Most Sectors Saw Fall In Employment In FY21, Finds CareEdge Study
India's organised economy lost jobs in 2020-21, according a study that underscores the impact of the pandemic on employment.
Of the 35 industries studied, only seven saw a rise in employment in the year ended March, according to a CareEdge analysis of disclosures by 2,618 companies. In contrast,19 industries witnessed a drop in jobs in FY20 and 16 reported an increase, leading to a net accretion.
Total headcount for the 2618 sample companies was 74.7 lakh as of March 31, 2021, down from 75.7 lakh the year before. 97,499 jobs were lost, accounting for 1.3% of the workforce.
The seven industries that added jobs amid the pandemic include information technology and banks. In comparison, retailing and mining shed the maximum number of jobs. Not surprising that these were among the sectors that saw activity freeze after the nationwide lockdown.
The results reinforce the first impression given by the smaller samples that there has been a fall in employment in FY21 in the organised sector, CareEdge said in a statement accompanying the report. "If this is the situation in the organised sector, it can be surmised that the position would be grim for the unorganised segment."
Gains And Losses
In FY21, with the lockdowns being imposed and selectively relaxed during the course of the year, industries were differentially impacted which got reflected in the employment numbers, said the report.
Seven industries that added headcount are IT, banks, healthcare, power, consumer durables, chemicals and logistics.
In percentage terms, non-ferrous metals, healthcare and the IT sectors added the most jobs.
Sectors that lost the most jobs included retailing, mining and the broader financial sector.
As a percentage of their overall workforce, the education and training sector lost 29% of employees, media and entertainment 18.7%, retailing 17.1%. Hospitality and trading lost over 12% of their workforce.
Employment across this segment of organised sector firms fell 1.3% in a year when GDP contracted 7.3%. By comparison, when the GDP rose 4% in FY20, formal sector employment rose 2.2%.
“The interesting takeaway is that growth in employment in FY20 did not keep pace with growth in GDP and the elasticity was 0.55. This has been the pattern even in the past as revealed by our earlier studies,” it said. For rapid growth in employment in the organised sector, CareEdge said, GDP growth needs to be in the range of 8-10% on a sustained basis.