DBT Bureau
Bengaluru, 22 July 2024
Indian IT services sector is unlikely to see any significant uptick in hiring in the current financial year after a considerable slowdown in the last fiscal year, the Economic Survey for 2023-24 released on Monday showed.
“Hiring in the information technology sector had slowed down considerably in FY24, and even if hiring does not decline further, it is unlikely to pick up significantly,” the survey noted.
Interestingly, the survey for the first time pointed out that artificial intelligence (AI) may not augur well for job creation in a developing economy like India. Citing independent research published in the Economist, the survey pointed out that Indian services exports may face trouble owing to the advent of AI, generative AI, and other such emerging technologies.
“In a recent article, the Economist cites independent research that predicted a slow demise of India’s services exports over the next decade. While the boom in telecommunications and the rise of the internet facilitated business process outsourcing, the next wave of technological evolution might bring the curtains down on it,” the report said.
“In this milieu, the corporate sector has a responsibility, as much to itself as it is to society, to think harder about ways AI will augment labour rather than displace workers. Hiring in the IT sector has slowed significantly in the last two years. We do not have a full picture of overall corporate hiring in the country on a regular basis. In any case, deploying capital-intensive and energy-intensive AI is probably one of the last things a growing, lower-middle-income economy needs,” it pointed out.
Highlighting the growing importance of GCCs (Global Capability Centres), the Economic Survey noted that the flourishing growth of IT services has been supported by the expansion of Global Capability Centres (GCCs) and the tech start-up ecosystem in India.
It noted that India had over 1,580 GCCs by the end of FY23 with total talent employed in these units standing at more than 16.6 lakh. Out of this total workforce employed, over 42% are engaged in engineering, research, and development (ER&D), 34.5% in business process management (BPM), and 23.4% in IT services. The software, internet and banking, financial services, and insurance (BFSI) sectors collectively account for about 58% of India’s IT GCC talent, the survey noted.
“Revenue from India’s GCCs has increased from $19.4 billion in FY15 to $46 billion in FY23, growing at a compound annual growth rate (CAGR) of 11.4%,” it said.
