Skills Gap Holding Back India's Growth

INDIA PRODUCES A LARGE NUMBER OF GRADUATES EVERY YEAR BUT ONLY A SMALL FRACTION OF THEM POSSESS THE SKILLS REQUIRED BY TOP IT COMPANIES

- NEETI SHARMA

India’s economic growth and rapid digitisation have led to an unprecedented demand for skilled workers across various sectors. However, the country’s formal workforce faces a significant skills gap.

This issue extends beyond the IT/ITeS [information technology/information technology-enabled services] sector and affects industries like BFSI [banking, financial services and insurance], FMCG [fast-moving consumer goods], e-commerce, manufacturing and automotive.

Confederation of Indian Industry (CII) estimates that the total workforce in the organised sector is at about 50mn and the shortfall at 15%.

The country is currently experiencing an alarming shortage of 150mn skilled workers, up from 138mn three years ago. A subset of this demand for skilled workers is for 30mn workers who have cutting-edge digital skills—50% of the current workforce itself needs to get re-skilled.

Struggle to Fill Positions

The IT/ITeS sector has been the backbone of India’s economic growth. Many companies in the IT/ITeS industries have consistently announced plans to hire thousands of employees annually.

For instance, one large IT services company planned to hire 40,000 freshers in financial year 2023–24, while another targeted over 20,000 hires. However, despite the demand, these companies faced a shortage of adequately skilled candidates.

The skills gap in the IT/ITeS sector is multifaceted. While technical skills like programming, data analytics and cybersecurity are in high demand, there is also a need for soft skills such as communication, problem-solving and adaptability.