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Availability of adequate manpower: A crucial constraint for 11 Five Year Plan, Shri R V Shahi, Former Secretary, Ministry of Power

The targeted economic growth requiring massive capacity addition in the power sector, of the order of more than 68,000 MW, excluding the spill over projects of the 10th five year plan, is indeed a great challenge because it would be over three times of the best that has ever been done in any five year plan. It may be recalled that when the 10th five year plan began in April, 2002 (that was also the time when I joined the government as Secretary, Ministry of Power), the concerns all around were centering on the major constraints on how to finance. Everybody believed that for an optimistic capacity addition, it would be virtually impossible to organize the financing needed for the sector. However, the developments of subsequent years indicated that it is not the finance that proved to be a bottleneck but there were a few other vital inputs such as fuel which stood in the way. As a matter of fact, when the 10th five year plan ended in March 2007, excluding the projects which had already been commissioned and about 8,000 MW projects which had slipped to XI Plan, more than 48,000 MW capacity projects were under construction and all of them had their financial closure completed. In addition, there were atleast a dozen more projects aggregating to about 5,000 MW capacity where finance was not an issue, but in view of lack of committed linkage of fuel they were not able to proceed.

11th five year plan, with much larger and more ambitious targets ahead, would again, there are reasons to believe, not face the constraint of financing as such. In any case there could be a number of options which could be invoked to match the gaps if any in financing these projects. However, it appears that the most difficult constraint and challenge that the infrastructure sector in general and power sector in particular is going to face is one of having adequate number of suitably qualified and trained skilled manpower and managers.

In the recent few months, there have been a number of reports which have appeared in both national and international journals highlighting the difficulties faced by Indian business, trade and industry on retaining their existing experienced technicians and managers and also on their efforts on inducting new personnel. Some of the points that need to be underscored in this regard are as follows :

  • Even excellent organizations like NTPC are experiencing the situation of flight of their engineers and other professionals. NTPC have programmes to almost double their capacity in next 5-6 years.

  • In fact, the phenomenon of engineers leaving their domain knowledge fields and getting into I.T. started a few years back. This resulted in the industry in manufacturing, consulting and research not being able to get top class engineers with excellent academic attainments for these fields. They started experiencing the shortage of good Metallurgists, Electrical engineers, Mining engineers, Ceramic engineers, Mechanical engineers and lately even Civil engineers. Bright young boys and girls coming out of institutions started preferring getting into I.T. sector rather than choosing a career in their domain knowledge sector.

  • The flight of technically trained professionals from manufacturing to service sectors such as banks and consulting firms through management institutions, after their MBA programmes, started even earlier. Industry and business have been experiencing this particularly over last two decades.

  • When the Indian economy is growing at over 8 to 9%, and economic activities have entered a different trajectory, needs of qualified technical hands and also other professionals have multiplied. The sectors which are growing, as per recent studies, at much faster rates, are various segments of infrastructure which include Power, Petroleum, Road, Port, Civil Aviation, Real Estate etc. Civil engineering activities have particularly paced up at a very rapid speed. There was a time when civil engineers had difficulties in getting placements. Today they are in heavy demand.

  • Even at lower levels, shortages are being faced in the categories of fitters, electricians, carpenters, masons etc.

The Working Group On Power for the 11th Five Year Plan, which I had the privilege of chairing as Secretary in the Ministry of Power, had set up a sub group, and rightly so, exclusively to address the issues concerning Human Resources needed for 11th Five Year Plan. It identified a number of areas where substantial strengthening will be needed in the areas of recruitment and training to meet the huge shortfalls of manpower. It worked out the additional manpower required for each area of power sector namely generation, transmission, distribution, rural electrification etc. Within generation it also worked out the specific requirements of hydro sector, thermal sector and nuclear group. The following tables highlight the magnitude of the requirements and the size of the problems that are ahead both in 11th Plan (2007 - 12) and 12th Plan (2012 - 17).

At present power industry directly employs about 9,50,000 personnel in different categories. About 75% of these are in technical fields and balance belonging to various professional and office work.

Estimated Manpower as in April 2007 (in thousands)

Technical

Non-Technical

Total

Thermal Generation

100.45

35.82

136.27

Hydro Generation

47.71

20.64

68.35

Nuclear

8.29

3.91

12.20

Transmission & Distribution

559.62

174.03

733.65

Total

716.07

234.40

950.47

In last several years manpower productivity in power sector has improved. In 10th five year plan itself Man-MW ratio has improved from 7.5 to 5.4. The Working Group has projected further improvement to 4.47 by 2012 and 3.77 by 2017. In thermal generation sector the improvement has been remarkable as may be seen from the following Table :

Man/MW Rate Ratio

Over all

Thermal

Hydro

Nuclear

Total

2002

9.42

1.78

2.2

3.97

7.5

2007

7.00

1.44

1.95

2.96

5.41

2012

5.82

1.16

1.76

2.22

4.47

2017

4.93

0.97

1.52

1.77

3.77

Keeping in view the improved man-megawatt ratio and also retirements etc. the manpower requirement for XI and XII Plans were worked out by the Working Group. We need 3,44,000 additional hands in XI Plan.

Additional Manpower for XI Plan (in thousands)

Technical

Non-Technical

Total

Thermal Generation

31.44

12.27

43.71

Hydro Generation

25.32

7.14

32.46

Nuclear Generation

3.85

1.64

5.49

Transmission

26.11

7.83

33.94

Distribution

176.00

52.80

228.80

Total

262.72

81.68

344.40

In the XII Plan, the power sector needs 2,93,000 additional manpower - in the technical fields 2,26,000.

Additional Manpower for XII Plan (in thousands)

Capacity Addition (MW)

Technical

Non-Technical

Total

Thermal

40,200

26.93

10.00

36.93

Hydro

30,000

37.50

6.30

43.80

Nuclear

12,000

13.20

5.64

18.84

Transmission & Distribution

148.37

45.60

193.43

Total

82,200

226.00

67.00

293.00

These requirements do not include the needs of related industries e.g. construction, coal etc. By the year 2017, power sector alone will have manpower strength of the order of over 13.22 lakhs.

Manpower at the end of 12th Plan (in thousands)

Thermal Generation

131.34

48.16

179.50

Hydro Generation

96.18

28.35

124.53

Nuclear

22.92

10.07

32.99

Transmission & Distribution

753.65

231.35

985.00

Total

1004.00

318.00

1322.00

From the above tables it may be observed that the task, if not impossible, is really highly challenging. It would require multiple actions and co-ordination with a large number of agencies including Technical Institutes, Polytechnics, Universities and other organizations.

The Business Week (New York) in their latest issue of August 20th 2007, have brought out a very useful piece which emphasizes the challenging nature of this problem of in industry having to face the manpower shortage "Not long ago, India's skilled labour supply seemed limitless. Today, companies face high turnover, escalating salaries, and shortages of qualified workers and managers. Less than a quarter of companies surveyed in 2006 in India by McKinsey were meeting recruiting needs. By 2010, McKinsey predicts, India will face a shortfall of 500 thousands staff capable of doing work for multinationals". If further says "The scale of human resources challenge is dizzying. Six years ago, for example, Accenture had 250 workers in India. By this fall, it expects to reach 35,000".

The problem is real. Steps and solutions can no longer be postponed. Urgent action is imminent. The infrastructure sector in general and power in particular have to respond to the emerging challenges with greatest sense of urgency. The following solutions need to be pursued:

  1. The operating companies need to revisit their HR policies in order to retain their competent managers and other staff. These policies could include the areas of job satisfaction including job redesign, compensation structure, career growth planning, suitable incentive for long service with the company, stock options and other financial and non financial motivating incentives.

  2. Some of the matured organizations where inadequate growth and expansion of the company has not been able to ensure a proper career progression and has resulted in stagnation of its managers should not be unduly concerned on comparatively a higher turnover of its people. In fact this could facilitate on the one hand availability of trained people to other companies, and on the other this might ease out the situation of the stagnation within the company from where people move out.

  3. Companies like NTPC may help industry by way of providing experienced managers and also solve problem of senior level career management by providing better growth to their senior executives. In such cases, larger intake of fresh engineers and other professionals may address the issue of quantitative expansion of their requirement of manpower.

  4. Companies would need to think out-of-box solutions which might include campus selection much in advance, may be in the pre-final year itself, rather than waiting till the time they complete their course, or are about to finish.

  5. Collaboration with academic institutions for tailor made programmes, capsule courses, shorter training programmes with appropriately designed blend of on-job and formal training modules moving concurrently.

  6. Renowned technical institutes and universities may think of franchising, under their close supervision, the training programmes as also courses on specific topics, which could be executed by a network of such institutions which have and could provide necessary infrastructure. This of course will have to be done with due regard to the need for ensuring quality of such education and training. Some such things have started happening already, though in a limited manner, in banking, insurance and telecom sectors. Power sector may have to adapt these approaches suited to their own needs. Initiative for this may have to come from the leading power sector players and concerned authorities such as CEA, Power Ministry. Industry bodies like CII, FICCI etc. may also need to take pro-active measures.

  7. Similar initiatives would be required to take care of the needs of construction agencies as well. In fact, this problem is assuming greater proportion in these cases.