How demonetization affected IT contract workers
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The government's note-ban plans had a significant impact on the contractual job creation. Even as the regular jobs continued to grow, there was no growth in the contractual opportunities.


The demonetization had a high impact on the daily wagers and contract workers. The report published by Labor Bureau covers eight major sectors - manufacturing, trade, construction, accommodation, restaurants, transport, education, healthcare, and information technology (IT). These sectors contribute to 81% of all employment provided by organizations in the country.


The report states that the regular jobs increased by 197,000 in January to March quarter of 2017. The same was reported 139,000 in the same quarter of 2016. However, the number of contractual jobs were only 26,000 in January to March quarter, against 124,000 in the same quarter of 2016. The number of jobs for daily wage workers was declined by 53,000 in the fourth quarter fo this year.


In the human capital-intensive industrial sectors like manufacturing, trade, construction, transport, and restaurants, the daily wage workers are mostly paid in cash. According to the experts, the decline in the jobs was observed because of government's decision to ban currency notes of Rs 500 and Rs 1000 on November 8, 2016.


Pranob Sen, the country director of IGC's India Central Programme and former chief statistician to the Indian government said, "In the organised sector, there was an uptick in employment of full-time workers who were paid by cheques or through bank accounts but the number of contracts and casual workers, paid by cash, declined during this phase."


In the organized job sectors like manufacturing, trade and IT, the contractual opportunities were created at a slow pace. The creation of contractual opportunities was slowed in all sectors except the healthcare. The IT and education sector mostly creates contractual opportunities for the top talent. 


Since the organized sectors don't use the physical currency to pay the workers, the slow growth was mostly due to the business impact of demonetization. Many industries reported a low business in the first quarter of 2017, which led to the decline in the creation of new contractual opportunities.


- Rajat Kabade