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Jobless growth theory debunked: Hiring activity increased by 9% in July

Amit Agrahari by Amit Agrahari
8 August 2018
in Analysis
job, growth

PC: newsnation

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There have been numerous allegations and counter-accusations between ruling party and opposition about job creation in the country. There have been many debates about whether the country has seen a jobless growth in the post-liberalization era. Some people believe that the government’s mandate is only limited to fixing the macroeconomic fundamentals and not job creation.  But we have some positive data about the job growth in the country.

The hiring activity increased by 9 percent from July, 2017. The Naukri JobSpeak Index for July 2018 stood at 2,101 from July 2017 when it stood at 1,928. The index is calculated on the basis of job listings added to Naukri.com every month with July 2008 as the base month and the score of the base month is taken as 1000. The data for the subsequent month is compared with the data of July 2008. The hiring has been positive in the previous two months that too with a growth of 9 percent in June and 11 percent in May. “Non-IT sectors like auto, auto ancillary, real estate, construction, and BFSI continue to lead the growth. We can expect the job market to be cautiously optimistic and move further north in the months to come,” said Naukri.com Chief Sales Officer V Suresh. The increased activity in the banking and insurance sector was the primary drivers of job growth with a growth of 34 percent and 21 percent respectively.

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Surprisingly the growth in real estate and construction/engineering also showed good performance with 28 percent and 20 percent growth respectively. This is positive news for the real estate sector which was suffering from the double whammy of demonetization and Real Estate (Regulation and Development) Act. The real estate was the primary venue for the investment of black money and it was hurt badly after the demonetization exercise and further the RERA brought many rules and regulations for the sector which has been largely unregulated over the years. The revival of real estate is good news for the economy because this sector creates mass employment for unskilled laborers as well as the skilled workforce.

Industrial products/heavy machinery (23 percent), BPO/ITES (6 percent), and Oil & Gas (11 percent) also saw a rise in hiring. The slowest rise has been in Information Technology (IT) sector due to bench strength and protectionist stance by the American government on Visa and imports. The oil and gas sector has performed well with the rise in fuel prices. 

On experience basis, over 16 years band saw a rise of 12 percent in recruitment activity while the entry-level jobs (0-3 years experience) witnessed a 10 percent increase in July 2018. The hiring for well-trained talent with 4-7 years of experience grew 9 percent. According to a report among metropolitan cities, Delhi NCR saw a rise of 14 percent in hiring activity, Chennai was up 13 percent and Mumbai by 4 percent. The numbers of jobs in Delhi NCR (National Capital Region) are growing consistently over the last few months which indicate that the growth story has shifted from western India to northern India. The positive data on jobs growth also falsifies the jobless growth claim of the opposition. Now Congress president Rahul Gandhi owes an apology to the parliament for his blatant lies in the house.

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