A Mixed Picture
The Indian job market presents a complex picture, with both positive and concerning trends emerging. While the overall unemployment rate remains stable, driven by a rising female workforce, there are growing concerns about the impact of Artificial Intelligence (AI) on jobs.
The Finance Ministry's latest report acknowledges anecdotal reports of AI displacing workers, echoing the warnings raised in the Economic Survey earlier this year. The survey highlighted the potential threat of AI to workers across all skill levels, posing a significant challenge to India's sustained economic growth.
Despite these concerns, there are positive signs in the job market. The Naukri JobSpeak index indicates a 6% year-on-year expansion in September 2024, driven by the resurgent IT sector. Additionally, sectors like FMCG and Oil & Gas are experiencing growth and creating new AI/ML roles.
The report also reveals a preference for experienced professionals over fresh graduates. Hiring trends favor those with experience, while job opportunities for individuals with 0-3 years of experience have declined by 7% compared to September 2023.
The outlook for the October-December quarter appears promising, with the Employees' Provident Fund Organisation (EPFO) adding 9.3 lakh new members in August 2024. Notably, a significant portion of these new members belong to the 18-25 age group, indicating a rise in youth joining the organized workforce.
The purchasing managers' employment sub-index also remains strong, indicating expansion for the seventh consecutive month in September. However, employment in the manufacturing sector softened due to a reduction in part-time and temporary workers.
Overall, the September review paints a cautiously optimistic picture for the Indian economy. The stable external sector, positive agricultural outlook, and expected festive season boost in demand are encouraging signs. Additionally, the likelihood of increased government spending is expected to further stimulate investment activity. The review maintains its projection of the Indian economy growing between 6.5 and 7.0 percent in the current fiscal year.
However, the potential impact of AI on jobs remains a significant concern that requires close monitoring and proactive measures to mitigate its negative consequences.