Budget 2022: Leg-up for salaried jobs awaited

The Indian economy is on the mend, with macros showing signs of recovery after being battered for a good part of the past two years. The country’s job market, however, is still struggling to get back on its feet. While economic revival has helped hiring trends, the recovery is disproportionately spread across sectors

As finance minister Nirmala Sitharaman takes the stage on February 1 to table her fourth union budget, industries and job seekers will closely look for announcements that can spur recruitment, especially in salaried jobs.

Numbers paint a grim picture of employment composition in India, where the salaried jobs have been disproportionately hit. The latest CMIE employment survey shows that while job opportunities grew among farmers and daily wage labourers, it shadowed the loss of 9.5 million jobs among salaried employees during December 2021. Despite the government’s push to entrepreneurial endeavours in the country, 1 million entrepreneurs in India lost their livelihoods last month.

This dismal job scenario for salaried employees and entrepreneurs was offset by gains in employment among farmers and daily wage labourers, the think tank mentioned. Agriculture shed employment in December and employment as daily wage labourers increased. These informal employment sectors saw substantial rise in December, but this trend was absent in the case of salaried jobs.

A closer look at the industries shows that the manufacturing sector has lost 9.8 million jobs, the CMIE report said. Around 5 million jobs were lost in the hotels and tourism industry while the education sector saw another 4 million job losses. The overall services sector reported a net decline of 1.8 million on the jobs front. The losses were offset by 7.8 million employment opportunities created in the retail trade segment.

“With due respect to all kinds of labour it can be argued that manufacturing jobs are usually better quality jobs compared to construction and agricultural jobs. And, within services, employment in hotels and tourism or education is often of better quality than employment in retail trade which is mostly delivery agents,” CMIE stated.

A mere increase in employment, as it happened in December 2021, is not good enough, the CMIE report argued.

A recent analysis by Motilal Oswal also indicated that the apparent rise in formal employment seen in EPFO monthly payroll data might be mere eyewash. Economists at the market research firm stated that since every new EPFO subscriber does not represent new employment, it is very difficult to comment on overall employment generation in the country.

The number of gross new EPFO subscribers has also seen drastic downward revision month after month, further complicating the matter, they added. A comparison of the sum of first readings of all months in FY20 and FY21 against final available readings for these fiscals shows 35% and 20% downward revision, respectively.

“So far, the net new subscribers in April 2021 have been revised down by 39%, approximately 42% in May 2021, 28% in June 2021, 21% in July 2021, 17% in August 2021, and approximately 9% in September 2021,” a recent Motilal Oswal report pointed out.

As things stand, much is left to be desired on the employment front in the country. The budget will be expected to bring back quality to employment growth by introducing measures to spur hiring in salaried jobs.

On February 1, industry watchers expect FM Sitharaman to announce measures around job, income, and demand creation.

“India is a domestic-demand-driven economy, and a strong recovery will require a sustainable pickup in demand. That will require more jobs and employment opportunities to fatten consumers’ wallets,” said Deloitte India in its dossier on budget expectations.

“Since micro, small and medium scale enterprises (MSMEs) are the biggest job creators of India, the government will have to emphasise reviving the sector by enabling the ecosystem that supports these enterprises. Identifying their pain areas and devising a solution to help them become a part of ‘Atmanirbhar Bharat’ will aid in their recovery,” it added.

“In addition, access to credit is critical, and providing targeted credit support to these enterprises should be considered. The government may choose fewer segments to start with and revive opportunities for those selected MSMEs,” Deloitte further said.