Speaking to FE, the minister said the digital economy was poised to grow to $1 trillion in the next five years (2022) from the current $355 billion.(Reuters)Categorically denying there are massive job cuts in the IT industry, information technology minister Ravi Shankar Prasad on Friday said the growing digital ecosystem would lead to the creation of more jobs. Claiming, in line with Nasscom that 2.5-3.0 million jobs would be by 2025, Prasad said his ministry had roped in McKinsey and Co to help it tap the full potential of the digital economy.
Speaking to FE, the minister said the digital economy was poised to grow to $1 trillion in the next five years (2022) from the current $355 billion. “There is huge scope to increase the job potential in the sector. Once McKinsey submits its report a new foundation for the future would be laid, ” he said.
“The talk of huge job cuts in the IT sector is completely wrong and both Nasscom and company heads are denying it. There are some adjustments which is a normal feature and re-skilling is required in the IT sector,” Prasad said, adding the fear of job losses is exaggerated.
Industry body Nasscom had last week said that industry has been adding around 2 lakh jobs each year for the past three years, added 170,000 jobs in FY17 and would add 150,000 this fiscal.
It even said that it would add around 2.5-3 million jobs by 2025, which means more than 357,142 every year. It said the total employee base of the industry is of 3.9 million, which includes start-ups and e-commerce sector. Of the 3.9 million employee base, 95,000-100,000 are employed in start-ups and 50,000-60,000 in e-commerce.
Though Nasscom gave such an assurance, a few days prior to the statement its president R Chandrashekhar in an interview to business news channel CNBC TV18 had said, “While the first $100 billion required about 3 million people, the next $100 billion is going to require only 1.5 million people. It is not just the numbers, it is also the kind of skills that are needed”.
Prasad said that newer areas like cyber security, increased manufacturing of electronics in the country and mushrooming of common service centres and BPO is semi-urban towns would further add to jobs in the sector.
On job cuts in the IT sector, Kotak Equities Research in its recent report said that as per reports, (which the have denied), aggregate job losses at the seven IT companies would be 56,000, which translates into 4.5% of its aggregate headcount. “In a now familiar pattern, Indian IT companies let go of 1-3% employees after annual performance measurement. This year, we could see a slightly higher proportion let go (say 2-4%), a difference of scale rather than kind. We believe that slower growth is making jobs more difficult to come by for those who find themselves out of jobs,” the report said.