Rural services help partially offset job market losses in August

The addition of services jobs in rural India indicates an uptick in economic activity and movement of workers from farm to non-farm jobs.

Key employment generators manufacturing, mining, food processing, and construction shed millions of jobs in August in both urban and rural pockets. Only the service sector in rural India offset the carnage by adding eight million jobs.

Experts and economists argued that sectoral and sub-sectoral employment numbers show that job creation is happening in the periphery

The addition of services jobs in rural India indicates an uptick in economic activity and movement of workers from farm to non-farm jobs. This is mostly driven by retail trade and non-professional services, according to fresh monthly data from the Centre for Monitoring Indian Economy (CMIE).

While at the national level, the manufacturing sector shed some 940,000 employees, in mining, the number of people employed in August went down by 1.02 million when compared with July. Like several other segments, real estate and construction, too, cut the headcount by 599,000. Agriculture shed some 7.5 million jobs in August.

However, services in rural India added 8.4 million jobs to salvage the situation, followed by employers in utilities, where the number of people employed went up by a marginal 80,000.

A sliced view of the rural service sector shows that of the 8.4 million job additions, at least 5.5 million were in retail trade; followed by 3.5 million additions in personal, non-professional services or support services; 438,000 in wholesale trade; and a marginal uptick of around 100,000 in software services and back-office outsourcing jobs.

But again in rural service sectors, jobs were lost in financial employment (over 300,000), communication and logistics (over 200,000), healthcare (over 300,000), education and hotel industries.

Experts and economists argued that sectoral and sub-sectoral employment numbers show that job creation is happening in the periphery, with core sectors failing to deliver. Such jobs, they warned, will not spur private consumption.