Our Terms & Conditions | Our Privacy Policy
New Delhi: Investments by the private sector as well as employment opportunities are expected to rise in FY26, according to a survey of over 300 businesses including large, medium, and small firms.
The Confederation of Indian Industry (CII) survey, which was conducted over the past 30 days, suggests that 75% of the respondents believe that the current economic environment is conducive for private investments.
“Given that 70% of the firms surveyed said that they would invest in FY26, an uptick in private investments might be on the cards over the next few quarters,” said Chandrajit Banerjee, director general, CII.
The survey also indicated better days ahead for job creation, with over 95% of the companies looking to employ more people in FY25 and FY26. Additionally, about a third of these firms are likely to expand their payroll by roughly 10%.
CII’s sample size was 309 small, medium, and large firms, of which 68% were manufacturing and mining firms, 28% were services, and 4% were agro and food processing companies.
Also, about half of the surveyed firms were small companies with a turnover in the range of ₹5-75 crore. Nearly a third had a turnover of ₹75-250 crore, and the rest, over ₹250 crore.
About 90% of the surveyed firms have invested some amount over the last 18 months, CII said, adding that 45% of these would increase investments by up to 10% in the second half of FY25, and 39% would hike investments in the range of 11-20%.
Nearly four in every five firms surveyed by CII said there had been an increase in hiring activity in the last three years, and 5% said there had been a decrease, while the rest said there had been no change.
The average increase in direct employment due to planned investments in next one year is expected to be in the range of 15% to 22% between manufacturing and services sectors respectively, CII said. Similar expectations were seen in the interim results on indirect employment with manufacturing and services firms expecting about 14% increase in indirect employment respectively over and above the existing levels of employment, the industry body said.
“With the two critical drivers of growth—private investments and employment—looking positive, we feel confident that the overall growth is likely to remain around a stable 6.4-6.7% this year and is likely to be 7.0% in FY26”, said Banerjee.
Wage growth trends
On wages, about 40-45% of the firms surveyed showed growth for senior management, managerial or supervisory roles, contractual workers as well as regular workers in FY25, similar to the growth seen in FY24.
Wages are critical for the world’s most populous democracy with a large working age population as household spending depends on it.
Earlier in December 2024, chief economic adviser V. Anantha Nageswaran highlighted the link between wages and household spending, the largest growth driver, saying that corporate profitability and workers’ income growth have to be balanced.
“Not paying workers enough would be self-destructive for the corporate sector,” he had said at an Assocham event last month.
India’s key employment indicator, the worker-population ratio for all ages has increased from 38.2% in 2019-20 to 43.7% in 2023-24, according to the annual Periodic Labour Force Survey (PLFS) conducted by the ministry of statistics and programme implementation. The survey is conducted for the July-June period annually, and the 2023-24 report was published in September 2024.
Moreover, the worker-population ratio for individuals aged 15-29, indicating the number of employed people in the total population of the youth, has increased from 31.4% in 2017-18 to 41.7% in 2023-24, as per PLFS data.
Job creation has been a subject of political debate in recent times, especially in the country’s general elections in 2024, with Opposition parties highlighting issues related to unemployment and wage growth.
A report by the Reserve Bank of India (RBI) published in July 2024 showed the employment growth rate in the country rising by about 6% in FY24, nearly double the growth recorded in the previous fiscal. As per the RBI’s India KLEMS database for FY24 published on 8 July 2024, the number of jobs increased by 46.7 to 643 million from 596 million in FY23.
KLEMS stands for Capital (K), Labour (L), Energy (E), Material (M) and Services (S), covering 27 industries in the Indian economy. The RBI’s KLEMS data came immediately after Citigroup pointed at employment challenges in the economy.
Citigroup’s report had said even though the economy was growing rapidly, India would still struggle to create enough jobs.
This received a scathing response from the union labour ministry, which said the Citigroup report had failed to consider the positive indicators seen in the PLFS as well as the RBI’s KLEMS database, adding that data from private sources can have varying shortcomings, including using definitions of employment not aligned with national or international standards. The labour ministry’s reply also raised questions on the methodology and sample space used by private data sources.
Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
Business NewsIndustryPrivate investment and job creation likely to rise in FY26, says industry bodyMoreLess
Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.
Aggregated From –
Comments are closed.