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Hiring by Centre, state governments fell to 3-year low in FY21

The sharp drop in hiring activities by governments reflects the impact of the pandemic on the economy.

While hiring by Centre fell 27 per cent in FY21, that by state governments declined 21 per cent. While hiring by Centre fell 27 per cent in FY21, that by state governments declined 21 per cent.

Amidst the hit taken by the economy because of the COVID-19 pandemic, the hiring by the Centre and state governments fell to a three-year low level in financial year 2020-21.

While hiring by Centre fell 27 per cent in FY21, that by state governments declined 21 per cent, Mint reported citing payroll data of the National Pension System (NPS).

NPS was initially notified for central government employees with effect from January 1, 2004, and subsequently adopted by almost all state governments for its employees. The scheme was extended to all Indian citizens on a voluntary basis and to corporates for its employees.

The Centre hired 87,243 persons in FY21 as against 1,19,000 in FY20. Similarly, state governments hired 3,89,052 persons in FY21, almost 1,07,000 less than the hiring in FY20, the publication said.

Also read: India's GDP to contract by less-than-expected 7.3% in FY21: SBI

The sharp drop in hiring activities by governments reflects the impact of the pandemic on the economy. Hit by the pandemic and the nationwide lockdown imposed to curb the spread of infections last year, India's economy contracted during the first half of FY21, before returning to positive territory in October-December quarter with a growth of 0.4 per cent.

GDP data for January-March quarter and FY21 is likely to be released on May 31. While most of the analysts expected Indian economy to grow in double-digits in FY22, the second wave of pandemic and the subsequent lockdowns across states in April-June quarter have led to lower revision of GDP growth for June quarter as well as for FY22.

As per private think-tank Centre for Monitoring Indian Economy (CMIE), India's unemployment rate rose to 14.45 per cent in the week ending May 16 from 8.67 per cent in week ending May 9.

As per CMIE, the latest lockdowns could have denied people from seeking employment and caused a fall in labour participation. It said the economy was not in a position to provide jobs to a large number of people.

Also read: Unemployment rate rises to 14.5% in week ending May 16: CMIE