-based decline
Independent experts were doubtful about the prospects of an immediate recovery but expect a 25 basis point rate cut next month.

Consumer demand has not picked up, said CARE Ratings chief economist Madan Sabnavis. Both consumer durable and capital goods, key growth engines, are negative both for September and the six-month period since April.

Production of capital goods, an indicator of investment activity, shrank 20.7% in September.

“The contraction was steeper than we expected,” said Bhattacharya. “While the slowdown is broadbased, including FMCG consumption demand, the largest contributor was mining, the proximate reason being the excess rains this year in the coal and mineral mining belts.”

Pan said there could be a turnaround from here on in. “However, the extent of that is not known,” he said.

Mining output shrank 8.5% in September while electricity generation contracted 2.6% in the month.

Production of consumer durables contracted 9.9% in September and that of consumer non-durables was down 0.4%. Production of primary goods shrank 5.1% while that of intermediate goods rose 7%. In all, 17 out of 23 industry groups reported positive growth.
In Video: India's September industrial output shrinks 4.3%

 

[d00od00o]

How About Fixing Jobs Now, Mr. Modi?
15 Nov 2019
The Bharatiya Janata Party (BJP) government at the Centre, led by Prime Minister Narendra Modi, has been busy ‘fixing’ Kashmir, Ayodhya, and other issues, even as Modi himself has starred in the ‘Howdy Modi’ extravaganza in the US, spent meaningful time with Chinese President Xi Jinping and otherwise paid attention to various international issues. But there is a storm brewing right here in the country that Modi and his government colleagues seem to be blithely unaware of -- the unstoppable tide of joblessness that keeps growing and growing.

The latest monthly average of the unemployment rate, as estimated by the Centre of Monitoring Indian Economy (CMIE), stands at 8.5%. That’s almost double of what it was in November 2017. It has been rising relentlessly since then.

Even more distressing is the fact that the employment rate (share of working age population that is gainfully employed) has shrunk in these two years. In November 2017, a total of 43.83% of the working age population was employed and now it is 43.1%. [See Chart below]

This may not seem much but remember – the population of working age population is growing constantly as more and more people cross the age of 15 years and start looking for jobs. So, even if the share of employed remains constant, it actually means a lesser number is getting jobs.

Note that at any one point, the share of employed and unemployed will not add up to 100% because there is a vast number of people who are not in the workforce at all – they are either studying or, the largest share are women who are not working at all.

Undoubtedly, India is facing a severe jobs crisis that is worsening. The latest uptick in jobless numbers is a direct result of the slowdown that has gripped the economy since September. This has led to vast numbers of industrial workers getting retrenched or simply thrown out. The numbers run into lakhs and span diverse sectors – from automobile and auto-part making to textile to cement, steel, transport, construction, leather, gems and jewellery, etc.

Besides this, the demand slump that has caused this slowdown has also affected sales of consumer products, both fast moving consumables as well as durables.

Although the Modi government has acknowledged the slowdown – at least in deeds if not in words – its response has been typically senseless. The government has announced a slew of measures to give concessions to the corporate sector in a rather childish belief that this will spur investment and rekindle the faltering economy. The Centre slashed the corporate tax rate from the current 30% to 25.17%, including all cess/surcharge. In addition, measures easing taxes on new companies, share buybacks, capital gains, etc. were also announced. These concessions add up to a staggering Rs.1.45 lakh crore, which finance Minister Nirmala Sitharaman described as a “stimulus” to the economy, but which actually means that much loss of taxes.

The government has also announced roll-back of enhanced surcharge on foreign portfolio investors, infusing Rs 70,000 crore in banks and Rs 20,000 crore for housing finance companies through the National Housing Bank, a Rs 50,000 crore scheme for promoting exports, a Rs 10,000 crore scheme for helping real estate developers in completing unfinished houses, a roll-back of angel tax for start-ups, and so on.

The Centre has even set up a fund of Rs 25,000 crore to help builders finish their projects, which are estimated at over four lakh dwelling units. Besides these tax concessions and bail-outs, the government has also grabbed this opportunity to declare the merger of several public sector banks, open up the coal mining sector for 100% foreign direct investment, ease bank credit regulations to provide more funds for investment, etc.

The Modi 2.0 government has set a dubious record of giving freebies to corporates – in just 120 days it has announced 33% more concessions than the whole of last year. In the combined five-and-a-half years of the Narendra Modi-led Bhartiya Janata Party (BJP) rule since 2014, Rs.5.76 lakh crore worth of corporate freebies have been announced.

Yet, there is no attempt to address the jobs crisis directly. All the measures listed above are meant to help corporate bigwigs. There is no guarantee that they will use this money to expand investment and create capacity in order to provide jobs. It is bizarre that a government that swept to power in the first term, promising one crore jobs every year, has so completely forgotten its promise.

The recent Assembly election results have proved that ultra-nationalist rhetoric is no longer going down well among people who are weighed down under the economic crisis. This trend is bound to magnify as time passes and Modi’s attempts to divert public attention through Kashmir or Ayodhya are not going to prevent mass discontent.

 

[jamahir]

Hah !! These IT industry employees want to create employee unions now !!

I worked in an ITES company from 2013 to 2014 and almost created an union. The mistake I did was to resign. If I had not resigned, by now I could have been the leader of a federation of IT / ITES employee unions of India. Missed opportunity.

@Soumitra @Zibago @RealNapster @Mentee @Bilal9 @Moonlight @Joe Shearer @jbgt90

@Indos