HYDERABAD: As demonetisation ushers in a new economic order in 2017, even the jobs market is expected to see a new trend. According to experts, while job growth is increasing in the Services, Logistics, ITES sectors, Manufacturing and Small and Medium Enterprises (SME) sectors might take time to adapt to new changes, consequently affecting jobs creation.
With the digital economy set to boom and as companies operating in e-commerce and cashless payments sector grow, it is not just jobs in these segments alone that are set to grow, but also those in affiliated sectors like logistics, services, ITES, etc.—all of which provide support services. Recruitment consultants like Team Lease estimate a 18 to 20 per cent growth in these sectors.
But the prospects for job creation in Small and Medium Enterprises (SME) sector is yet to be ascertained. According to industry players, the industry itself is yet to figure out how demonetisation will affect jobs.
“Small and Medium Enterprises (SMEs) have been the ones which were most affected by demonetisation as they mostly deal with cash. We used to see at least 10 per cent growth in jobs in SME sector every year.
The number of new jobs due to be created this year will be dependent on how demonetisation affects sector, for which we have to wait till the financial year end,” said Ravindra Modi, President of Federation of Telangana and Andhra Pradesh Chamber of Commerce and Industry (FTAPCCI), who runs an SME.
SMEs across various verticals have faced problems even in paying wages during the past 50 days and they do not see any marked improvement in the business environment any soon. They have no expectations of a rise in the number of jobs soon.
The uncertainty about job creation in 2017 is evident even in the manufacturing sector.
“Infrastructure and cost of finance have been major problems for the manufacturing sector. We hope that demonetisation will bring more money into coffers of the government and banks, increasing government spending on infrastructure and bank lending to the manufacturing sector at cheaper interest rates. If this happens, the sector might see growth in jobs in the future,” pointed out J S R K Prasad, vice-chairman of CII, Andhra Pradesh and CEO of a manufacturing company.
Most of the industrialists across various states express the same opinion expressed by Prasad regarding job prospects in manufacturing sector in 2017.
The short-term prospects for creation of new jobs in the sector, however, appear bleak. Even automation is expected to decrease the number of lower level jobs, though quality hiring might increase.
“The new economic order will create a marked change, even in the job market. While jobs in sectors like services and logistics will increase, manufacturing sector might not see a very positive trend. While manufacturing may see about five to seven per cent rise in jobs in 2017, even these jobs will be in small volumes, providing opportunities to only highly qualified graduates,” pointed out Sudeep Sen from Team Lease, a recruitment consultant.
Industry body ASSOCHAM meanwhile expressed concerns over the decrease in jobs in both manufacturing and SMEs. Even job portals like Wisdom Jobs predict that job growth in SME sector will be stagnant at six to seven per cent, while in manufacturing sector short-term outlook appears subdued, though in the long term, jobs may see a rise.