According to JM Financial’s Thematic Report, 2017 – The number of students who enrol in higher education through the regular mode has steadily risen from 25.8mn in FY12 to 30.8mn in FY16. Similarly, the number of students passing out with degrees has grown at 4.7% from 7.4mn in FY12 to 8.8mn in FY16, out of which under-graduates constitute 6.3mn. The government’s impetus, coupled with increasing demand, has led to an exponential rise in the number of educational institutes and the people passing out at every level of qualification. This has directly translated into higher labour participation in each sub-segment, since the willingness to be engaged in some economic activity has also gone up.
Demand for talent is increasing across many sectors
The report further states- India’s status of being home to a young population is well-established. The United Nations Organization reckons India will remain below the global median age for a good part of the next three decades and considerably lower than that of other major economies. The vibrant and young population is widely expected to be the cornerstone of India’s growth story.
Thanks to the growth of India’s key industries such as IT, retail and banking, as well as the country’s continued focus on innovation, the Indian economy is growing at an attractive rate. As a result, the demand for talent is increasing across many sectors to deliver rapid and sustained growth.
Private sector the key driver of employment
Since 2000 the private sector has established itself as the key driver of employment generation. While number of central government employees reduced on one hand, private sector jobs kept on increasing. Sectors like finance, insurance and real estate are generating employment at the fastest rate.
As per latest estimates of the labour ministry, about 434mn people over the age of 15 years are engaged in one economic activity or the other.
The key sectors of employment are-
Manufacturing – The sector has the maximum number of employees under the organised private sector. Though employment generation has seen a rise, post-liberalisation, it failed to keep up with the value added by the manufacturing sector. Also the latest surfacing of financing, insurance and real estate has placed it in third position as per employability is concerned.
Textiles & Apparels – Though it has high employment generation potential the segment needs to augment skill development to be at par with global counterparts. The industry accounts for 10% to the country’s manufacturing production, 5% to the country’s GDP and contributes 14-15% of the export earnings. Labour intensity is one of the highest in this sector and overall, it is considered as one of the largest sources of job creator in India.
Education – This sector has always been a steady and secured employment generator. Today there are more than 10mn teachers working at various schools, colleges and universities. Given the government’s focus on education, signified by the hike in the allocation for education in the 2017-18 union budget, this sector is poised at sustaining its growth, if not augment it.
Banking and Financial Services – Emergence of private banks have witnessed a boost in employment in India – from employing just over 0.9mn in FY01 to employing close to 1.3mn in FY15 (source: RBI). Private banks now employ one in every four individuals working in the industry.
Industry experts feel that tech innovations will drive the wave of growth in the sector. Quite naturally then, the banks are increasingly highlighting on the widespread utilization of systems. According to the top engineering colleges of India, banks and other financial institutions are now competing with big tech firms in hiring students for technical roles to support their digital systems. The opportunity of gaining more customers by means of digital transactions, have opened the door for unmatched productivity gains.
Information technology (IT) and IT-enabled services – India’s status as a supplier of abundant skilled labour has long been symbolised by the IT-BPM sector. Approximately 3.86mn individuals are now employed in the sector which is regarded as a major component of private jobs in the country. E-commerce, however, is considered as a distinct sector outside the IT and BPM markets.
However, the economic slowdown in the USA has significantly affected the pace of hiring in this sector. The slowdown is even more evident in the last few years with the CAGR declining from 8.3% during FY09-14 to 5.7% during FY14-17.
Industry leaders predict that automation initiatives are likely to gather pace across IT services companies. Presently, the automation activities are centred mainly in services including infrastructure management, maintenance and BPO. These initiatives could be largely categorised under two sections –
Artificial-intelligence (AI)-based platforms and software tools that aggregate data across processes and legacy systems into a self-learning knowledge base and then automate repetitive business/IT work-flows. Nia (Infosys), Ignio (TCS) and Holmes (Wipro) are examples of such platforms.
Robotic process automation (RPA) tools are software programmes (or ‘bots’) applied on rule-based processes for processing a transaction in terms of manipulating data, triggering responses and communicating with other digital systems, without human interventions.