New Delhi:

The corporate sector in India has been posting impressive financial performances, but recruitments and salary growth of employees have not kept up with the companies’ profit, the government has said in the Economic Survey for 2023-24.

Stressing that job creation happens mainly in the private sector, the government said, “In terms of financial performance, the corporate sector has never had it so good. Results of a sample of over 33,000 companies show that, in the three years between FY20 and FY23, the profit before taxes of the Indian corporate sector nearly quadrupled… Hiring and compensation growth hardly kept up with it. But, it is in the interest of the companies to step up hiring and worker compensation.”

The Economic Survey also underlined that many issues that influence economic growth, job creation and productivity lie in the domain of state governments. It called for a tripartite compact between the Centre, the states and the private sector “to deliver on the higher and rising aspirations of Indians and complete the journey to Viksit Bharat by 2047”.

The survey also found that economic shocks due to bad debts and the Covid pandemic, and not structural problems, influenced the country’s employment landscape.

“The Annual Survey of Unincorporated Enterprises for 2022-23, when compared with the results of the NSS 73rd round of the ‘Key Indicators of Unincorporated Non-Agricultural Enterprises (Excluding Construction) in India’ shows that overall employment in these enterprises fell from 11.1 crore in 2015-16 to 10.96 crores. There was a reduction of 54 lakh workers in manufacturing but the expansion of the workforce in trade and services gained in jobs limited the overall reduction in the number of workers in unincorporated enterprises to around 16.45 lakhs between these two periods. This comparison masks a big jump in manufacturing jobs that seems to have occurred between 2021-22 (April 2021 to March 2022) and 2022-23 (October 2022 to September 2023),” the survey has said.

India, it said, suffered “two big economic shocks in quick succession”. “Bad debts in the banking system and high corporate indebtedness were one. It took the first term of the present government and more to bring it under control. The Covid pandemic was the second shock and quickly followed the first one. So, it is difficult to conclude that the Indian economy’s ability to create employment is structurally impaired. Nonetheless, going forward, the task is cut out,” it added.

The Economic Survey also underlined the geopolitical challenges India faces in its push to become a developed country. These include the advent of Artificial Intelligence.

“Between the last Economic survey published in January 2023 and this one, big changes are afoot in the geopolitical environment. The global backdrop for India’s march towards Viksit Bharat in 2047 could not be more different from what it was during the rise of China between 1980 and 2015. Then, globalisation was at the cusp of its long expansion. Geopolitics was largely calm with the end of the Cold War, and Western powers welcomed and even encouraged the rise of China and its integration into the world economy.

“Concerns over climate change and global warming were not so pervasive or grave then as they are now. Fourth, the advent of Artificial Intelligence casts a huge pall of uncertainty as to its impact on workers across all skill levels – low, semi and high. These will create barriers and hurdles to sustained high growth rates for India in the coming years and decades. Overcoming these requires a grand alliance of union and state governments and the private sector,” the survey has said.

Introducing the Economic Survey in Parliament, Finance Minister Nirmala Sitharaman said the Indian economy was on a “strong wicket and stable footing” and resilient in the face of geopolitical challenges.

“The Indian economy is on a strong wicket and stable footing (and) demonstrating resilience in the face of geopolitical challenges. The economy has consolidated post-Covid recovery with policymakers – fiscal and monetary – ensuring economic and financial stability…” the report said.