Pick up in Investments; Good hiring and wage growth: CII Survey
Even though geopolitical fault lines have disrupted global supply chains and have posed serious challenges to global growth, India has emerged as a bright spot amid this challenging global backdrop. The sound economic policies initiated by the Government helped revive the economy with emphasis on public capex led growth.
CII initiated an Industry survey to assess the pickup in private sector investments, employment in private sector and growth in wages in private sector. The pan-India survey is an ongoing initiative, which would be completed for 500 firms by first week of February. That said, the interim results based on a sample of 300 firms spread across all industry sizes (Large, Medium and Small) throw some positive results, which underscores the fundamental optimism about the Indian economy.
The 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 FY’26, an uptick in private investments might be on the cards over the next few quarters”, said Mr Chandrajit Banerjee, Director General, CII.
Along with economic growth, employment generation has also been at the centre stage in recent policy discussions. India’s vision of a “Viksit Bharat” by 2047 is hinged upon performing well on the imperative of “creation of good quality jobs”. Encouragingly, the early results from the survey show that about 97% of the sample firms are likely to increase employment in both 2024-25 and 2025-26. In fact, 79% of the respondents’ firms said that they added more people over the past three years.
Responding to the question on extent of employment generation expected in FY’25 and FY’26, about 97% of the firms indicated that employment is expected to increase with 42% to 46% of the firms indicating 10 to 20 per cent increase in employment over and above the existing workforce and about 31% to 36% of them have indicated expected increase in employment of upto 10 per cent.
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. 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.
Majority of the firms surveyed indicated that it takes anywhere between 1 to 6 months to fill in vacancies of Senior management, Management/ Supervisory level, while regular and contractual workers take less time to fill in a vacant position indicating the need to fill the availability of skilled staff at the higher level in sample firms.
“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 Mr. Banerjee.
On wages growth, which has impact on personal consumption, a major proportion (~40% to 45%) of sample firms surveyed saw an increase in average wage growth for senior management, managerial/ supervisory roles and for regular workers in the range of 10% to 20% in FY’ 25. The trend was similar in FY’ 24.
“These are promising results, exhibiting confidence about some of the important aspects of the economy. That said, results of the survey, when read along with various other emerging economic indicators, will help in a comprehensive understanding of the economy”, underlined the Director General of CII.
18 January 2025
New Delhi