Rating agency CARE looked at the annual reports of 2723 companies and found headcount for the period even before the pandemic started, that is year ending 2020, went up only from about 7 million to about 7.5 million or barely 2.2% annually. While the economy was growing faster, the number of jobs that were being paid or created was actually much much slower. What happens next? BOOM Explains.
Madan Sabnavis, Chief Economist, CARE Ratings, says that this does not show whether we have jobless growth but definitely we get a picture that if GDP was growing at 5.7 or 5.8%, jobs were being created at around 2.2%. It was definitely not commensurate with it. One implication could be that companies were more technology oriented, were a bit more efficient, they were relying more on technology. We have seen in almost all companies where you try to replace labour with technology.
Watch BOOM's Govindraj Ethiraj in a chat with Madan Sabnavis who says that industries that are oriented towards the consumer like banking and finance, FMCG, IT, have actually shown an increase in employment, but in other sectors the growth has been much much lower.
