India's listed companies employed a record 1 crore employees in 2021-22, and wages paid to them were of the order of ₹700,000 per employee, private think tank CMIE (Centre for Monitoring Indian Economy) data shows.
This is much higher than the average salary received by factory employees, which is close to ₹3,00,000. The average salary paid this year by listed firms was also higher than the average wages (₹2,63,000) received by all salaried employees of listed or unlisted or big or small enterprises in 2021-22, CMIE’s Consumer Pyramids Household Survey shows.
"Average wages paid by listed companies is more than twice the salaries paid by other enterprises," writes CMIE CEO Mahesh Vyas. The average wages paid by an enterprise rise as the size of the company increases, he adds, making a case for a bigger ecosystem of listed companies in India.
"Using a set of around 3,300 listed companies for which data was available for 2021-22, we create ten sets of companies by the size of the company. The top decile of companies is the largest ten per cent companies."
Companies of the top decile had an average annual wage rate of ₹10 lakh per employee. The second decile that accounted for another 15% of the total employees of listed companies had an average wage rate of ₹7,36,536 in 2021-22. The long tail of 80% of the companies employs less than half of the total employment and pays lower wages. The wage rate drops to ₹5,50,000 in the third decile.
The CMIE data shows the wage rate is directly proportionate to the size of the company, which shows it would be much better if India has many larger companies than small-sized companies, writes Vyas.
"Apparently, the solution to India’s employment problem should be found in larger companies that are required to make copious disclosures rather than those in the medium and small-scale sectors that are poor users of labour."
Fortune India in this month's issue had reported that during 2022, Fortune 500 India’s cumulative revenue surged 35% year-on-year to around ₹119 lakh crore ($1.57 trillion) even as combined profit vaulted 60% to ₹9.97 lakh crore ($131 billion).
On the overall employment situation in the country, minister of state for labour and employment, Rameswar Teli in a written reply in the Lok Sabha today said 53.55 crore were employed across industries in India as of FY20, up from 48.76 crore in FY19. Of this, less than half or 23.27 crore were employed in agriculture alone in FY20, up from 19.86 crore in FY19.
On the unemployment rate among labourers, he said as per the available latest annual PLFS (Periodic Labour Force Survey) reports, the unemployment rate on usual status for persons of age 15 years and above was 6.0%, 5.8%, 4.8% and 4.2% during 2017-18, 2018-19, 2019-20 and 2020-21, respectively. This, he said, shows the unemployment rate in the country has declined. He said the Centre has taken a number of initiatives to boost employment including Aatmanirbhar Bharat Rojgar Yojana, Vendor’s AtmaNirbhar Nidhi, Employment Generation Programme, Mudra Yojana, PLI Schemes and GatiShakti, among others.