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S P E C I A L R E P O R T S
'India is not in a bad situation'
Shobha Ahuja of the PHD Chamber of Commerce and Industry, Rajan Garg of Vitron Convergys Limited and Pervin Malhotra of CareerGuidanceIndia spoke to NewsInsight.net on the effect of recession on Indian jobs.
Q. Recession has squeezed jobs, hit salary hikes, and produced panic and uncertainty. What should government and working people do?
Shobha Ahuja (SA). Government should take bold steps to get over the slowdown. Though government has announced two stimulus packages, more needs to be done. The US government announced a trillion dollar stimulus package (and China one of an) estimated four trillion yuan.
Rajan Garg (RG). As a result of the slowdown, everybody is in a crisis. (But) it's better to have patience and courage. Employees should to be content and accept the situation as it will definitely take some time to revive the economy.
Pervin Malhotra (PM). About job uncertainty, government can't do much in the private sector, except to suggest not to sack employees as it will worsen the situation. Instead, salary cuts can be (resorted to) for a certain period but based on employee level. At managerial or top positions, a salary cut of even twenty per cent won't affect them, but a salary cut of even five to ten per cent will starve junior employees.
Working people who have been sacked or fear job loss should not take it personally. Instead use the opportunity to improve your skills or gain new ones. Be patient, use your contacts, and don't hesitate to join a part-time job.
Q. When will jobs pick up?
SA. As soon as the economy picks up. It will take another six to eight months.
RG. Not before the end of this year, after about twelve to eighteen months.
PM. It will take some time, may be this year.
Q. Will government's bailout packages help with jobs?
SA. Though the government has reduced CRR and repo rate, small and medium enterprises still face a credit crunch. Bailout packages announced by government should be used in right direction.
RG. Bailout packages will help jobs but in the long term. As in disease, first it is necessary to identify it, then take measures to stabilize health, and improvement will take some time. Same is the case with the economy. It will take a while to revive.
PM. It will be definitely effective, but it's not possible to give bailout packages to all sectors.
Q. How do you see the future of the Indian job market?
SA. Compared to other countries, India is not in a bad situation. The need of the hour is to focus on the export sector, which has been badly affected by the slowdown. When the economy picks up, it will definitely assist the job market.
RG. In the era of technology, the job potential is increasing. In the middle of 2010 and after 2010, buoyant growth is expected. But governance should be strong and politics and economics should not be mixed.
PM. Recession is a cyclical event that can't be prevented. We should learn a lesson from the West. The situation was getting worse for the last one-and-a-half years but they refused to accept it. We shouldn't collapse as they did.
Q. Many industries are shedding staff and trimming expansion plans because of the liquidity crunch. Will it hurt them in the long term because they are also sacking talented staff?
SA. Yes, to some extent. But every company wants to retain its talented staff. If there is a need to sack employees because of the liquidity crunch, it will fire semi-skilled, unskilled and blue-collar employees first.
RG. These are the compulsions. But companies will definitely try to (protect) jobs of talented employees. They may give pink slips to those who are not performing or employees occupied in activity that is not (profitable). As we have to earn our own bread and butter, so sometimes it becomes necessary to take such steps.
PM. It is deleterious but what can be done? When the job market picks up, there may be a flood of jobs and urgent requirements.
Q. Which industries are worst hit and which have comparatively good job prospects in the near future?
SA. Exports, labor-intensive sectors, automobiles, real estate, tourism, aviation, textiles and readymade garments, gems and jewellery and leather products are worst hit while sectors like food, telecom, pharmaceuticals, health and nutrition, certain segments of the BPO-KPO industry, legal consulting, consultancy, among others, have good opportunities in the near future.
RG. Labor-intensive industries such as textiles and garments, gems and jewellery, BPOs, capex-based industries such as automobiles, tourism and aviation are badly hit while manufacturing, agriculture, health and nutrition and food processing industries are expected to grow.
PM. Certain sectors such as automobiles and diamonds, travel and tourism, real estate, aviation, textiles and readymade garments are the worst hit while sectors like food processing, hospitality, investment banking, telecom, pharmaceuticals, health and nutrition and legal consultancy have better prospects.
Q. According to the 2007-08 Economic Survey, unemployment rate rose by one per cent against the last financial year. Will it come down in the coming years?
SA. As the economy starts picking up, unemployment rate will come down. But labour laws also play a crucial role. Under them, a company can't retrench employees without reason. So most companies have either stopped or slowed down their hiring process.
RG. It will continue to increase, may be up to three per cent.
PM. It may come down. It is advisable for job-seekers to understand the market pulse and accordingly polish their skills.
Q. The Federation of Indian Export Organisations (FIEO) says there will be ten million job losses in the export sector while the initial figure of the commerce ministry is one million. Which is accurate and why such disparity? Does it not put a question mark on the manner of collecting employment data?
SA. Yes. In my opinion, the government data is under-estimated. It must approximate to FIEO's estimate.
RG. There is so much disparity, it definitely puts a question mark on the way of collecting employment data. Coverage is not proper. There are so many industries such as brass, handicrafts, engineering, etc, it is very difficult to include all sectors. The other issue is the sampling method. Do they use cluster sampling, random sampling, and so on? In fact, there is a need for a more expert and professional organization (to collect and analyze employment data).
PM. Very hard to tell. I think the FIEO figure is an approximation.
Q. According to a survey conducted by the labour bureau of the ministry of labour and employment, it was found that employment in eight major sectors like textile and garment industry, metals and metal products, information technology and BPO, automobiles, gems and jewellery, transportation, construction and mining industries had come down from 16.2 million in September 2008 to 15.7 million by December 2008. Will this trend continue in 2009?
SA. Yes. Though the government is taking measures to revive the economy, exports demand concentrated attention.
RG. Yes, it will continue as demand is depressed.
PM. It may stabilize because the worst has already happened.
Q. According to an estimate, three lakh fewer jobs will be created by India Inc in 2009. Almost all sectors show hiring lower by thirty per cent, with worst-affected sectors down by over fifty per cent. Are you in agreement with the estimate?
RG. No, in my opinion, it's almost impossible to create such a huge number of jobs, at least in this year.
PM. As of now, it's better to be optimistic. Hope for the best and prepare for the worst. There are certain sectors in which jobs are still available, such as the domestic banking sector, insurance, health and nutrition and legal consultancy.
Anupama Arora is a www.NewsInsight.net reporter.
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