India to face severe manpower crunch

New Delhi, May 20 (UNI) A huge mismatch between demand and supply of skilled workers in the country will witness a severe manpower crunch in the next five years.

''There are signals of such manpower shortages with the growth rate perking up in the recent years and wage rates getting overheated,'' an estimate made by the industry chamber PHDCCI said.

Chamber President Sanjay Bhatia said manufacturing sector will be hit hard since there are two visible trends in the segment.

One is greater degree of poaching by the Information and Communication Technology (ICT) sector taking into its rolls even electrical, mechanical and civil engineers and diploma holders for doing IT related works.

Secondly no organised efforts are visible both at the private and public domain to create and upgrade the skill sets.

Available statistics indicate that the elasticity of employment in the organised manufacturing sector fell from 0.59 between 1983 and 1988 to 0.33 between 1993 and 2000. Lower elasticity indicates constraints in employment generation.

Employment in manufacturing is estimated at 40.79 million in 1999-2000. If manufacturing grows at 9 per cent with an employment elasticity of 0.33, the total jobs that can be created in the manufacturing sector is 1.2 million per year which is not enough to cover the backlog of employment and take care of the new entrants to the workforce.

With the increasing digitisation of the manufacturing sector, the type of manpower requirements will be for highly specialised and not semi-skilled or people with the conventional capabilities and talents, which the ITI's churn out at present, the estimate said adding that this will require more investment and greater degree of private-public partnerships to shape the skill set of the new entrants to the job market from the technical institutions.

The services sector, which will grow at a faster pace than the agriculture and manufacturing sector will require more number of people.

Major segments that will draw more people are IT, banking, insurance, tourism, retailing and many others, which will be the key drivers to economic growth.

IT sector, including electronics, computer software and IT Enabled Services (ITeS) is growing at over 30 per cent per annum.

The manpower requirement for this segment will be close to three million workers in a year. If the manpower growth is not sufficient enough to sustain the industry, the poaching will continue aggravating distortions in the job market, it added.

The other segments that might require higher in take of skilled manpower are retail, real estate, insurance and banking.

UNI