Labour shortage, not job loss slows employment

Labour-intensive sectors are supposed to be a big source of employment.

However, these segments such as textiles, gems and jewellery, leather and handlooms are turning out to be laggards.

Employment provided by the four industries shrunk during the January-March quarter of 2010-11, sequentially, a labour ministry survey said.

However, experts attributed this to shortage of hands with labourers getting alternative work in social sector programmes of the United Progressive Alliance government.

The data showed that employment provided by the textile sector, including apparels, contracted by 121,000, while the leather industry hired 8,000 less workers during the period.

Similarly, gems and jewellery provided jobs to 2,000 less number of workers, while handloom and powerloom units provided employment to 18,000 less workers.

"Job loss is not the factor now as the industry is experiencing good growth.

"On the contrary it is facing severe scarcity of labour as those who left the industry during the slowdown, are not coming back.

"They have got better facilities in the villages through programmes like NREGA and others," Gems and Jewellery Export Promotion Council chairman Rajiv Jain told Business Standard.

The industry employs around three million

people, out of which about half a million have gone back to the villages, he said.

"The problem is shortage of skilled labour. There is no question of a job loss here.

The industry is suffering a lot because of this. So, even if we have order bookings coming in, we are not able to meet the demand," said Indian Leather Products Association President Darshan Singh Sabharwal.

In terms of total employment provided by the eight largest sectors -- metals, automobiles, transport and information technology/business product outsourcing (IT/BPO) being the other four -- 174,000 more people got jobs in the quarter.

As expected, the largest rise was seen in the IT/BPO sector by hiring 287,000 more people in the quarter.

It was followed by metals which recruited 16,000 people, automobiles with 13,000 and transport with 6,000 more people.

Overall, employment generated by all the eight sectors in 2010-11 expanded at a rate of over 8 per cent which is less than the previous financial year.

During 2010-11, 978,000 more people got work in these sectors, compared to over a million workers during the previous financial year.

The labour ministry had started quarterly surveys on employment after the global financial crisis hit the Indian economy in September 2008.

In the October-December quarter of 2008, the slowdown resulted in jobs getting reduced by 491,000 people, according to the survey.