Employment outlook -2020 & beyond

Since past few years,  Indian economy has witnessed many challenges and is currently reeling through  slowdown because of changes in the business ecosystem, government policies & frameworks (which should have worked as 'enabler')  introduction of a simplified tax regime called GST (which has added to it further, negatively). Much of this is directly impacting the overall economy, declining employment rate, high cost of education, healthcare etc are the major concerns at the root of economy.

Manufacturing, Retail, Telecom, BFSI, Services are all a big hit in account of socio-economic factors,  lower consumption patterns, lower export besides many stimulus'es driving investments, skills development, ease of doing business etc devised by the current government.

The government data showing growth can be debated further as it picks selective  period in which the growth is shown and compared with periods (which are meant to show growth; majorly around festivities and data comparison of the higher demand period is compared) of lowest growth quarters. That's where ADB, WB data differs from the govt published data  and changes the outlook to some extent. 

Overall, year 2020 will show recession with drastic job cuts across segments under services, Telecom, Banking, Manufacturing as the economy is reeling through toughest slowdowns. Production, agricultural outputs are de-growing in account of sluggish demand in the domestic & international markets and to blame it- GST, demonetization, slowdown across markets, lower consumption  etc can be listed out.

Lets review the impact and the employment outlook industry wise:

Telecom: Incumbent player 'Jio' in this segment is blamed for job cuts across Telecom sector. It all started in 2011 when the 2G scam case was filed, players like Uninor, MTS, RCom, Aircel were badly hit. The market was first opened for Telecom sector and open bids were invited and within few years this became a scam and players who were found involved bribing were barred from operating in the country thus leaving thousands of people unemployed. These cancellation also impacted over 50 OEM's and scores of VAS services providers. 

2018-19 was more of a gloomy year as, at one side the overall ARPU had gone down INR 100 and at the other hand asset heavy players like BSNL/MTNL going almost out of the business and at the other hand, DoT had penalized Airtel, Idea-Vodaphone and others. Telecom sectors contribute to 6.5% of the GDP and employs over 2.2 million peoples. More detailed report  is available Here 

2020 will pose higher unemployment rate in this sector adding up to a million job cuts since 2014 or so, directly or indirectly. 

Banking: Banking saw few of the biggest frauds such as #PNB and further deepened the impact because of demonetization and still is reeling through higher NPA's, cyber frauds, defaulters from corporate & agriculture sector. Bad debts contributed to over 9.34 Lakh crores in 2019 FY and wrote off 1.9 trillion worth of bad loans. Coming financial year may add to this while Deloitte report highlighting digital banking and payments shows valuation growth of 6.9%  while the employment in unlikely to maintain the growth in account of digital operations, competition, NPA and overall economy impact on employment generation.

Banking will come under the pressure of consolidation, write offs thus limiting the bank to aptly move to digital banking and channels which are low in human resource capital. All of this would mean low employment rates and limiting current resources to optimize on human resources costs.

Manufacturing: Manufacturing sector has seen many bold moves & quick decisions by the government to increase the production output, opening up FDI for the sector and working closely with various electronics, mobile and electronic brands to set up their shops in India. 

Manufacturing sector accounts for 12 percent employment and economy contribution of 25-30 percent on GDP dips at 0.6% in account of slackening demand and poses further questions on how it will generate over 90 million jobs and more ironically,  for the population which is under 35 years of age. The large scale employment from this sector will be a big challenge. More data is Here. The challenge will be to rework on the modalities of a sector hit by lower demands across consumer segments, automobile and to maintain the growth & employment rate together with above demographics.

Services:  Services sector has contributed to 54.17 percent of Gross Value added and contributes about 66% of GDP; continues to be dominated by services such as Healthcare, Tourism, Education, Engineering, Transportation, IT, Insurance, Retail, Real estate etc. The largest hit segment under services sector is Real -Estate which has impacted manufacturing and banking sector as well because of regulations which were long awaited, GST implementation and impacts few more services linked with the segment. 

#Source- Economic Time

Services sector has failed miserably on the employment generation front despite many large scale government programs such 'Skill India' but posed a rosy picture in 2018 which saw some growth of 7.4%

Overall, the employment outlook in 2020 will fall flat besides contributing elements & factors such as product innovation, skills availability, supply chain, changes in corporate tax rates, GST, foreign investments, ease of doing business etc and negative factors such as cost-reduction, consumer demand, political movements will all contribute to pull it down further limiting the overall employment generation possibilities across sectors.