The fine print of the latest Economic Survey states that a shortage of skilled digital talent may threaten up to 2 lakh jobs per year in the IT sector and suggested the government to address infrastructure issues in smaller cities and towns.
“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,” the survey said, quoting executive search firm Head Hunters India. It said the growth in digital technologies like cloud-based services is happening at a much faster pace and the companies have to learn the new technologies and re-skill.
As per a World Bank report, automation threatens 69% jobs in India, while it threatens 77% in China and 85% in Ethiopia.
The survey is, however, less pessimistic than an earlier McKinsey report which had said nearly half of the workforce in the IT firms will be “irrelevant” over the next 3-4 years and the bigger challenge ahead for the industry will be to re-train 50% to 60% of the workforce as there will be a significant shift in technologies.
Poor infrastructure
The survey, authored by Chief Economic Adviser Arvind Subramanian, said underdeveloped infrastructure in tier II and III cities were some of the hindrances in developing digital skill talent.
It also sought easing of restrictions on startups for better skill development.
Many firms have set up dedicated programs to re-skill their existing employees. In 2016-17, around 1.7 lakh jobs were created.
There was a gross hiring of over 50,000 by the top 5 companies, the mid-year survey said quoting Nasscom.
However, the Labour Bureau of India data indicates that changes in employment in IT-BPO sector during April-December 2016 was only 0.22 lakh.