Skill shortage presents hurdle to India's growth: World Bank

Updated on: Tuesday, June 07, 2011

Skill shortage remains one of the major constraints to growth in the Indian Economy, says a recent World Bank working paper.

"Insufficient supply of quality skills is one of the major impediment to further economic growth in India," World Bank working paper 'Employability and Skill set of Newly Graduated Engineers in India' said.

About 64 per cent of employers in India are not satisfied with the skill sets of fresh engineering graduates, it added.

The authors of the working paper Andreas Blom and Hiroshi Saeki surveyed employers in 20 sectors such as IT, power and infrastructure in India.

Half of the respondents were large companies with over 500 employees, with more than 40 per cent from North India, 27 per cent from the West and 19 per cent from the South.

The working paper further noted that the skill gaps are largest within higher order thinking skills and smallest among the lowest order thinking skills.

Interestingly, most employers, were very satisfied with the English communication skills of the new graduates.

Adding that the skills shortage is more in sectors such as IT, infrastructure and power, where engineers play a critical role, the report said, "The skill shortage has forced India's exporting IT sector to raise wages by 15 per cent from 2003-06."

In its sixth annual talent shortage survey, Global HR firm ManpowerGroup had said that India ranks second as far as the problems of skilled labour shortages are concerned.

"The number of companies in India reporting difficulty filling vacancies is second only to Japan," the ManpowerGroup had said.

It may be recalled that Assocham and Mackinsey had also in a report in 2005, said that only 25 per cent engineering education graduates are employable by a multinational company.

Skill shortage presents hurdle to India's growth: World Bank

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