More than a third of the jobs in India are at the low end of the market, with the country’s median wage around $10 per hour, according to the Confederation of Indian Industry (CII), the main trade union.
The labour market has become so fragmented that the CII is worried about the state of the job market and its impact on the country.
The group says there are only about 200,000 jobs in the country right now and the number will decline significantly in the coming months.CII president and CEO Gopinath Munde says job creation in the industry is already “failing” due to the absence of foreign workers, a lack of infrastructure and low productivity in the sector.
“The labour force participation rate is the lowest among the top 25 countries, and the proportion of jobs that are held by non-nationals is also declining,” Munde told the Thomson Reuters Foundation in an interview on Tuesday.
“For those who are still employed, the gap between the demand and supply is widening, the wages of these workers are declining and the employment is shrinking.
So, in a way, this is a vicious circle.”
More than 50% of the workforce in India’s IT sector is non-CII, Munde said.
More from GlobalPost: Indian IT sector job growth slowing despite demand from abroad”We’re in a vicious cycle, because we’re creating jobs but we’re also creating a lot of non-citizen labour,” he said.
“And it’s creating a big burden for our economy.
That’s why we’re worried.”
If we’re not careful, we could end up having a lot more unemployment in the long term.
“He said India’s job market is now on the brink of “a catastrophe”.”
We need to look at the labour market in a completely different way, because the future of the Indian labour market is not going to be good.
“In fact, we may not even be able to recover from the worst-case scenario,” he added.
India is the world’s second-largest economy, after China, with more than 10.4 billion people.
Its workforce is expected to reach 1.1 billion by 2030.
Its biggest employers are multinationals such as IBM, Microsoft, Oracle, Infosys, Microsoft and SAP.
India has the world top ranking in the IT job market, according the Organisation for Economic Co-operation and Development (OECD), but Munde’s comments come as global IT companies struggle to find qualified candidates and fill jobs.
He said the CITA and the IITs (Indian Institutes of Technology) are the only two institutes with significant presence in India.
“I believe in the strength of the ICT industry in India, which has more than 8,000 employees.
I think we should take this opportunity to promote Indian IT companies,” he told the forum.”
We should also help Indian IT employers, because if we don’t, we’ll end up with a situation where a lot fewer jobs are created.”
Munde said the number of foreign IT workers is a critical issue.
“It’s an issue that needs to be tackled because it has an impact on both the supply and demand side,” he noted.
“To be frank, there’s a huge mismatch between the supply of labour and the demand for labour, which is creating a massive mismatch.”
The global trend of hiring foreign workers is changing the labor market, he added, and will create a big challenge for the industry.