By Disha Rawal
A lot has been said about job creation in India, especially about how employment growth has suffered in the first three years of the Modi governments tenure. The employment rate is also a politically important variable and has direct implications on peoples lives. However, there are reasons to rejoice over the state of the Indian economy.
An economic turn-around
Recruitment firms have recently reported that the Indian job market is set to expand by as much as 20 percent. Firms like Naukri, IKYA Human Capital Solutions and PeopleStrongamong othershave received higher employment mandates this year. This follows a lacklustre year for the job market. Reports have further noted that sectors such as manufacturing, ITeS, transport and hospitalitywhich saw a fall in hiring in 2017are also expected to make a partial recovery this year. Sectors like agriculture, education and healthcare sectors, which saw positive hiring trends in 2017, are expected to continue growing steadily.
The increased demand for employees has been at all levels; senior, middle and junior. This is a heartening development since it comes on the heels of economic underperformance, which can be attributed to demonetisation and the implementation of the GST. One of Indias major labour-absorbing sectors, IT, was hit by the tightening of US Visa rule and immigration controls. However, with the growth rate returning to 7.2 percent in December and India becoming the worlds fastest-growing large economy, there is still hope.
The hiring profile has also reportedly changed. As in the IT sector, artificial intelligence and automation have created new needs in the job market and different skill sets are now being demanded by firms. The reports also suggest that firms are now hiring highly skilled workers. This data may confirm the widespread fear of robots taking over many jobs and may serve as an important policy indicator.
The state of the IT Industry
The increased hiring demand comes from sectors like pharma, fintech, automobile, logistics and infrastructure. The IT sector continues to remain cautious. In fact, it has been suggested that the major hiccup in the success of the sector is the risk-averse approach of the IT firms. Industry giants like TCS and Wipro have failed to integrate acquired companies or grow into niche markets while global firms like Accenture have aggressively purchased small companies and treated them like R&D investments. This risk aversion is a primary reason why Indian companies are unable to benefit from the efficiency offered by new technologies.
The reports say that a major reason why companies want to hire more employees is that they want to draw young talent away from their rival start-ups. Start-ups are only expected to get bigger and better, especially keeping in mind the schemes launched by the government to facilitate start-ups. We can expect this factor to play an important role for a little longer as companies boost hiring to compete with start-ups. The governments push towards promoting small and middle-income enterprises has also contributed to the rise in gainful employment levels in India.