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The growth in employment generation fell as much as 40 per cent in the third quarter of 2013-14 compared with the second quarter, in eight sectors tracked by the Labour Bureau. This was primarily due to a contraction of employment provided in the exporting units of the information technology-business process outsourcing (IT-BPO) sector.
According to official data released by the bureau, the third quarter saw 83,000 people additionally employed in textiles, leather, metals, gems and jewellery, IT-BPO, automobile, transport, handloom and powerloom industries, compared to the second quarter. The additional jobs in these industries in the second quarter compared to the first quarter was 143,000.
The bureau’s is a sample survey of 2,160 units in India and, therefore, should be considered only as an indicator.
Employment expansion dwindled because IT-BPO could provide additional employment of only 17,000 during the October-December 2013 quarter, against 61,000 jobs in the previous one. Within it, jobs contracted by 21,000 in exporting units in the third quarter against employment generation for an additional 10,000 persons in the July-September one.
Recently, business chamber Assocham and consultant KPMG came out with a study saying India loses about 70 per cent of all incremental voice and call centre business to competitors such as the Philippines and eastern Europe. And, unless the domestic BPO sector diversified the delivery footprint to take advantage of low-cost centres, India’s competitors would further consolidate.
The biggest provider of employment was the textiles industry, which generated jobs for an additional 92,000 persons in the third quarter, against 66,000 in July-September.
However, all the additional employment came from exporting units, while job generation fell in units catering to domestic markets. The exporting units created 94,000 more jobs in the April-December period against 41,000 in the year-ago period. On the other hand, non-exporting units saw employment fall by 2,000 workers against an addition of 25,000 jobs over the same period.
Ajay Sahai, director-general of the Federation of Indian Export Organisations, said textiles exports showed a 15 per cent year-on-year rise to both Europe and the US in the first 11 months of FY14, as these regions recovered a bit.
“Also, exporters are diversifying to Japan, Israel and South Korea as well,” he added.
CARE Ratings’ chief economist Madan Sabnavis said: “Textiles is the industry where we are more competitive in export market vis-a-vis other industries.”
Also, textiles does not require highly-qualified skilled labour. “So if we perform better in export markets, demand for labour in those industries increases,” Sabnavis added.
Textiles exports recovered smartly in the first 10 months of FY14 from a slowdown in the previous year. Within this category, cotton yarn, fabrics rose 21.37 per cent to $7.33 billion against a mere 6.65 per cent growth a year ago. Similarly, cotton ready-made garments rose 8.34 per cent at $7.29 billion against a contraction of 14.80 per cent in the previous year.
Man-made yarn, fabrics and made-ups rose 11.26 per cent to $4.15 billion against a decline of 12.58 per cent.
Ready-made garment exports also saw a rise of over 25 per cent to touch $2.49 billion.
Leather industry generated an additional employment for 13,000 persons in the third quarter of FY14 against 6,000 in the previous quarter. All of it came from the exporting units, while those catering to domestic markets did not provide additional employment to even a single person.
Metals, auto, gems & jewellery, and transport sectors saw a decrease in employment by 20,000, 11,000, 6,000 and 2,000 persons, respectively.
While the auto industry is facing a slump because of low demand, the gems & jewellery sector is experiencing rough weather due to curbs on gold imports aimed at bringing down the current account deficit.
Handloom and powerloom did not provide employment to any additional person.
Ajay Sahai, director-general and CEO of the Federation of Indian Export Organisations said textiles exports show a 15 per cent year-on-year rise to both Europe and the US in the first 11 months of FY14 as these regions recovered a bit.
