Caste-based Disparities in IT Sector

India's IT sector, a significant contributor to the country's economy, is often regarded as a model of meritocracy and inclusivity. However, recent analysis reveals persistent caste and gender-based inequalities in employment and wages, contradicting the sector's inclusive image.

Table of Contents

The study utilized data from two NSSO surveys: the 78th round (2020-21) and the 68th round (2011-12), encompassing a sample of 29,289 individuals. The analysis controlled for observable factors affecting employment outcomes and used public sector industries as a benchmark for probability estimation.

Facts

Contributes over 7% to India’s GDP.
Serves as a preferred career destination due to its performance-driven, high-paying nature.
Sub-Saharan African countries view India’s IT sector as a model for replicating success in software exports.

Findings Of Recent Analysis

Employment Probabilities

Probability of SC and ST employment in IT is 10%, compared to 27% for upper castes.
Disparities increased over time:
- 2011-12: Lower castes had a 6% probability of IT sector employment compared to 17% for upper castes (deficit of 11%).
- 2020-21: Probabilities rose to 10% and 27%, but the deficit widened to 17%.
Indicates that the IT sector, despite growth, fails to address exclusionary social barriers.

Wage Disparities

SC and OBC workers in IT earn 9% and 22.5% less than upper caste workers, respectively.
Wage differentials persist even after adjusting for education and employment type (regular vs. temporary).
Reflects labour market segmentation, relegating lower castes to low-paying job roles with limited mobility.

Gender Inequalities: Women in IT earn 2% less than men, regardless of caste.
- Employment probabilities for women are closer to those of men, but wage disparities highlight systemic gender bias.

Implications of Inequalities

Economic Efficiency: Exclusion of marginalised groups undermines productivity and efficiency.
Social Justice: Labour market segmentation reinforces structural barriers and hinders upward mobility.
Missed Opportunities for Diversity:
- International Labour Organization (2022): Workplace diversity correlates with higher productivity and innovation.
- Network for Business Sustainability (Canada): A 1% increase in racial diversity boosts productivity gains by $729-$1,590 per worker annually.
Vicious Cycle of Poverty: Marginalised groups, discouraged by unequal returns on education and skills, are trapped in poverty.

Policy Recommendations

Workforce Diversity Disclosure: Mandate companies to publicly share their workforce diversity matrix.
- Increase transparency to promote accountability and encourage diversity.
Support for Lower-Caste Entrepreneurs: Provide incentives and training to foster entrepreneurship in high-productivity sectors.
Bridging the Skill Gap: Implement targeted programs to enhance the skill levels of marginalised groups, enabling equitable job market participation