The Indian market of 1.25 billion people is getting more and more attractive with the government’s pro-business reforms but state-owned enterprises with low-wage capacities built across the country would come under pressure, said delegates at two major conferences held in Singapore this week.
Speaking at the Mint Asia Global Banking Conclave last night, Arundhati Bhattacharya, chairman of the State Bank of India, conceded the ongoing mid-management poaching by new entrants in the country’s financial sector.
India’s heavyweight enterprises, with operation spread across the country, are considered the best source of expertise poaching, said the delegates.
They said these institutions are not only facing the challenge of retaining expertise as competition comes in from new global corporations entering the Indian market with offer of high remunerations, they are also restricted on hiring by official regulatory controls and tight fiscal policies while just about managing through a contract-based employment.
Delegates at the Conclave pointed out that even such contract-based employment have become more attractive to new recruits who consider these assignments and opportunities as training grounds.
“But this could lead to an expertise crunch in the coming years if Indian state enterprises continued facing difficulties in new hiring,” said one official.
The multi-national corporations entering India are set to offer “much more higher and attractive” remuneration on US dollar basis which would lead to salary discrimination and raise the cost of working in India within the coming few years.
“The government must note the wage challenge and must address it along with national initiatives such as Skill India (still in an embryonic state) and Make-in-India,” a leading banker strategising for Indian market told PTI requesting anonymity.
He said that though global markets are slowing down, having plateaued, India must become attractive to mid-level international executives with world class pay slips which, though, would be hard for the multi-national corporations to digest, seeking low-cost business place.
“It is a conundrum in the making,” he added.
“Going back home to India is not attractive at all when you have worked in high wage and safe heaven environments like Silicon Valley or Singapore,” an executive at the summit said.