The latest report by the Centre for Monitoring the Indian Economy (CMIE) says that employment in September has seen a dramatic all-round improvement with the number of jobs up by 8.5 million. To discuss the report in detail and what could it mean for the economy going forward, CNBC-TV18 spoke with Mahesh Vyas, the MD and CEO at CMIE.
Vyas said September has been a very good month, it has shown that employment is up. There is also some uptick in investments and consumer sentiments are up too. A lot of other data from the government and other sources is also very promising. So it is good to see the economy finally showing signs of some pickup, he added.
Vyas said the big increase that happened in employment numbers in September was in the construction sector, which saw nearly 7 million additional job creation. So, it was not the IT sector that saw a major increase in jobs, he said, adding that the IT sector has also peaked out.
According to him, the IT sector is not a very big employer although it probably provides the best jobs in the private sector, although some big companies did employ a lot more people, he added.
There was also an increase in manufacturing, mostly in the food industry, he said. Vyas adding that the agriculture season is coming to an end and the food industry is getting ready to absorb the crop and process it.
So, construction has taken a big increase in jobs, said Vyas.
Throwing more light on the employment numbers, he said, "At over 406 million it is the highest that we have seen in a long time and we are very close to what employment number that was before the pandemic hit us, which was around 408.5 million. There is always a possibility that this number could come down a bit, or it may not be sustainable but currently, the number looks good."
According to him, not only is the number high, but also a large part of this came from non-farm activities, which means it has come largely from the salaried classes, and to a large extent from daily wage works. So, an increase in employment in daily wage workers is also worth celebrating in the short run because it shows that economic activity has increased. "We are now close to where salaried jobs were before the pandemic hit us and although there is still a gap, we are pretty close," said Vyas.
Employment in nine selected sectors, including construction, manufacturing and IT/BPO, was at 3.08 crore in the April-June quarter of 2021-22, reflecting a growth of 29 percent compared to 2.37 crore reported in the Economic Census of 2013-14, according to a survey. Labour and Employment Minister Bhupender Yadav on Monday released the report of the Quarterly Employment Survey (QES) part (April to June 2021), of the All-India Quarterly Establishment-based Employment Survey (AQEES) prepared by the Labour Bureau.
On capex recovery, he said there is some good news in terms of investments as well. Both, the new investment proposals and commissioning of projects, and particularly the commissioning of projects in the September quarter were the highest compared to any such number in the past several quarters since the pandemic.
“The first time we release the numbers, which is immediately after the quarter gets over is an underestimate because numbers come in with a little delay and so the first estimates always get revised upwards. So this time, I've compared the first release with the previous quarters first release. So, compared to the first release, we are better than in any quarter since the pandemic hit us.
“There is hope that there will be a pickup in investments as well. And a further study of this test shows a lot of it is in the road sector, in infrastructure and the government is also spending a lot on roads. So maybe there is some hope not as great as on employment front,” said Vyas.
Talking about their expectations going forward, Vyas said with regards to investments, it will take a long time to reach investment levels that were earlier, and that are necessary for employment to grow, for the economy to get going.
However, what is important is for the government, in particular, to exploit the situation. If investments in roads are happening at a good pace, if there are investments happening in electricity, for example, there is some pickup in investment, there is some pickup in construction activity. "So leverage this, spend a lot more and spur the economy back instead of being right down in the curve, we are looking up a little bit. So when we are looking up a little bit, it's good to feed that recovery process and the best person to do that is the government," said Vyas.
Though concerns remain over the spread of the Delta variant of coronavirus, the nations that are ahead in vaccination have managed to move with the gradual opening of economic activities. Some of the countries that are witnessing strong recoveries in their job markets are UAE, USA, Canada, UK and Finland.
For the full interview, watch the video