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Jobs may rise but quality, automation a concern: Report

Press Trust of India  |  Mumbai 

Projecting a pick up in the domestic job market, Securities has raised concerns on quality of such employment and has flagged risk from a global shift towards

According to the report, job creation could push up growth towards 7.5 per cent and earnings growth at 12-15 per cent over the next five years.

"Consensus estimates of a near-term earnings recovery and implied long-term growth incorporate a sharp pickup in job creation," said in a report.

"However, we believe the quality of jobs could underwhelm, and there are downside risks, including from the global 'utopia' scenario, over the long-term," it added noting that the markets have not factored in these risks.

The brokerage has estimated creation of 4 million jobs annually over the next five years, up from an estimated 2 million per annum over the past five years.

The report has identified four broad areas that can help drive job creation. They include traditional/local services like banking, retail, logistics and IT; housing/construction; and


As per about 13 million people will enter India's working-age population annually over the next five to six years. Considering the labour participation rate, about 7 million of these people will actually be looking for a job.

Noting that a large global shift towards could serve as a significant negative for the job market. It would be inherently less labour-intensive, and UBS said this could be a "grey-sky scenario for India" in terms of and earnings growth, and could also lead to major social issues.

"This impact is likely to be beyond the next five years and government policy response (more protectionism and a Universal Basic Income) will matter," UBS added.

It also expects growth in the number of households to be stable in the lower-middle income bracket but decelerate in the middle-middle bracket, reflecting a "worsening job quality mix, with slowing growth in IT services jobs but accelerating growth in construction and apparel jobs".

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, January 12 2018. 17:40 IST
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