Job Growth Of 3.7% In Organised Sector Is ‘Quite Good’, Says CLSA’s Nandurkar
Services sector drove India’s 3.7% job creation in FY17, says CLSA’s Nandurkar
Employment opportunities in the universe of listed companies in India rose 3.7 percent in the year ended March, according to CLSA, which said that the country’s jobs problem is a “manageable concern”.
Among listed companies, which employ 50 lakh people, the services sector drove jobs growth as the manufacturing headcount declined 0.6 percent, CLSA's India Strategist Mahesh Nandurkar said in a research note.
Given the trend of more outsourced jobs for non-core purposes, the real jobs growth could be higher than this for the corporate ecosystem.Mahesh Nandurkar, India Strategist, CLSA
So how good is a 3.7 percent growth rate? “Quite good”, writes Nandurkar.
He explains that India's total working class is about 50 crore, of whom 22 crore are in the agriculture sector, which is not creating jobs.
Each year, about 1 crore people enter the Indian job market. That would be 3.6 percent of India’s 28 crore non-farming jobs.
In other words, a potential non-farming jobs growth of 3.6 percent will create full employment for all the young entering the working class – an ideal number.Mahesh Nadurkar, India Strategist, CLSA
Reliable jobs data in the country has been a problem. While agencies like the Labour Bureau collect and publish data, the coverage is small and fragmented. This has made it difficult for policymakers to assess the extent of job creation. Prime Minister Narendra Modi in May had established a task force to fill the gaps in employment data.
Consumer credit growth in tier 2 and 3 towns, driven by the Centre's push for financial inclusion, is one of the key propellers of jobs, said Nandurkar. Employment growth in the “absolute bottom of the pyramid” will need a revival in the housing construction sector which employs 2.5 crore people but is stagnating, he said.
We believe the expected revival of housing construction helped by best-in-a-decade affordability and Government push can create 20 lakh jobs a year.Mahesh Nandurkar, India Strategist, CLSA
With India selling over 2 crore vehicles in a year, the problem of lack of job creation "could be exaggerated", he added.