The Curious Case of Indian Job Market

The job market in India is at an interesting juncture. According to the Reserve Bank of India's (RBI) Measuring Productivity at Industrial Level India KLEMS (capital, labor, energy, material, services) data, India added 4.67 crore jobs in FY24. The data further reveals that the total number of provisional jobs currently stands at 64.33 crore, up from 59.67 crore in FY23. However, this figure is significantly higher than estimates from private surveys, which highlight the country's high unemployment rate. Additionally, the distribution of these job opportunities presents challenges. For instance, a Bloomberg report indicates that approximately 46 percent of the workforce is still employed in agriculture, a sector that contributes less than 20 percent to the gross domestic product (GDP).

In 2023, the manufacturing sector accounted for only 11.4 percent of total employment. The Indian government aims to increase the manufacturing sector's contribution to 25 percent of the economy's output by 2025 through various programs and policies. This disparity between the growth in job opportunities and the rising unemployment rate can be attributed, in part, to the skill gap. According to data from the Centre for Monitoring Indian Economy (CMIE), the unemployment rate reached an eight-month high of 9.2 percent in June 2024.

The case of IT hiring is also not much different. IT companies are looking for talents with multiple skills. Lend your years to Rajesh Balasubramanian, Executive Vice President & Global Head –Talent Supply Chain, Hexaware Technologies. In a recent interview with CEO Insights, he said, “The hiring process going forward will be longer and more meticulous, with multiple rounds of evaluation, including customer interviews, becoming quite a norm. On the supply side, the talent pool has become highly narrow over time. The overall IT spending from the clients is also shrinking.”

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