India created 29 lakh less new jobs in FY20: SBI Ecowrap

As per SBI report, India created 60.8 lakh new payroll (first job) in FY20, which was 28.9 lakh less than the net jobs generated in FY19

Earlier in January this year, SBI had projected that India may create 16 lakh fewer jobs in 2020 Earlier in January this year, SBI had projected that India may create 16 lakh fewer jobs in 2020

The economic slowdown coupled with coronavirus pandemic has deeply impacted employment generation in the country. As per an economic research conducted by State Bank of India, India created 29 lakh less new payrolls in financial year 2019-20 compared to FY19 even when COVID-19 pandemic had not created havoc. The situation is going to be even worse in FY21 with India's GDP expected to decline by 6.8 per cent and various forecasts suggesting that a significant number of people will lose their livelihoods this fiscal, the report said.

Earlier in January this year, the SBI had projected that India may create 16 lakh fewer jobs in 2020.

"The actual loss is almost twice our projections," the latest Ecowrap report by SBI Researrch said.

Even in the National Pension System (NPS) category, state and central governments created 7.33 lakh payrolls in FY20, nearly at the same level as FY21, the report said. However, the state governments created 55,700 lower NPS payrolls in FY20, it added.

The EPFO data primarily covers low-paid jobs (Rs 15,000 per month), while the National Pension System (NPS) collects data of government jobs, state government jobs and private jobs.

The SBI Ecowrap report quoted EPFO data which showed that India created 94.7 lakh new payrolls in FY20, lower by 17.8 lakh as compared to FY19. The report, however, claimed that EPFO data does not represent the correct picture as it includes number of exited members who rejoined and re-subscribed.

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Based on estimation of the actual net new payroll (first job) adjusted for rejoined members and formalisation, the actual net new payroll was 60.8 lakh for FY20, the report said. This was 28.9 lakh less than the net new payroll generated in FY19.

As per the report, the second job (or the exited members who rejoined and re-subscribed) increased by 12.7 lakh in FY20 compared to FY19, indicating that more peoples are shuffling their jobs.

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In April 2020, when the country was under complete lockdown to contain the spread of coronavirus, only 9 per cent first jobs were created compared to April 2019. Though April 2020 payroll data is not comparable with April 2019, but data clearly indicates that it was a complete washout.

"The good thing however is that if we look cumulatively during April 24 to June 20, there were 184 crore person days work generated through MGNREGA, compared to 97 crore in April-June 2019. This is primarily due to government's push to provide employment to the migrant workers during this COVID-19 outbreak," the report highlighted.

Also Read: India will create 16 lakh fewer govt jobs in FY20: SBI Ecowrap report

Government has increased Rs 40,000 crore additional allocation for Mahatma Gandhi Employment Guarantee Scheme (MGNREGS) to provide employment boost. This is mainly to address the need for more work, for returning migrant workers in monsoon season as well, which aims to create larger number of durable and livelihood assets including water conservation assets etc.

Globally, according to International Labour Organisation (ILO) massive losses in working hours, equivalent to 305 million full-time jobs, are predicted for the second quarter of 2020, while 38 per cent of the workforce - some 1.25 billion workers - is employed in high-risk sectors (like manufacturing, real estate, accommodation and food service, etc.), the report said.