2023-07-06 05:55:00
As the Indian economy recovers from the pandemic, India’s finance ministry in its annual report has said that expert services is the major contributor to the job creation in the formal sector. Citing EPFO or Employees Provident Fund Organisation data, the report said that expert service sector (consisting of manpower suppliers, normal contractors, and security services, among others) contributed 51% to formal job creation in FY23. The education sector, including schools, and financing establishments have also significantly increased their contribution to formal employment generation, the report adds.
But the pace of job creation in the fourth quarter of FY23 moderated following growing significantly in the first three quarters The moderation, in part, was due to the slowing of employment generation in the Information Technology (IT) sector amid a global slowdown in IT hiring activity following the exuberant hiring during the pandemic period, the report said.
Overall, job creation in the formal sector has been accelerating over the years, the report said, citing payroll additions under the Employees Provident Fund Organisation (EPFO). In FY23, net members added by EPFO reached a four-year high, growing by double-digits over the previous year.And going forward, the finance ministry report says, employment levels are expected to remain buoyant, mainly driven by rapid digitalisation, technological advancement, and the expanding implementation of the PLI scheme, thereby creating employment avenues for both semi-skilled and skilled workers. Here are other highlights from the report:Rising employment levels in the formal sector have also been supported by improved education infrastructure and enhanced quality of education, which has increased the employability of the young labour force
At a broader level of the manufacturing and services sector as well, rising job creation is evident.
Growth in new business is seen to be behind job creation, particularly in the manufacturing sub-sectors of electronics, auto and auto ancillary and chemicals and the services sector of insurance, hospitality and banking. In the services sector, particularly, increased public awareness of health insurance products post-pandemic, rising business and leisure travel, and rapid expansion of digital banking services were the major factors contributing to new job creation.
The rising employment levels, along with calibrated fiscal stimulus and a significant upscaling of public capex, created a demand boost in the Indian economy to accelerate growth from FY21 to FY23.
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