Jobless Growth? Figures Show Otherwise

In some heartening news from corporate India, the combined bill for wages and salaries for listed companies showed a smart growth of 12.6 per cent in the first quarter of the current financial year. This figure compares very favourably with the growth registered in the previous financial year where the bill for wages and salaries grew by 8.7 per cent only.

It is also being reported that companies have resumed hiring after a lull of three years which should be a huge positive for the government as it looks to meet the job aspirations of the booming youth population. However, the rise in salaries and wages of employees continues to trail corporate earnings and operating costs. It is being estimated that companies’ combined revenues clocked a growth of 16.3 per cent in the first quarter while their raw material costs surged by 20.7 per cent.

Analysts have estimated that the growth is being largely driven by private consumption and export-oriented sectors such as information technology, pharmaceuticals, metals and mining among others. However, private sector capital expenditure continues to be subdued indicating that some of the issues of stranded projects and lack of adequate capital continue to hinder development in this sector. However, confidence has been expressed that the consumption-led growth would be sustainable unless the external economic situation deteriorates badly.