Indian textiles sector wage bill fell by 29%: CMIE

Salaried jobs in India, which were estimated at 86.1 million in fiscal 2019-20, fell to 68.4 million in April this year and their count by July had fallen further to 67.2 million, according to the Centre for Monitoring Indian Economy (CMIE), which recently said that within manufacturing, textiles has seen the biggest hit as its wage bill fell by 29 per cent.

As textiles is a labour-intensive industry, this sharp fall in the wage bill implies a very sharp fall in employment in the industry, CMIE noted. The same also holds true for the leather industry, which recorded a 22.5 per cent fall in its wage bill in the June 2020 quarter.

Salaried jobs are preferred forms of employment for most people. These jobs offer better terms of employment and also better wages. Households with salaried jobs are better placed to build savings and plan a sustained improvement in their standard of living. Such households are also better placed to borrow and service their borrowing because of the steady nature of their earnings, CMIE said.

In India, salaried jobs have stagnated in recent times. In 2017-18 they grew by 1.6 per cent then in 2018-19 they grew by a meagre 0.1 per cent before contracting by 1.8 per cent in 2019-20. As a result, salaried jobs in 2019-20, at 86.1 million were lower than their level of 86.3 million in 2016-17. This is before the lockdown hit salaried jobs.

While informal jobs have returned and even increased after being hit by the lockdown, formal jobs have not. Non-salaried forms of employment have increased from 317.6 million in 2019-20 to 325.6 million in July 2020. This implies a growth of nearly 8 million jobs or an increase of 2.5 per cent in informal employment, CMIE observed.

However, salaried jobs have declined by 18.9 million by the same comparison, or, declined by a whopping 22 per cent during the lockdown.

In terms of percent change between 2019-20 and July 2020, the fall in salaried jobs is almost uniform across rural and urban regions. The fall was 21.8 per cent in rural India and 22.2 per cent in urban India.

But, urban India has more salaried jobs than rural India. Of the 86 million salaried jobs in India in 2019-20, 58 per cent were in urban India and 42 per cent in rural India. As a result, the impact of the fall in salaried jobs is far greater in urban India than in rural India.

Loss of these urban salaried jobs is therefore likely to have a particularly debilitating impact on the economy besides causing immediate hardship to middle class households, CMIE said.

Source:Fibre2Fashion News Desk (DS)