No Jobs In India: Jobs Growth Not In Accordance With GDP Growth

Employment is quite unstructured in India given the fact that a large part of the workforce is in the unorganized sector where it gets blurred.

CERA Ratings agency have analysed the issue of job creation in the corporate sector for the last five years. The agency analysed 715 companies and found out the aggregate number of employees rising to 3.92 million in FY-17 from 3.85 million in FY-13. This is a CAGR (Compound Annual Growth Rate) of just about half a percent, which is quite low.

This is much of an issue considering the consonance with GDP growth at the macro level, which grew by an increasing rate till FY16 before slowing down in FY17. This indicates that the organized corporate sector did not witness the growth in accordance with the GDP growth.

Job data for last 5 years

Cost of employment

With regard to employment, the cost of employment to be borne by the companies also matters as it is a part of the committed expenditure and affects the overall profitability of the companies.

CARE Ratings assessed the average salary bands across the sample companies. The salary bill and average salaries of the sample of 1,473 companies, suggests that aggregate salary bill has increased from FY15 to FY17, though salary pay out grew at a slower pace in FY17 at 8.36 percent than that in the previous year at 11.85 percent.

Growth in employment is also associated with increased salaries over the years. The average salary per employee has increased consistently from Rs. 7.13 lakh in FY15 to Rs. 8.35 lakh in FY17.