The Hindu Business Line : Study suggests incentives to build skilled manpower

A PERSPECTIVE study by the National Association of Software and Services Companies (Nasscom) and consultant KPMG reports on the gradually widening IT manpower demand-supply gap in the country and advocates special thrust for building the necessary human resource base through incentives.

While observing that the issue of skilled manpower resources is assuming critical importance as segments within the Indian ICT domain expand at rapid speed, the pool of expertise available for these markets has to grow and keep pace with the industry. "If that does not happen, we are expected to face a manpower crunch as we go forward," the Nasscom-KPMG study noted.

Reflecting consistent growth despite global economic challenges and adverse conditions, exports increased by over 25 per cent in 2002-03 to touch $ 12 billion in 2003. Looking ahead, the country's value proposition and overall shift towards offshore services will enable the country's revenues to grow at a compounded annual growth rate (2003-2012) of 35 per cent, touching $148 billion by 2012.

While IT export services are expected to account for revenues of around $ 55 billion by 2012, at a CAGR of 25 per cent, ITES services will expand to $ 64 billion by 2012, at a CAGR of 44 per cent.

The total manpower needed by the IT/IT enabled services segments will be around 4-6 million by 2012 wherein the IT services industry alone could employ around 0.97 million professionals , up from 0.2 million in 2003. In the IT export services segment, 83 per cent manpower could be employed for systems integration and outsourced support (facilities management) services and for ITES, 80 per cent of the manpower requirements are expected to be in the areas of HR, payment processing and customer care services

The study suggests that the current manpower resources will not be sufficient to meet growth targets, even in the medium-term. Current graduate output and employment preference trends suggest that in the absence of any corrective interventions, there could be a large shortfall in manpower required for IT services and ITES-BPO markets.

Creation of a separate fund, encouragement through incentives to training and coaching activities under the IT and ITES related industry investment in education sector could be given by way of tax exemptions and 100 per cent depreciation treatment, the study suggested.

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