Job growth to slow down in non-IT sectors, NRIs coming back

Telecom, financial services, construction and auto sectors are going slow with their hiring plans, primarily due to spiralling costs, interest rates and inflationary pressures. Also, an increasing number of NRI professionals are moving back to India in search of greener pastures, faced with declining salaries and job cuts abroad

New Delhi: Growing economic uncertainty may slow down hiring activities in a host of sectors, but the IT space is likely to remain unaffected and non resident Indians (NRIs) returning home due to the gloom in Western markets might emerge as an attractive talent pool, reports PTI.

Companies in the telecom, financial services, construction and auto sectors are going slow with their hiring plans, primarily due to spiralling costs, interest rates and inflationary pressures, experts said.

At the same time, the hiring outlook for the IT industry is steady and human resource providers say that feedback indicates the companies are already geared up for the challenges arising out of economic uncertainties, especially in the Western world, which serve as key customers of Indian technology firms.

Some experts also believe that an increasing number of NRI professionals were moving back to India in search of greener pastures, faced with declining salaries and job cuts abroad.

This could give Indian companies a chance to target this attractive resource pool, they said.

According to a study by MyHiringClub.com, a recruitment tendering platform, hiring of non-resident Indians (NRIs) will account for 19% of total recruitment activity during October-December this year, compared to 11% in the year-ago period, representing a growth of 8%.

Hiring of NRIs accounted for 21% of total recruitment activity during April-June 2011.

“The high economic growth in India, with many good opportunities, has fuelled the NRI thought process to head back. In addition to that, many Indian companies are shutting their offices in the West,” MyHiringClub.com CEO Rajesh Kumar said.

Looking ahead, he said, “An increasing number of high-value NRI professional recruitment is likely to take place in the coming quarter, as wage gaps have declined sharply. An increasing number of people is now returning because now the advantages of returning back to India outweigh the disadvantages by far.”

A survey by HeadHonchos.com, a job search portal for senior management professionals, also said that as many as 62.9% of the respondents do not expect the global economic scenario to impact the hiring plans of Indian IT firms.

Nearly 92% of the respondents believe that the impact will be limited to the next six months and only 8.1% expect any long-term fall-out, the survey said.

However, the picture is not that rosy for a host of non-IT sectors.

Leading job portal Naukri.com said the employment market was seeing a slowdown, with sluggish hiring activity in the telecom, insurance and realty sectors amid economic uncertainty and rising inflationary pressures.

“Hiring has definitely slowed down in telecom, insurance, construction and financial services,” Naukri.com managing director and CEO Hitesh Oberoi said.

“Rising inflation and consequently higher interest rates have resulted in slower growth in sectors like real estate and automobiles. This will impact job creation in these sectors,” Mr Oberoi noted.

Headline inflation, which has been ruling above the 9% mark since December 2010, touched a 13-month high of 9.78% in August.

The central bank has hiked key policy rates as many as 12 times since March last year to tame inflation. With rising rates, corporates have also expressed concerns about expensive credit hurting their expansion plans.

Grappling with global economic uncertainties, especially the escalating European debt turmoil, many companies worldwide are cautious about their business prospects, resulting in slower hiring activities.

“If the European debt crisis worsens in the coming months, this could have an adverse impact on overall job market, especially for exporters,” Mr Oberoi said.

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12th Plan document will not be ready by 1 April 2012

Traditionally, the Plan panel has been unveiling the policy documents after the lapse by several months and this time it would be no exception. The documents for 10th and 11th Plans were finalised much after the beginning of the respective Plan periods

New Delhi: The 12th Plan document that seeks to raise the economic growth rate to 9% during the five-year period will not be ready by 1 April 2012, the day the next Plan begins, reports PTI.

As per the schedule, the Planning Commission will begin writing the 12th Plan document that runs into several volumes after March 2012.

Traditionally, the Plan panel has been unveiling the policy documents after the lapse by several months and this time it would be no exception, sources said.

“The Commission is scheduled to complete spade work relating to formulation of the Plan document by March 2012.

This includes submission of reports of steering committees and working groups and eliciting views of different ministries and departments,” the official said.

After the finalisation of the document, it will be placed before the full Planning Commission, the Union Cabinet and the National Development Council (NDC), the highest policy making body of the country. This exercise is likely to take time.

The documents for 10th and 11th Plans too were finalised much after the beginning of the respective Plan periods.

The 11th Plan which began in April 2007 was approved by the NDC in December 2007. Similarly, the 10th Plan which begun in April 2002, was cleared for implementation by the NDC in December 2002.

As far as progress of the 12th Plan documentation is concerned, the NDC had approved the ‘Approach Paper’, which provides a broad framework of the government policy to be pursued in the five-year period to achieve the desired growth rate, 20th on August last.

The Approach Paper would be the basis for running the various government programmes and schemes till the new Plan is unveiled and implemented, the official said.

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Inflation to moderate only in early 2012: BNP Paribas

“It is not until early 2012 when favourable base effect kicks in that spot inflation should genuinely fall back, but remain well above the RBI’s comfort zone,” BNP Paribas said in its latest issue of ‘Asian Instant Insight’

New Delhi: Global banking major BNP Paribas has said inflationary pressure in India will moderate early next year, but will stay above the Reserve Bank of India’s (RBI) comfort level of around 5%-6%, reports PTI.

“It is not until early 2012 when favourable base effect kicks in that spot inflation should genuinely fall back, but remain well above the RBI’s comfort zone,” BNP Paribas said in its latest issue of ‘Asian Instant Insight’.

The banking major’s projection is at variance with the forecasts made by the government and the RBI.

Both the government and the central bank expect inflation to start cooling by the third quarter of this fiscal (October-December).

While RBI has said that overall inflation will moderate to around 7% by March, the government expects it to be around 6.5% by then.

Inflation soared to 13-month high of 9.78% in August. It has been above 9% since December 2010.

“Despite signs of a cooling economy, elevated inflation expectations and upward pressure on administered electricity prices are...likely to retard the desired disinflation process,” BNP Paribas said.

It added, “Despite building downside risks to growth, it is not until early 2012 when base effect from onion and cotton prices kicks in that WPI inflation should realistically fall back towards more comfortable levels but remain well above the RBI’s comfort zone of 5%-5.5%.”

The RBI has hiked key-policy rates 12 times since March 2010 to drain out excess demand, which many consider could be stoking the inflation.

Corporate India has said that frequent rate hikes, which have led to an increase in the cost of borrowings, are hindering fresh investments and affecting economic growth.

The country’s economic growth was 7.7% in the April-June period, the slowest in six quarters. Growth in industrial production also fell to 21-month low of 3.3% in July.

In the mid-quarterly policy review earlier this month, the RBI said that the Rs3.14 per litre hike in petrol price, announced recently, will further fuel inflation.

It said the current level of high inflation makes it imperative to continue with the anti-inflationary stance and tight monetary policy.

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