Government may hire lakhs of temporary workers

With employment rate staying stubbornly low or stagnant and the unemployment rate rising gradually, it could be the government that may push the job numbers, albeit temporarily, this fiscal.

Suchita Dutta, executive director, Indian Staffing Federation (ISF), told DNA Money that while e-commerce, retail, hospitality and, to some extent, agriculture sectors would be major employers this year, the government hiring could prop up the final figure.

She is expecting the employment rate to look better this year as the government gets its various projects started, along with pushing the ongoing ones in a pre-election year. According to Dutta, projects like National Sample Survey Office (NSSO) survey, Ayushman Bharat – National Health Protection Mission (NHPM), Smart City, Digital India and others could see lakhs of people getting hired on a temporary basis.

"They (government) could be a major employer this fiscal. Right now, we are not sure but due to a lot of initiatives like the NSSO survey, Ayushman-Bharat NHPM, Smart City, Digital India and others, the government is likely to channelise a lot of jobs. They might be employing people in the flexi-staffing role or something like that. NSSO, I know for sure is hiring right now because they are planning to conduct their survey very soon," said the HR expert.

Dutta said the NSSO project will require lakhs of people over the next three to four years. She said such an employment may not be sustainable over a long period but they were better than having no jobs at all.

"It is good to have people on the job, even if it is for a temporary period because having no job is obviously a worse situation. If there is an avenue where the government is able to create these jobs, even if it is for a couple of years, then it is good as people can get employed and possibly gain experience," she said.

Besides the NSSO project, the government is also speeding up the medical insurance programme – Ayushman Bharat, which aims to provide a cover of Rs 5 lakh per family annually to 10 crore poor families. For this, it is looking to deploy around one lakh Mitras at the government and private hospitals to enrol families for the government medical insurance scheme.

Likewise, the government's various infrastructure projects may also indirectly push up the employment.

That said, the government continues to shy away from filling up lakhs of vacancies in various government organisations and institutions even as they pile up. Recent parliamentary responses, which provided data on unfilled vacancies in the state and central organisations, reveal that over 24 lakh positions were vacant.

Among these, the most number of vacancies were for the elementary and secondary school teachers at 10.1 lakh, followed by police workforce at 5.4 lakh.

The Centre for Monitoring Indian Economy (CMIE), the organisation that tracks business and economic data, puts the number unemployed Indians currently looking for jobs at 3.1 crore.

A recent report authored by Mahesh Vyas, MD & CEO of CMIE, said the number of persons employed was down 0.01% or 4.65 lakh to 40.62 crore in FY18 from 40.67 crore a year before.

According to Vyas, one of the reasons was the investment ratio recorded at 28.5%, lowest since FY12. This was a reflection of the falling investment demand. Last year also saw a drop in new investment projects by 38.4% and in completion of projects by 26.8%, coupled with a 15% drop in foreign direct investment (FDI).

Shrinking of investments pinned down employment rate last fiscal to 41.45% from 42.59% a year ago even as the unemployment rate tumbled to 4.66% from 7.55% during the same period.

Vyas, flummoxed by falling employment and unemployment rates, explains the phenomenon by saying that it occurred due to labour participation rate dipping after demonetisation.

"As unemployed persons stopped looking for jobs, they were not called unemployed any more. They hadn't found jobs, so they were not classified as employed either. They simply exited the labour force. This led to shrinking of the labour force and a misleading fall in the unemployment rate," he said.

Last fiscal, the labour force fell to 42.61 crore from 43.97 crore in FY17 while the labour force participation rate, which labour force as a percentage of the working-age population, fell to 43.5% from 46.1% during the same period.

Last fiscal's anomaly has been corrected in the first quarter of the current fiscal. The April-June quarter of this fiscal has registered a fall in employment rate to 40.4% from 41.9% a year back while the unemployment rate has inched up to 5.5% from 4%.

But, Vyas does not see a turnaround yet; "not yet. If 2017-18 was seen as a difficult year, 2018-19 is already a challenging year. Rains have been somewhat erratic, kharif sowing is 10% below last year's, crude oil prices have risen, FPIs are exiting, the rupee is weak, the balance of payments is vulnerable and the fisc is in danger of running amok. These are not the best times to expect private entrepreneurs to invest and so not the best time to find new jobs," he said.

And as private entrepreneurs steer clear from investing, Anandorup Ghose, partner, Aon Hewitt, said in a pre-election year it was for the government to pump in money in infrastructure, which will translate into higher employment.

"The question, however, is what kind of employment. This is not where the government is competing with the private sector. A lot of this project staff is somewhat contractual and also more in the blue-collar category. Not just labour level but also at the absolute junior level. You will need more nurses, more toll collection staff. It would be the lowest level of white-collar job," he said.