The economic slowdown has a huge impact on the employment rate as nearly 1.6 million fewer jobs in the financial year 2020 compared to 8.97 million fresh jobs in 2019.
According to research conducted by SBI- Ecowarp, there is a decline in remittances in a few states like Assam and Rajasthan, reflecting downsizing of contractual labourers.
“In FY19, India had created 8.97 million new payrolls as per the EPFO data. In FY20, as per current projected this number could be at least 1.58 million lower,” the report said.
The Employees’ Provident Fund Organisation (EPFO) data covers low paid jobs as the salary is capped at Rs 15,000 per month. As per the calculation in April- October 2019, the net new payroll was 4.31 million which comes out to be 7.39 million for FY20.
The data doesn’t cover government jobs, state government jobs and private jobs, such data have moved to National Pension Scheme, which began in 2014.
“Interestingly, even in the NPS category, state and central government are supposed to create close to 39,000 jobs less in FY20 as per current trends,” the report said.
A sample of data shows that there’s a decline in remittances in states like Assam, Bihar, Rajasthan, orisha, and UP.
“The delay in resolution of cases under bankruptcy proceedings may have prompted companies to downsize their contractual labourers,” it said.
Migration has been an important livelihood for the poor and non-poor of the country in the last years.
People from agriculture and industries are migrating to more developed states in search of job openings. As a result of unequal growth people from Uttar Pradesh, Bihar, the southern part of Madhya Pradesh, Odisha, and Rajasthan are moving to states like Punjab, Gujarat, and Maharashtra.
New Delhi is one of the famous places amongst the migrants due to high job opportunities, the report said.
“These migrants have been making significant financial contributions to their families in their places of origin,” it said.
The report further stated that in the last five years, the overall productivity growth has remained relatively stagnant between 9.4 per cent to 9.9 per cent.
This slow growth in productivity manifests in low wage growth, it said.
It also cautioned the policymakers of such slower productivity growth as it could cause over-borrowing by corporations and households and this can create a big risk to economies and fiscal systems.
(With inputs from agencies)
Source: Thanks WIONews.com