Hiring to remain stagnant until beginning of next fiscal

The hiring outlook in the private sector is expected to stay muted till the beginning of fiscal 2018-19, an ASSOCHAM assessment, based on its feedback from members, indicated.

It was necessitated as India's corporate sector placed most energies on rationalising costs, including the wage costs, and tried to deleverage its balance sheet.

"The focus right now is how to deleverage, consolidate, exit from non-core businesses and achieve lean and mean balance sheets. Going forward at least in the next quarter and a half, the corporates would be busy improving their margins and reducing their debt costs, even as the top line growth may take a back seat," the paper noted.

It further observed that given the current circumstances, the fresh hiring prospects do not look bright maybe, for the two quarters. However, it is expected to pick up in the next fiscal, with wage cost control as the key area of priority in the short term.

It noted that most of the churning is taking place in telecom, financials (including private sector banks, non-banking finance companies), Information Technology, realty and infrastructure.

Significantly, as the PSU banks would also bring down their employee cost to their operation ratio, post re-capitalisation by the government, the fresh hiring may also come down there as well, it said.

"Though the Moody's upgrade has given a sentiment boost, the next two quarters would be challenging for the private sector. But things would then improve and some of the pain points of the present like high debt, slow consumer demand, should ease from April, 2018. In any case, barring any untoward event, the fiscal 2018-19 would be better than the current financial year," said D S Rawat, Secretary General of ASSOCHAM.

Furthermore, the boom in the stock market, though being triggered by a huge liquidity play, is also reflective of the uptick in the economic growth going forward.

The market is at ease even with higher valuations, riding on the hopes of a pickup. The problems surrounding the Goods and Services Tax (GST) should be settled in the next few months, the paper noted.

The optimism also stems from India' s sound macro indicators like moderate inflation, stability in foreign exchange, robust foreign exchange reserves and an improving trend line in exports.

However, a thing to watch would be crude oil prices, which could be a spoiler if they move up significantly from the present level.