Economic Survey calls upon India Inc to step up hiring, compensation

Stating that job creation mainly happens in the private sector, the Economic Survey said that growth in hiring and compensation has not kept pace with the rising profits of India Inc and there is a need to increase them.

"It is worth reiterating that job creation happens mainly in the private sector," the survey released on Monday said.

It added that in terms of financial performance, the corporate sector "has never had it so good."

"Results of a sample of over 33,000 companies show that, in the three years between 2019-20 and 2022-23, the profit before taxes of the Indian corporate sector nearly quadrupled. Further, newspaper headlines told us that the corporate profits-to-GDP ratio rose to a 15-year high in FY24," it said.

However, "hiring and compensation growth hardly kept up with it," it said, adding, "But, it is in the interest of the companies to step up hiring and worker compensation."

It also said that employment is not just about the money but "is about dignity, self-worth, self-esteem, self-respect, and standing in the family and community."

"That is why it is in the enlightened self-interest of the Indian corporate sector, swimming in excess profits, to take its responsibility to create jobs seriously," it noted.

The survey, however, said that India Inc must find people with the right attitude and skills for jobs. For this, the Centre, private sector, and academia must work in tandem.

"A corporate sector that helps shape the design of higher education with inputs to curriculum, evaluation standards, and faculty will pave the way for a high-quality higher education that market competition brings, replacing regulatory oversight," it said.

The survey also called for a tripartite effort—by the Centre, state governments, and private sector—saying that the states are also responsible for influencing economic growth, job creation, and productivity.

"So, in other words, India needs a tripartite compact, more than ever before, to deliver on the higher and rising aspirations of Indians and complete the journey to Viksit Bharat by 2047," the survey noted.