New Delhi: Job creation in India is going to take a hit in the last quarter of the current financial year due to the sub-prime fiasco in the US and the strengthening of the rupee as the IT sector is going cut down on their intakes.
According to a report by temp staffing company TeamLease, the net employment outlook index, which stands at 78 per cent — down six per cent over the last quarter — and net business outlook of 81 per cent for the quarter beginning October are the lowest among all the four quarters in the current calendar year.
However, Delhi and Bangalore have shown an increase in net employment outlook by 6 per cent and 3 per cent respectively, whereas figures remains constant across Pune and Hyderabad. A marginal decline in the employment outlook is expected also in Mumbai, Kolkata, Chennai and Ahmedabad.
"The margins in the IT sector already under pressure over last few quarters, coupled with unprecedented appreciation of the rupee and the cost of HR capital in the IT sector being the highest at about 40 per cent, has adversely impacted hiring," TeamLease Services Pvt Ltd, Vice-President, Sampath Shetty said.
While employment outlook will remain positive in the ITeS, telecom and manufacturing sectors, a marginal decline would be noted in the hirings for IT, retail, financial services, media, FMCG and infrastructure sectors, the survey said.
"The US sub prime fiasco has cautioned the banking, financial services and insurance (BFSI) sector market approach in terms of market penetration and future hiring," Shetty points out.
Insurance sector would show positive hiring trends over next two quarters whereas the hirings in manufacturing sector would continue to be stable, the survey said. A slowdown would be noticed in the infrastructure sector due to the investment slowdown over last one quarter; which may be constraining the Indian economy from macro perspective, the TeamLease's survey added.
(With PTI inputs)
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