New job creation in India dropped by over 40 per cent in 2008-09, with 469 firms -- of the companies studied -- having recruited only 135,987 employees during the year under review, compared to 228,968 in the 2007-08.

The banking sector -- State Bank of India, in particular -- has come to the rescue, while software service companies are employing less numbers compared to the previous year.

The latter sector was a major job creator in the past five years and is now facing a slowdown in business from BFSI (banking, financial services and insurance) sectors on account of the financial crisis abroad.

Over 36 software services companies were studied and it was found that hiring increased by only 69,430 in 2008-09, as compared to 103,118 in 2007-08.

The crash in stock prices after the liquidation of Lehman Brothers in September 2008 had hurt new employment in securities and commodities trading service firms, while the liquidity crunch saw construction companies pruning staff strength due to the slowing in demand for housing and commercial offices.

Sectors such as automobiles, steel, textiles, hotels and media also pruned hiring due to the slowdown.

Job and factory data in the US for the week ended September 30 suggest that recovery in the manufacturing sector still eludes. In India, the financial and services sectors have started hiring, but there is no news on mass hiring from the manufacturing sector.

Infosys Technologies, TCS and Tech Mahindra had reduced employee strength in the first quarter of the current financial year, while Wipro and HCL Technologies together increased this by only 1,000 in the first quarter.

There has been no goods news from the realty sector, which had pruned jobs in 2008-09. Omaxe, DLF, Sobha Developers and Unitech together ended 4,446 jobs in 2008-09 after recruiting 2,263 people in 2007-08.

Rajeev Talwar, group executive director, DLF, says, 'there's no way we can hire people in big numbers now like the way we did in 2006-07. We are currently redeploying people and increasing efficiencies of our staff. Till the economy improves drastically, we cannot hire people in big numbers.'

The stocks and commodities' broking houses, however, see the current turnaround in the equity markets as conducive enough to create new jobs.

During the financial crisis which began after October 2008, most of these had given pink slips to many employees in the sales and research division.

In the current year, broking houses are once again recruiting people. Motilal Oswal, Angel Broking and India Infoline have recruited sales and research staff in the past six months.

Rajiv Phadke, executive director HR and corporate communication of Angel Broking said they had added 2,000 people in the sales and research division in the past six months, due to diversification into other financial services such as distribution of mutual funds, home loans, insurance products and commodity broking. Angel Broking had 70 offices in 2008, which has now gone up to 175.

Motilal Oswal, chairman, Motilal Oswal Securities, told Business Standard they are hiring and quarter on quarter employee numbers are substantially higher.

The retail segment, hit hard on account of tight liquidity and job loss in services, has also started hiring.

"We are adding people for our hypermarkets and stopped hiring in the back-end operations," Aditya Birla Retail chief executive officer Thomas Varghese said.

The company has hired over 630 people for the three hypermarkets it opened in the past year. Gammon Infrastructure has been continuously hiring people for its operations.

"We have not slowed our hiring plans. We have been continuously hiring people to deploy in our various projects,'' said Parvez Umrigar, managing director, Gammon Infrastructure Projects.