Hiring in IT sector unlikely to pick up significantly, says Economic Survey

Representative image

The Economic Survey for the financial year 2023-24, tabled on July 22 in the Parliament, said that hiring in the information technology (IT) sector had slowed down considerably in the last financial year, and even if hiring does not decline further, it is unlikely to pick up significantly.

The comment on the IT sector in the Survey comes at a time when headcount in some of the biggest IT companies declined for the first time in decades. In February, tech industry body Nasscom had said the sector will create just 60,000 new jobs in the FY24, which pales in comparison to the 270,000 jobs that the sector created in the previous fiscal year.

Nonetheless, the additions in FY24 would take the total to 5.43 million employees in the services export sector.

“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.

The document further says that IT and business services will likely retain their prominent international presence in the medium term.

“However, studies suggest that the application of Artificial Intelligence (AI) is likely to restrain the growth opportunities for business services progressively and, therefore, poses a challenge to long-term sustainability and job creation,” the document read.

It further said that the IT and IT-enabled services have been instrumental in maintaining the country's external balance through export earnings, which are set to increase further.

“The flourishing growth of IT services has also supported the expansion of Global Capability Centres (GCCs) and the tech start-up ecosystem in India,” the document read.

Also read: Revenue of ER&D GCCs grows over 30% to $25 billion GCCs in India