Companies resume hiring, but farm sector still in crisis
AWorkforce and Increments Trend survey by consultancy firm Deloitte has reassuring news that Corporate India has resumed hiring at pre-pandemic levels. The Deloitte survey said 78% of the companies had started recruiting at the same pace as before the Covid lockdown. This is a reflection of improved business sentiments. The survey also showed annual salary increments are expected to touch 8.6% in 2022, as compared to a 8% rise in 2021.
However, if one breaks down the data, it reveals that the rebound is not uniform. Most of the hiring is by tech firms, with 96% reporting recruitment levels of the pre-Covid period in 2019. The services sector was hiring at much lower levels of 48%, and manufacturing at 77% of pre-pandemic levels.
The bigger picture too is not that rosy. CMIE’s latest September 6 labour report says the unemployment rate for August 2021 increased to 8.3% from 7% in July. Employment in absolute terms shrank from
399.7 million in July to 397.8 million in August, a loss of 1.9 million jobs. The macro survey showed that the loss of jobs was mainly on account of the farm sector where employment fell by 8.7 million in August. Jobs in rural areas continue to be seasonal and with a monsoon shortfall of 9% in the hinterland, kharif sowing operations required less labour.
The CMIE report however supports the Deloitte survey to the extent it recognises the urban pick-up. With non-farm jobs increasing by 6.8 million in August, some rural folk may have found alternative employment. Of the non-farm increase, business jobs were up 4 million, small traders and daily wagers 2.1 million and salaried jobs 0.7 million.
This data shows that while there is a definite resurgence in industry, particularly information technology, the mainstay of the majority, agriculture, was in the throes of a crisis. This imbalance is bound to have far-reaching implications. Poverty in rural communities and a mass migration into the cities will have a destabilising impact on the economy. Urgent measures, including cash transfers to farmers at the bottom of the pyramid, need to be actioned.