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India following America in jobless growth – in 2003-04 Indian corporations eliminated 3.1% manufacturing jobs with healthy growth in the economy
Indian corporations eliminated 3.1% manufacturing jobs while the economy grew a healthy 6 to 7% in that time frame. While the Information technology and Business Process Outsourcing created jobs, even including these jobs, the country lost 0.6% jobs.
The fact that the country lost jobs while growing at a brisk pace is scary. In United States the labor cost is high. Automation and Productivity rise make sense. But with already deflated labor cost in India, it does not make sense to lose jobs while the economy is growing. Experts are asking questions – what will happen if India hits a recession, which is very probable later this year. According to some, if a recession hits, India can lose in excess of 12% manufacturing jobs and 6% overall jobs. If the Western nations go into recession at the same time, outsourcing industry can actually lose a staggering 38% jobs and the country can lose close to 46% jobs. Hopefully nothing like that will happen. But just focusing and servicing on IT and Business Process Outsourcing can be catastrophic.
According to media reports in India, all is not that gloomy.
The services sector, in particular, created plenty of jobs, particularly in software and private banks. IT companies in software, hardware and data sourcing, created more jobs than any other sector: 26 IT companies increased their staff strength by 45,872 or 39.5 per cent, taking the headcount in the IT industry to 161,882 in 2003-04.
Private banks, which are expanding their retail business reach, added 5,551 employees.
Infosys Technologies remained the largest single recruiter in 2003-04, adding 7,988 IT engineers and managerial staff. Wipro added 7,422 employees, while TCS increased its headcount by 4,607 to 30,121.
Satyam Computer and HCL Technologies increased their manpower by over 4,000 each, while Digital GlobalSoft and ICICI Bank increased their staff strength by over 2,500 each.
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