India's Chronic Shortage of Skilled Workers.

Across western economies, the name of Bangalore - India's showcase technology city and the world's back office - is frequently used as a verb.

"To get Bangalored" is a phrase uttered, often pejoratively, to describe the shipping of high-paying white-collar jobs to low-cost Indian call centres or technology parks.

In recent years, outsourcing of thousands of jobs to India has prompted criticism from figures including Barack Obama, the US president, who has implored US companies to "say no to Bangalore, yes to Buffalo".

While India is perceived globally as a monster devouring western jobs, in reality it faces an intractable skills shortage that bedevils economic progress.

How is that possible, baffled observers wonder, in a country blessed with a demographic dividend and an abundance of labour? Two-thirds of India's 1.21 billion people are below the age of 35. India's colleges disgorge more than 750,000 science and engineering graduates every year.

But the National Association of Software and Services Companies (Nasscom), an industry lobby group in New Delhi, estimates that only 26 per cent of those graduates are fit for employment in India's US$60 billion (Dh220.37bn) technology sector.

"India has more than a billion people and it still faces a chronic shortage of manpower," says the head of human resources at a leading software giant. The executive did not wish to be named as the company does not officially speak to the media in the run-up to the release of its quarterly financial report, expected this month. "It's a paradox like being stuck at sea - there's water everywhere but you could still die of thirst."

The technology and market research company Forrester said this month the US technology market - which makes up the largest client base for Indian tech companies, contributing more than half of their earnings - is expected to expand 8 per cent this year, exceeding the 7.4 per cent projected earlier.

A poll of technology analysts conducted by Reuters says India's top-three tech companies - Tata Technology Services, Wipro and Infosys - are expected to post profit growth of between 14 and 22 per cent for the quarter that ended on March 31.

Such dynamic growth is expected to increase an already rapacious demand for highly skilled workers. The Grant Thornton International Business Report, a quarterly survey of global companies released this month, said 64 per cent of Indian businesses expected to increase their workforce this year, the highest among the 39 economies surveyed.

But 51 per cent said the paucity of skilled labour would retard their growth this year - a 30 per cent increase from last year.

The Associated Chambers of Commerce and Industry (Assocham) estimates that 10 million to 15 million jobs requiring highly skilled workers will be generated by India's services sector this year. If the demand is not met, Assocham warns, an economic slowdown could result.

At the heart of the problem, analysts say, is India's education system, which emphasises and rewards rote learning rather than encouraging students to acquire practical and job-oriented knowledge.

A survey