Fears of the global economic slowdown hitting employment have deepened as government has reported a deceleration in labour intensive segments in recent data.
There has been deceleration in exports of labour intensive products, particularly textiles, leather, marine products, carpets, sports goods and handicrafts during 2007-08 as compared to the previous year.
The situation is unlikely to get better in the current year with other segments too tottering. RBI data, up to March 2007, indicate there are more than 1.14 lakh sick micro and small enterprises. And from 2006 up to August 2008, nearly 280 units have closed down rendering at least 12,000 people jobless.
The growth in domestic industry is reported to be poor with a negative central excise collection of minus 3.8% recorded for the quarter ending September. The lower excise collection came soon after results of the Index of Industrial Production (IIP) pointed a 10-year low in growth of industrial output based on the results for August.
The industrial growth, measured in terms of IIP, came down from 11.6% in 2006-07 to 8.3% in 2007-08 which led to a slower growth in the capital goods sector that makes equipment consumed by other sectors.
Both the intermediate and consumer goods sector witnessed massive downfall. While the intermediate goods came down to 8.9% in 2007-08 from 12% the previous year, consumer goods fell a steep 6.1% from 10.1%.
Another major employment generating sector, the information technology and BPO industry, has reported slower growth with many banking and financial companies in US and European countries going bust or reporting massive financial crunch.