Employment in India poses a great challenge in terms of its structure, with it being dominated by informal, unorganised and seasonal workers, volume two of Economic Survey for 2016-17 said. It also highlighted the deceleration in hiring being faced by the IT-BPM (business process management) sector. The Survey said that misconstruing mobility of skilled people as an immigration issue is a “deterrent to the growth of this global business” resulting in many barriers to free movement of skill and data.
The Survey, which was tabled in Parliament on Friday, said that there is a gentle deceleration in net hiring growth rate as has been indicated by Nasscom. As per Nasscom, this largest private sector employer has added over 6 lakh new employees in the last 3 years and is expected to add over 2.5 to 3 million new jobs by 2025. “The IT-BPM industry is also feeling the pinch of the global slowdown and global political uncertainties as clients go slow on their decision-making and investment processes,” it said.
It also cited a report by executive search firm Head Hunters India, saying that the job cuts in IT sector will be between 1.75 lakh and 2 lakh annually for next three years due to under-preparedness in adapting to newer technologies. It also cited the McKinsey & Company report, saying that nearly half of the workforce in the IT services firms will be “irrelevant” over the next 3-4 years and the bigger challenge ahead for the industry will be to retrain 50-60 per cent of the workforce with a significant shift in technologies. “However, the skills profile is set to undergo a rapid change as demand for skills around digital technologies grows exponentially. Many firms have established dedicated programmes to re-skill existing employees. In 2016-17 around 1.7 lakh jobs were created and in Q4 of 2016-17 alone, there was gross hiring of over 50,000 by top 5 firms. However, Labour Bureau of India data indicate that changes in employment in IT-BPO sector during April to December 2016 was only 0.22 lakh,” it said.
The Survey also noted that the growth in digital tech like cloud-based services is happening at a much faster pace and the companies have to learn new technologies and reskill. Quoting a 2016 report of the World Bank, the Survey said that automation threatens 69 per cent of the jobs in India, while it threatens 77 per cent in China. While the labour markets are impacted by rigid labour laws and the emergence of contract labour. public employment generation programmes have continued to be a major tool for creating additional jobs and promoting inclusiveness, the Survey said.
The Survey enlisted the initiatives taken by the government, both legislative as well as technological, including the higher budgetary allocation for anti-poverty programmes and employment generation schemes. On the government schemes for skilling, the Survey said that the current measures of outcome in skill training are only uni-dimensional and need to made multi-dimensional.
“The present measure of outcomes in skill training includes only number of persons trained, which is uni-dimensional. The outcome measures for skill training should take into account parameters to make it multi-dimensional, by including person days, person hours, weighting for level of training, weighting for the duration of training and another appropriate weighting,” it said.
It added that skilled labour force is essential to meet diversified demands of a growing economy, to tap the benefit of demographic dividend. Quoting the India Skill Report 2016, the present demographic advantage of India is predicted to last only till 2040. A sector wise study, commissioned by National Skill Development Corporation, has estimated the incremental human resource requirement of 103.4 million across 24 high priority sectors by 2022, it added.