Hiring is likely to have slowed in the fiscal year 2012 amid poor growth and high inflation. A survey by the Labour Ministry reveals that that employment at the start of the calendar year 2012 was the lowest in four quarters.
Around 81,000 people were hired in India in January-March 2012, the lowest compared with the previous three quarters. The maximum increase in employment during the period was observed in the IT and BPO sector, but even this was the lowest increase recorded vis-à-vis the previous three quarters.
The survey results also indicate that employment in the handloom and powerloom sector, which registered an increase in employment during the three quarters preceding January-March 2012, witnessed a decline at the start of the calendar year. A similar trend was witnessed in the gems and jewellery sector.
The health of the leather industry has been suffering for an even longer period, according to the employment numbers. Employment there has been falling continually in the three quarters since June 2011.
GDP growth in India stood at just 6.5 per cent in the 2012 fiscal, the lowest since the 2002-03 financial year, a drought year in which the growth rate fell to 4 per cent. In the financial year 2013, projections by the Union Government and other independent experts have pegged GDP growth below 5.5 per cent.
The main impact of any economic slowdown on the livelihood of people derives chiefly from the loss of employment. If the expected increase in unemployment occurred in 2012, it is possible that an increased number of people families will be categorised as “new poor” at the start of 2013. This could have a cascading effect. If the slowdown in the rate of growth of the economy continues or worsens, the impact is bound to hurt not only the millions living marginally above the poverty line, but also threaten to tip them back into poverty, according to another report by Albright Stonebridge Group, a global strategy firm.
Source: Business Line