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The hunt for growth in jobs seems to be never ending
Quite unfortunate, but it is turning out to be a case study for students of economics.
The real estate market in the National Capital Region (NCR), which includes Delhi and its peripheral cities of Gurgaon, Noida and Faridabad, is nothing short of moribund. After nearly a decade of relentless growth, upstarts who rode the realty boom after finally facing the reality.
Cement production grew 0.9 per cent during the quarter, way below the 9.6 per cent during the April-June quarter, during which Prime Minister Narendra Modi assumed office after the biggest electoral victory in 30 years.
With companies still cutting down on headcount and cautious on new hiring, jobs are few and far between. According to realty consultants Knight Frank, during the first half of the year, housing starts, one measure of economic activity for the economy, fell 40 per cent during the first half of the year. A few months earlier, another realty consultant Jones Lang LaSalle had estimated that there were 12 million unsold apartments across the country.
India’s GDP for the first quarter of the current financial year is expected to remain flat against 7.5 per cent for the January-March quarter of the last financial year that ended on March 31, 2015.
Ahead of India’s GDP figures ratings agency Moody’s cut India’s growth estimate to 7 per cent against the governments estimates between 8 and 8.5 per cent.
Rohit Raj Modi, Director at Ashiana Homes, told Reuters that “from a labour point of view, the peak is over”.
With margins being squeezed, and as the big players come in, increased mechanisation at the locations for construction will mean lesser number of workers will be employed. Delhi-based realty companies like Supertech and Amrapali have set up plants that will mechanise the process of constructing apartments.
Prime Minister Modi may have given his party a political edge by promising more jobs during his election campaign. At the moment, economics seems to be driving the market more than politics.