The pace of job creation, that was completely destroyed during the UPA regime, is definitely showing improvement under Prime Minister Narendra Modi’s rule. As per the latest Economic Survey, presented by Finance Minister Arun Jaitley, about 3.5 lakh jobs were created mostly in IT/BPO, textiles, auto and metal industries during the June quarter (April-June 2015). The survey also points out the contraction in employment in export dependent sectors like gems and jewellery, handloom and leather industries. Last year’s Economic Survey had lamented the era of jobless growth especially during 2004-2012. The growth rate of employment, in the said period, decelerated sharply to 0.5% from about 2.8% in the previous decade.
Thanks to overall reformative steps being taken by the government,“things are looking up again,” says Shiv Agarwal, founder, HeadHonchos & MD ABC Consultants. “The job market is better than what it was during the UPA rule with the pace of job creation improving during the last two years.” The sectors where hiring has picked-up includes power especially its solar vertical, pharma, non-banking financial companies (NBFC) apart from new small and payment banks. But the quantum of jobs that Modi government aspires to create would come only when industrial manufacturing picks-up and the infrastructure cycle is under way. Both the sectors are expected to trigger big demand in the economy for labour and other factors of production. Many policy measures taken by the government for creating an enabling environment for industrial growth has started showing an impact on increased FDI inflows, better performance of infrastructure sector. The landmark initiatives like Make in India, Ease of doing Business, Start Up India, Digital India, and Smart Cities, etc. will provide further impetus to industries and the industrial sector is expected to be the key driver of economic growth in the country. “There is a lot to happen in the next two to three years,” says Agarwal. He expects more significant job creation with the infrastructure cycle picking up coupled with the beginning of defence manufacturing under the newly opened defence sector. The auto sector is also expected to keep looking better. A major impediment to the pace of quality employment generation in India is the small share of manufacturing in total employment. The government wants the share of manufacturing, which presently contributes about 12% to the national economy, enhanced to 25%. National Manufacturing Policy has set a target of creating 100 million jobs by 2022. Promoting growth of micro, small, and medium enterprises (MSME) is critical from the perspective of job creation.