Employment generation slows in Q1 as growth falls to 4-year low

Employment rose 106 thousand persons in the direct category of workers

Textiles, leather, metals, automobiles, gems and jewellery, transport, information technology/business process outsourcing (IT/BPO) and handloom-powerloom generated just 86,000 net additional jobs in April-June against 107,000 in the earlier quarter and 168,000 in the third quarter of FY13, a survey by the Labour Bureau, Shimla, showed.

The sectors gave additional jobs to 361,000 in the first quarter of FY14 year-on-year, according to the survey. The latest round of survey covered 2,301 sample units. Most of the employment was by textiles. Barring textile and leather, none could provide jobs to a higher number in the first quarter against the previous two sequentially.

Employment rose 106,000 in the direct category of workers, while it dipped 20,000 for contract workers in the first quarter of FY14 over the fourth quarter of FY13. A ban on iron-ore mining dampened the chances of job creation in metals. Transport saw loss of jobs for 200 in the first quarter against 3,000 the previous. Automobiles has been seeing a slump, visible in employment generation.

Gems and jewellery saw tight conditions after import duty was raised to eight per cent in June against six per cent earlier. In August, it was raised to 10 per cent. IT/BPO could create 300 additional jobs despite it doing well after the US started recovering.

This was largely due to the sector going capital-intensive, said an analyst. Economic growth had fallen to a four-year low of 4.4 per cent in the first quarter of FY14.