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Why Claims That Automation Will Replace the Indian Workforce Are Exaggerated.
Mon, 6 Mar Pre-Open

Recent research from an HR solutions firm predicts that 25% of job cuts due to automation will be from India. According to Mohandas Pai (former CFO of Infosys), by 2025, there will be 200 million young people in the age group of 21-41 with no jobs, or not enough jobs.

The above reports put a dampener on the recent GDP growth recorded by India in the fiscal third quarter. Most job cuts are expected to be in the manufacturing and IT Sector. The number of people employed in the agricultural sector has fallen from 62% to 52%. This has created more dependency on the services and manufacturing industry for employment. Automation and robotics will play a big part in making India competitive on the global scale. The downside of which will be a lot of the workforce will become redundant.

How will India balance between economic growth and keeping its labor force happy?

Although process automation across industries will keep growing, claims of it completely replacing the workforce are highly exaggerated. There is a high cost attached to automation compared to the current low-cost wage rates in India. The labor force need not be replaced, but might need skills up gradations. A structural shift from manual labor to being comfortable with technology to do efficient work is required. For this, the work force needs to be trained.

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The focus should be on job creation. Not on replacement with technology.

Recently, the Indian startup sector was in the news for its mass layoffs. The founders of e-commerce giant Snapdeal announced that they would be taking a 100% pay cut as they lay off hundreds of workers. As the startup industry undergoes consolidation, we are likely to see more such downsizing in the future. But startups have created jobs that never even existed decades ago. This is an example of how technology has helped create jobs rather than replace them.

Also, India has a huge untapped market in rural areas. Growth of manufacturing and services in rural areas will have a dual benefit of improving India's GDP, and increasing employment. The current concentration of the workforce in urban areas needs to be reduced. A workforce spread across various geographies will help tackle the issue of automation going forward. The government will have a huge role to play through initiatives and policies geared at improving employment in rural areas.

Embracing technology, then, rather than opposing it, will go a long way in improving employability for India in the future.

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Jan 18, 2018 (Close)