INDIA’S information technology (IT) sector, which has witnessed explosive growth in recent years, is confronting a nasty reality that threatens to upset its ambitious plans. The industry is increasingly facing a skills shortage, which coupled with a huge employee turnover and rising wage bills, is crippling its growth prospects.

But the IT sector is not alone in encountering this crisis. Other equally rapidly growing sectors, including IT enabled services, civil aviation, retailing, infrastructure, healthcare, biotechnology, education, banking and financial services, media and entertainment and even the defence forces are making do with a scarcity of trained and qualified personnel.

Earlier this month, top executives of the country’s premier information technology company, Infosys Ltd, bemoaned the lack of qualified professionals and warned that the industry would suffer over the coming years. T.V. Mohandas Pai, the human resources development director of the Bangalore-based IT major said the biggest constraint today is availability of talent, not infrastructure or capital.

The company’s respected founder and chief mentor, N.R. Narayana Murthy, urged Prime Minister Manmohan Singh to initiate reforms in the higher education sector. Singh and a few others in the government are all for changes in the sector – including allowing private and even international players to set up universities – and to reform regulators such as the University Grants Commission.

But they face an uphill task, with opposition from an ageing warhorse, the HRD minister Arjun Singh, and the left lobby, which has a stranglehold on university and college teachers’ unions.

Sam Pitroda, a prominent Non Resident Indian (NRI) – who had advised former Prime Minister Rajiv Gandhi in matters relating to technology and telecommunication – headed a special ‘Knowledge Commission’ appointed by Singh.

The Pitroda panel had also called for an overhaul of the higher education system, granting autonomy to existing institutions of excellence and premier varsities. The National Knowledge Commission had also said India would need about 1,500 new universities by 2015 and dozens of national institutes – like the Indian Institutes of Technology and the Indian Institutes of Management – to ensure equitable growth.

But the powerful anti-reforms lobby not only succeeded in delaying implementation of the recommendations, but even derailed the entire issue of reforms by resorting to hackneyed themes such as reservation in premier institutes of learning.

Unfortunately, both the Congress-led United Progressive Alliance (UPA) government, and its predecessor, the BJP-led National Democratic Alliance (NDA) regime, are averse to granting autonomy to higher education institutions. Singh, who projects himself as a ‘leftist,’ is ideologically – in terms of his worldview on education – closer to his NDA counterpart, Murali Manohar Joshi, a hardcore Hindutva follower, who refused to loosen the government’s hold over higher education institutions.

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THE crisis in India’s higher education system is evident in crucial sectors of the economy. IT industry bigwigs frequently lament about the quality of engineering graduates, most of who have to undergo intensive training before being absorbed.

The shortage of qualified and trained personnel threatens to upset the expansion plans of several sectors, including IT and civil aviation. For instance, about 50 per cent of pilots in India are foreigners, as the existing academies are unable to meet the surging demand for fliers.

According to Kanu Gohain, director-general, Civil Aviation (DGCA), the government has cleared 1,490 foreign pilots, allowing them to operate services to help meet the acute shortage. Foreign pilots are on one-year contracts, which can be extended for up to three years. The government plans to extend this to four years.

It has also been forced to allow pilots from the Indian Air Force to switch over to the civil aviation sector, though the government is not too keen on this, fearing a huge influx. Likewise, the government has extended the retirement age for pilots from 58 to 65, but all these measures are having marginal impact on the looming crisis.

Training academies in India churn out a mere 250 pilots every year, as against a requirement of over 1,000. And training schools are also confronted with the same problem, as trained pilots are grabbed by airlines that pay them many times more wages than that offered by the government schools.

But it is not just commercial airlines that are facing the problem. Even state governments are finding it difficult to hire pilots, as private charter operators and corporate houses lure them. In some states, for instance, governments are forced to charter aircraft – or plead with industrial groups to lend their aircraft – to ferry chief ministers and other VIPs, as their own aircraft are idling in hangars because of lack of pilots.

There are about 3,000 pilots in India today (including the 1,500 foreign ones) and about 4,500 are needed over the next five years. The civil aviation sector is witnessing record growth, thanks to the proliferation of low-cost carriers, who are luring millions of Indians to take to the skies. The industry is growing at a breathtaking clip of over 25 per cent annually.

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WITH the Indian economy growing at over nine per cent annually, many sectors are witnessing double-digit growth. The shortage of skilled personnel has resulted in ballooning salaries in many industries and service sectors, drawing thousands of public servants and executives from public sector companies.

Last week, the government decided to raise the salaries of the Indian President, the vice-president and state governors. The president’s salary has been doubled to Rs100,000 a month and the VP’s has gone up to Rs85,000. The salaries were raised in preparation for an increase in the remuneration to bureaucrats; the Sixth Pay Commission is currently preparing its recommendations, which should benefit millions of ‘babus’.

The huge disparity in wages between the public and private sectors is also hurting both the federal and state governments. In Maharashtra, for instance, several top bureaucrats in the revenue department have opted for voluntary retirement, as they have been offered plum posts by large business groups that are promoting special economic zones, and want experts who are familiar with land acquisition laws and related matters.

Similarly, public sector companies in other sectors including telecommunications, insurance, public works departments, port trusts, airports, even the railways, are losing key personnel to the private sector. As many projects are being taken up on a public-private partnership basis, both international and domestic Indian firms that are executing infrastructure-related projects are offering much higher salaries and luring government employees.

Even the armed forces are experiencing a shortage of officers. General Deepak Kapoor, the army chief, last week bemoaned the fact that the defence forces were unable to attract fresh recruits. The army itself is facing a shortage of 11,000 officers, as about 3,000 officers have opted for premature retirement in recent years, many obviously ending up with private firms.

Youngsters, he points out, are “attracted by the better pay-packets offered by the corporate world,” and don’t want to join the services. He hopes that the sixth pay panel would rectify the deficiencies and bridge the gap in remuneration between the private and public sectors.

Elite defence schools such as the National Defense Academy and the Indian Military Academy, are finding it difficult to even fill up the vacancies. The NDA, which has an annual intake of 300, could fill in less than 200, while the IMA, which has a 250-capacity, could get just 86 officer recruits. Worse, about 150 graduates who got through the entrance test, decided against joining the defence academies, opting for the private sector.

Sadly, even though domestic and international educational institutions are willing to open hundreds of new colleges and universities to meet the huge shortfall in trained personnel, the government is reluctant to allow them to do so, as its higher education policy has been hijacked by some ideologues caught up in a time warp.