Draft Report of the High Level Group on Services Sector

2.3.1 Availability of talent

A large talent pool, particularly of engineering graduates and their knowledge of the English language were the original sources of India’s strength in IT and BPO services. This enabled the number of IT-BPO professionals employed in India to grow from about 200,000 in 1997-98 to over 1.6 million in 2006-07. At the end of the X Plan, the Indian higher education system was one of the largest in the world with 378 universities, 18064 colleges, faculty strength of 4.92 lakh and an estimated enrolment of 140 lakh students, out of which about 5 lakh were technical graduate courses. There were 23 central universities, 216 state universities, 110 deemed universities, 11 private universities and 33 institutions of national importance established through central legislation and 5 institutions established through state legislations.

Among the technical education institutions mention must be made of 7 Indian Institutes of Technology (IITs) and 6 Indian Institutes of Management (IIMs), 1617 engineering and technology colleges, 525 institutions for Diploma in pharmacy, and 4 Institutions of Architecture. For post-graduate colleges, there are 1147 educational institutions for MBA/PGDM and 953 for MCA. There are 7 Deemed-to-be-Universities, including the Indian Institute of Science, Bangalore, School of Planning & Architecture (SPA) and the Institute of Information Technology (IIIT) Allahabad and 20 National Institutes of Technology (NITs) and a number of other specialised institutions.
Currently the industry estimates that India has a pool of 1.773 million graduates suitable for IT-BPO, which is more than the combined talent pool in China and Russia. However, even to enable India to maintain its current share of worldwide IT-BPO a gap is likely to appear within a year or so between the demand and supply of suitable graduates. One reason for this is the low proportion of fresh graduates who are employable in the sector. Assuming that only 25% of engineers are suitable for IT jobs, 15 % of commerce graduates for employment in BPO finance and accounting work, and 10 % generalist graduates for other BPO work, the industry assessment is that the 100,000 additional graduates will have to be available beyond the projected supply each year (NASSCOM-McKinsey Report 2005). If India is to enhance its competitiveness and increase its share of worldwide IT- BPO the requirement will be for a larger number of graduates.
Much of the BPO work is of a routine nature such as customer contact services, but increasingly the outsourced jobs are getting sophisticated and industry estimate (Kiran Karnik) is that in 2007 the share of Knowledge Services was 15%. The main Knowledge Services already outsourced to Indian companies are animation and simulation services, data research and analytics, and litigation services. Other possibilities are in intellectual property research, medical content and services, pharmaceutical services, writing/content development services, database development services and end-to-end logistic invoice services. The big impediment in India making progress from data processing and customer contact services to knowledge process services is deficiency in qualified talent in both quantitative and qualitative terms in economics and statistics, law, medical science, pharmacy, media and English language in particular.