Sunday, January 31, 2016
6 Signs That India's Unemployment Problem Might Actually Be Getting Worse
“Even sweepers in our village have a good standard of living and send their children to English-medium schools," applicant Shamshad Ahmed Saifi of Makhdoompur village, a B Com final year student told the Times of India.
If Q3-Q4 2015, and January 2016 are a sign of things to come, India’s unemployment problem might get worse in the coming years.
The New York Times
Last year, the State Government's Directorate of Economics and Statistics, Chattisgarh, was barraged by 75,000 applicants for 30 peon jobs - for a 14,000 Rupee job that includes a task of fetching tea. It wasn’t surprising that of the 70,000 online applications and 5000 post applications, many included requisitions from qualified engineers and management graduates. According to Census 2011 data, over 20% of Indian youth (between the age bracket of 15-24) or 4.7 crore Indians are jobless.
Last year, realty portal Housing.com announced plans to lay off at least 600 employees, in the wake of wannabe maverick co-founder and former CEO Rahul Yadav's dismissal. "Housing is being completely restructured and performance for each employee across departments is being (scrutinised)," said a top executive at the company, which in July fired for bad behaviour after months of chaos. "While some people have been asked to leave because businesses are being shut down, others because of under-performance and in some cases due to over-staffing," a source stated.
Fire fast is often more pragmatic option than failing fast, and India's fluid business models mean the need for constantly changing skill sets. The one-year-young Gurgaon-based hyperlocal grocery delivery service closed a Series B funding round of $36 million (around Rs 237 crore) in October this year. In 2015, PepperTap laid off some 40 employees, pegging its current headcount at a little over 2,000. Reasons for the layoffs? Poor performance coupled with a business rejig, as the startup shifted from distributed customer care call centres to a centralized one.
"Decreased labour force participation of women in India is a big problem. It is very important to promote their participation, their involvement in the Indian economy," the chief of International Labour Organisation research division Raymond Torres said while launching a new global unemployment report.
According to a McKinsey report, women’s equality can add another 12 trillion dollars to the global economy, and India stands to benefit quite a bit: “...the best-in-region outcome could increase annual GDP by 2025 by more than 10 percent over the business-as-usual case, with the highest relative regional boost in India and Latin America…”
India's unemployment rate remained at 3.5 per cent in 2014 and 2015 but will decrease slightly to 3.4 per cent in 2016 and 2017, according to the ILO findings. However, the number of people seeking jobs will increase to 17.6 million people in 2017 from 17.5 million people in both 2015 and 2016. This is not India's problem alone: "The global economy is not generating enough jobs to reverse the continuing increase in the alarmingly high unemployment situation in the world," said the ILO Director- General Guy Ryder.
Last week, the Prime Minister Narendra Modi unveiled incentives to boost start-up businesses. These included a tax holiday, capital gains tax exemption, a Rs 10,000 crore corpus, and and no inspections for the first 3 years of a startup's existence. It’s the exemptions from labour inspection that have scared India’s labour community.
The popular faces of #StartupIndia, brands that can afford crores in advertising spends have hired – and fired liberally.
Soon after securing Rs 177 crores in funding to help it last another 12 months, Tiny Owl fired 300 people, in spree across multiple offices was that became the topic of much drama. By November, Housing.com had also fired 600 employees, and announced 200 more layoffs after its shareholders tightened budgets. Food Tech players Zomato and Foodpanda had also fired 300 employees each. PepperTap, which closed around around Rs 237 crore in 2015 suddenly fired 40 employees, citing poor performance and a newer business model.
(With inputs from Agencies and TNN)
Source : http://www.indiatimes.com/