Vviewpoints
DOI: 10.1145/1409360.1409369
emerging Markets
labor supply in the
indian iT industry
Exploring the evolving dynamics and interconnectedness
of India’s educational system and its IT work force.

INDia is a country ofextrem es: for everything that exists in its socioeconomic structure, there exists an opposite somewhere close by. On one hand, the wealthiest family in India is in the process of building a billion-dollar mansion-house; on the other, approximately 10 million families live on government-owned land in shanties that each cost less than $100.^a Similarly, although the seven Indian Institutes of Technology (IITs) produce approximately 4,000 graduates in engineering and computer science that are among the best in the world, approximately one-fourth of all high school graduates who want to pursue engineering or computer science are unable to do so, primarily because of cost.

iLLus Tra TioN by Eskimo sQuarE

According to research conducted by global research and analytics firm Evalueserve ( www.evalueserve.com) approximately 85% of the labor supply for the IT industry (both exports and domestic) in India is composed of engineers (with four-year degree courses) and Master of

a All dollar amounts cited in this column are expressed in U. S. currency.

Computer Applications (MCA) graduates (with five-year degree courses). The remaining 15% comprises graduates (both five-year master’s and three-year bachelor’s) in mathematics, commerce, and sciences. During 1998 and 2008, after including inflation, the total amount spent on technical and IT education for such graduates grew by 17% every year. Whereas the class of 2004 had approximately 273,300 engineering and MCA degree graduates, the class of 2008 had approximately 454,200. During 1998 and 2008, the number of engineering and MCA graduates grew at an annual

rate of 13.5%. Even if this growth rate can be maintained, the demand for such professionals is likely to increase at an annual rate of 15.5% until 2016 (see my July column), and hence there would be a cumulative shortage of 100,000 to 150,000 such graduates by 2016 (where no such shortage exists today).

The expenditure by the Indian government on technical and IT education increased from $375 million in 1996 to $830 million in 2006. Although the Indian government’s overall expenditure grew at an annual rate of 8.4%, this rate is only half the overall growth rate of 17% mentioned earlier. More disconcerting is the fact that the Indian government’s technical education expenditure as a percentage of total education expenditure decreased from 4.1% in 1996 to 3.9% in 2006. Furthermore, according to the National Knowledge Commission ( www.knowl- edgecommission.gov.in) that advises the prime minister of India, approximately 75% of the current funds go toward salaries and benefits, 15% toward rent and utilities, and the remaining 10% are not even sufficient to main-