India’s corporate sector has posted remarkable financial gains, yet employee recruitment and salary growth have lagged significantly, according to the Economic Survey for 2023-24. Highlighting that job creation predominantly occurs in the private sector, the government stated, “In terms of financial performance, the corporate sector has never had it so good.
Results from a sample of over 33,000 companies show that, between FY20 and FY23, profits before taxes nearly quadrupled. However, hiring and compensation growth have barely kept pace.
The survey emphasized that many factors affecting economic growth, job creation, and productivity fall under the jurisdiction of state governments. It called for a collaborative effort between the Centre, states, and the private sector to meet the rising aspirations of Indians and achieve the goal of Viksit Bharat by 2047.
It also revealed that economic shocks, rather than structural issues, have impacted the employment landscape. Comparing the Annual Survey of Unincorporated Enterprises for 2022-23 with the NSS 73rd round of the ‘Key Indicators of Unincorporated Non-Agricultural Enterprises (Excluding Construction) in India,’ the survey found that overall employment in these enterprises declined from 11.1 crore in 2015-16 to 10.96 crores.
Although manufacturing lost 54 lakh workers, gains in trade and services limited the overall reduction to about 16.45 lakh workers between these periods. Notably, a significant increase in manufacturing jobs occurred between 2021-22 and 2022-23.
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India faced “two big economic shocks in quick succession,” the survey noted. The first was bad debts in the banking system and high corporate indebtedness, which took the government’s first term and beyond to manage. The second shock was the Covid pandemic, which quickly followed. Despite these challenges, the survey suggests the Indian economy’s ability to create employment is not fundamentally impaired, though significant work remains ahead.
The Economic Survey also underscored the geopolitical challenges that could hinder India’s ambition to become a developed nation. These include the rise of Artificial Intelligence and its uncertain impact on workers across all skill levels.
The survey highlighted that the global environment for India’s growth is vastly different from the period of China’s rise, with more pervasive concerns about climate change and a less stable geopolitical landscape. Overcoming these hurdles will require a strong alliance between union and state governments and the private sector.
