India’s Labour Shortage

The New York Times writes that India’s outsourcing industry is facing a labour shortage.

Indias $23.4 billion outsourcing industry accounts for most of the countrys software and services industry, which makes up nearly 5 percent of gross domestic product. The industry employs 1.2 million workers, has sparked a consumer revolution in India, and is accelerating at more than 30 percent a year.

On the sidelines of the Nasscom meeting, B. Ramalinga Raju, chairman of Indias fourth- largest outsourcing company, Satyam Computer Services, said that India produced three million college graduates every year, including nearly 400,000 engineers. But most of these are uncut diamonds that have to go through polishing factories, as the trade requires only polished stones, Mr. Raju said.

In a country of 1.1 billion people, raw talent is plentiful, he said, but not all of it is market-ready.

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