The Confederation of Indian Industry (CII) today said the government should announce a separate outsourcing policy to protect thousands of workers employed in that sector.
"There is a need to recognise the outsourcing industry valued at Rs 25,000 crore. It is growing at the rate of 10-15% year on year," CII Southern Region Chairman (Sub Committee on Skills and Employability) B Santhanam told reporters here.
Emphasising the need for government to announce a separate "outsourcing policy" he said 40% of the work force in South India are in the outsourcing industry.
"In particular, large states like Tamil Nadu and Karnataka need a separate outsourcing policy," he said after releasing a report on Manpower Outsourcing in Southern states.
As per the report, various issues, including "lack of monitoring by government agencies and low entry barriers make it easy for fly-by-night operators and had also led to various malpractices in the industry".
Besides, the report said outsourced service providers are in a unique position as they can help companies and government adapt to market changes, leverage economic advantage and can emerge as a prime mover for creating employability.
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"These service providers, if ably supported by the government can be powerful intermediaries who could be partnered to tackle skill mismatches and changing labour market requirements," the report said.
Calling for a regulatory framework to enable better governance for the sector, the report suggested that the outsourcing sector be provided "independent industry status" as it would bring in parity in terms of legislations and bridge the divide between organised and unorganised sector.
Some of the report's key findings include South India contributing 24% to all-India work force of 114 million people. The total number of employees working in this sector is estimated at around 45 million.
In addition, manufacturing, retail and government sectors emerged as the largest users of outsourced employment.
The outsourcing industry witnessed a 30% increase on the number of contract employees in the last three years and the organisations expect the growth to continue in the coming years as well.
A total of 132 service providers in South India were surveyed for the study.