Economic Survey 2024: Hiring in IT sector unlikely to pick up significantly, revenue of ER&D GCCs up over 30%

The Economic Survey for the financial year 2023-24 said that hiring in the information technology (IT) sector is unlikely to pick up significantly. Hiring in the sector had slowed down considerably in the last financial year. 

The comment on the IT sector comes at a time when headcount in some of the biggest IT companies declined for the first time in a decade. In February, Nasscom had said the sector will create only 60,000 new jobs in the FY24 compared to 2,70,000 jobs that were created by the sector created in the previous fiscal year. 

“However, leveraging the initiatives taken by the government and capturing the untapped potential in emerging markets, exports of business, consultancy and IT-enabled services can expand,” the Survey read 

According to industry experts, given the uncertainties such as the looming US elections, the timeline by which tech spends will return is not completely clear, which means hiring in the Indian IT sector continues to be in a limbo.

The Economic Survey also found that engineering, research, and development (ER&D) Global Capability Centres (GCC) have grown by over 30 percent to about $25 billion in financial year 2022-23. 

In comparison, the IT and business process management (BPM) sectors grew faster in percentage terms but on a smaller base. GCCs within the IT segment grew by 30 percent to $9.7 billion, while the BPM segment grew about 27 percent to $10.7 billion in FY23. 

The data points towards the larger debate around the IT services industry in India, which has been struggling in the last couple of quarters. 

By FY23, GCCs in India have grown significantly to over 1,580 centres with over 2,740 units from over 1,000 centres in FY15. These centres contribute to economic growth by providing high-quality employment, the economic survey said. 

Meanwhile, the Economic Survey 2024 has said that the Indian economy needs to generate around 78.51 lakh jobs annually in the non-farm sector to meet growing demand and population growth. 

India’s workforce is nearly 56.5 crore, with more than 45 percent employed in agriculture, 11.4 percent in manufacturing, 28.9 percent in services, and 13.0 percent in construction.  

In a cheer for women employment, India’s female labour force participation has been rising over the last six years, and the unemployment rate is on the decline, dropping to 3.2 percent in FY23.