India will create 16 lakh fewer government jobs in 2020: SBI Ecowrap report

India created 89.7 lakh new jobs in the financial year 2019, according to the EPFO data. However, this year, the numbers could be around 15.8 lakh lower, says an SBI Ecowrap report.

A sharp decline in the Gross Domestic Product (GDP) in the financial year 2020 will shrink job creation in India, leading to a minimum of 16 lakh fewer government and low-paying jobs in the financial year. This slow pace of growth will have a direct impact on payroll creation as labour remittances are declining, says an SBI Ecowrap report. According to the EPFO data, India created a total of 89.7 lakh new payrolls in the financial year 2019 but this year's numbers could be around 15.8 lakh lower, says the report. "Even in the category of NPS (National Pension System), state and the central government could create close to 39,000 less jobs in 2020. This can result in 16 lakh fewer payrolls in the year 2020 than in 2019," says the report.

The Indian economy is expected to expand at 5 per cent this year, as compared to 6.8 per cent last year. A decline in remittances by labourers in India in the last one year has alos been noticed. "These migrants have been making significant financial contributions to their families who stay in their places of origin. The remittance data shows a decline in remittances in states like Assam, Bihar, Rajasthan, Odisha and Uttar Pradesh," said Soumya Kanti Ghosh, chief economic adviser, SBI in the report.

The report says the stagnant productivity growth remained at 9.4-9.9 per cent in the last five years, which has resulted in low wage growth. "In the absence of wage gains and commensurate productivity, we must strive to improve the quality of jobs offered," the report added.

According to the 2011 Census, migrant labourers constituted 37.5 per cent of the total population of India. Migrants make significant contributions to the national economy by providing human capital in sectors such as textiles, construction, hospitality, brick-making, mining, and small industries. "To look at such a trend, we looked at a sample of data on remittances by migrant labourers to selected states in the last one year. The data shows a decline in remittances," says the report.

Unemployment has become a big concern for the government. India's unemployment rate increased to 7.7 per cent in December 2019, which is slightly higher than 7.48 per cent reported in the previous month. Haryana, Tripura, and Himachal Pradesh witnessed highest unemployment levels of more than 20 per cent, while Assam and Karnataka reported the lowest unemployment rate of 0.9 per cent each.

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