The demand for security services is increasing due to rising urbanisation, the real and perceived risks of crime and terrorism, belief that public safety measures are insufficient, and the growth of a middle class with assets to protect and means to pay for supplementary security measures. The security service market is also supported by an improved economic environment and building construction activity.
The private security sector has emerged as a major industry by virtue of the employment of large manpower, both skilled and unskilled, to meet the burgeoning demands of the corporate sector. With national security assuming greater criticality and lower police to people ratio in the country, private security industry can act as extended arms of the law enforcement agencies. This will help relieve police forces from non-critical duties to focus on core areas.
With the anticipated growth of the industry, the employment opportunities are tremendous. Since, majority of the workforce employed is in the unorganized sector, the potential for skilling is evident. Current time requires private security personnel to multitask and use technology to perform security, safety and facilitation functions. Skill development, especially Recognition of Prior Learning (RPL), reskilling and upskilling are key issues, and therefore, investment in human capital is vital in preparing this industry to take on greater responsibilities.
The regulatory framework governing this industry also needs proper enforcement. Unorganized segment has largely remained unchecked and players usually skip adhering to mandatory compliance requirements, which creates a detrimental impact for all stakeholders including employees and clients. It is imperative for the governments to ensure strict enforcement of the regulations that will improve service delivery quality levels as well as work environment for the security personnel.
– DILIP CHENOY
Secretary General, FICCI
The Indian personal security market was estimated at INR 57,000 crore (USD 8.8 billion) in 2016 and is likely to touch INR 99,000 crore (USD 15.2 billion) by 2020, and INR 1.5 lakh crores (USD 23.1 billion) by 2022. Apart from revenue growth, the private security industry (PSI) is also evolving in its employment practices. Leading industry players are setting new standards by focusing on training and skill development of their people and customer satisfaction, establishing employee.
welfare funds, ensuring timely payment of salaries, and defining career progression paths for high-performing employees.
The Indian economy, as per the latest World Bank figures, is now the world’s 6th largest economy, and is expected to grow at 7.4% in 2018 and 7.8% in 2019. With the economy and businesses growing, security needs are also expanding, which is further necessitated by the ever-increasing security risks and related threat perceptions. Deployment of specialised personnel and systems to prevent and manage security risks and threats including accidents and incidents are vital for peaceful operations at a place. Therefore, the need for implementing security measures and systems at public places such as airports, railways and metro stations, shopping malls and markets, hotels and public utilities, as well as industrial complexes, commercial spaces, offices and residential blocks has risen multi-fold.
Indian Private Security Industry (PSI) has also expanded at a compounded annual growth rate (CAGR) of around 20% over the last decade by adding new players in the field as well as scaling their operational capabilities. In fact, private security in India is the 2nd largest sector, after agriculture, in terms of employment, with close to 9 million employees. Traditionally, it has been an unorganised sector with only around 40% of the market share with the organised players. However, the industry is progressing towards being organised as the consumer demand for security is gradually evolving from a mere guard to a professional and skilled guard, trained for movement of men and material, fire incidents, medical exigencies etc. Further, technology is progressively playing an ever-increasing role in the valueaddedd services being offered by the industry that include artificial intelligence, internet of things, hi-tech surveillance systems, biometric technologies, remote sensors, cyber security etc.
– CDR GAUTAM NANDA
Leader – Aerospace, Defence & Security Associate Partner – Government Advisory, BDO India LLP
The private security industry is amongst the largest employers in India, employing almost 8.9 million people, with the potential to employ 3.1 million more by 2022. The PSI also has a unique distinction of being the largest corporate tax contributor to the national exchequer.
As per a study by The Guardian, the global market in the year 2017 was USD 180 billion and is expected to be worth USD 240 billion by 2020. In contrast, the Indian private security industry (PSI) is expected to grow faster at about 20% CAGR owing to the changing landscape of the sector in India. However, there remains a shortfall of manpower of about 30% with a potential to generate a number of jobs for the rural and urban poor.
Workforce size of PSI is more than the combined strength of the Army, Navy, Air force and Police put together. With 8.9 million security guards and 1.9 million police officers, India has 5 times as many private security guards than police officers. The sanctioned strength of police personnel (civil and armed) in 2016 was just 2,464,484, which the employment in the PSI far exceeds.
The following table shows data derived from Forbes and Statista estimates, depicting the ratio of personnel employed in private security to that in police force in selected countries.
The figures show that India whilst topping the list, far exceeds other countries in terms of the divide between personnel employed in PSI and police force. Clearly, there is a vast potential for the large workforce in PSI to provide allied police services along with the law enforcement agencies to fill up the current gap. However, it would require an appropriate policy framework.
Some of the allied police services which are globally outsourced to private security are:
- Security of the outer periphery of prisons and transportation of prisoners.
- Senior citizen preventive security services.
- Street surveillance and video control room management.
- Assist police in handling emergencies and disasters.
- Background verification of employment applicants.
- Security management for events and festivals.
- First-level response to home security alarm activations.
- Delivery of summons, and chip-based tracking of the prisoners on parole.
Identification of different job roles under the PSARA, streamlining of recognition of prior learning, empowering of service providers to be a part of the training effort under PSARA administered by states, and ensuring quality of trainers, assessors and the training being imparted throughNSDC will further boost the growth of the industry by giving an identified progress path to the candidates seeking to make a career in this industry. With the highest growth being in the security industry compared to any other industry, GoI schemes to boost the skilling effort by way of provisioning of subsidies through schemes like PMKVY should be introduced.
The Private security industry can be broadly divided into 2 major segments – security services and allied services.
Security service industry
A major part of the security services industry is the manned guarding followed by cash and electronic security. Manned guarding accounts for nearly 75% of the industry followed by cash services management and electronic security services having nearly 20-25% share.
- Manned guarding: A major part of the security services industry is the manned guarding where they have the highest employment rate and the highest revenue share in the PSI. Key users of manned guarding services are IT/ ITES, retail, commercial, and manufacturing wherein 41% of the manned guarding services are utilised in the commercial sector and 39% in the residential sector. Further, 70% of the residential sector demands is coming from major cities like New Delhi, Chennai, Bangalore, Pune, Chandigarh, Lucknow, Ahmedabad and Jaipur.
- Cash management services: This is predominantly organised, with 7-8 players controlling 75-80% of the market share owing to high level of security concerns associated with operations in this area. The market is not yet mature as there are issues related to licensing of arms, and transfer of liability and insurance, which are making this segment a high risk and low return business. However, there has been an increase in demand for cash management services in view of expanding bank branch network, increase in number and spread of ATMs across the country, and growing use of debit cards.
The cash management services offered by PSI are: ² Cash replenishment services for ATM network of banks. ² Movement of cash and high value items within bank’s branch network. ² Cash pick-up and delivery for large corporate houses, retail outlets etc.
The Allied services aid the segments in provision of security services. It consists of Event Security Management and Security Guard Training.
- Event security management: Event security service providers employ unique command and control methodology enabling the client to focus on their event without worrying about security. Major activities under event security management are crowd control and VIP protection services. These services aid in security and emergency management planning also.
- Security guard training services: The introduction of the Private Security Agencies (Regulation) Act, 2005 has led private security agencies to adopt in-house training practices which are certified under PSARA by respective states. States have authorised the opening of training institutes recognised by them under PSARA. Sector skill council which is the authority on NOS/ QPs related to the subject, also has a number of training partners (TPs), who undertake the training; however, the trainees need to be certified by a PSARA certified training agency to be employed as a security guard. The training sector, due to PSARA not recognizing the training conducted by private TPs affiliated to sector skill council, is unorganised and fragmented.
Skill Development and Job Creation
Industry size & employment potential
Globally, and in India, manned guarding forms a major part of the private security service industry, constituting almost 75% of the private security services industry
The 8.9 million private security guards and supervisors are employed in more than 22,000 private security agencies (PSAs) in India, mostly managed and run by ex-servicemen as their resettlement projects.
Workforce is largely sourced from northern, central and eastern parts of India, with states like Bihar, Uttar Pradesh, Madhya Pradesh, Rajasthan and Assam contributing the maximum. Regions with significant population of ex-servicemen, paramilitary personnel and unemployed youth are biggest contributors.
Security guards constitute 90% of the private security industry workforce. They form the base of the pyramid with little or no relevant experience. The private security services industry is mainly unorganised and only 10% workforce is employed in the organised sector. With the anticipated growth potential of industry, the employment potential is evident. Further, considering that majority of the workforce is being employed in the unorganised sector, skilling potential is also evident.
National Skill Development Corporation (NSDC)
An industry with such a large size and employment potential, requires appropriate skilling to ensure job creation as well as presence of appropriately skilled manpower. The Security Sector Skills Development Council (SSSDC) under NSDC, till Jan 2018 before it got subsumed into Management Sector Skills Council, identified the following 8 job roles for the sector:
- Unarmed Security Guard
- Armed Security Guard
- Security Supervisor
- CCTV Supervisor
- Security Officer
- Personal Security Officer
- Assignment Manager
The training curricula and skills assessment frameworks were defined by the sector skills council under the aegis of the National Skill Development Corporation (NSDC) and accordingly, qualification packs (QPs)/ national occupation standards (NOS) were developed for the above mentioned job roles. The NOS provides scope of the job roles in addition to prescribing the performance criteria, technical/ domain knowledge required for the specific job role, as well
as core/ generic and professional skills for carrying out the activities. Sector skills council also provided programs for training of trainers as well as training of assessors, and had formulated a protocol on accreditation of assessment bodies and certification of trainees and trainers for PSI on a pan India basis. While the NOS describes the skilling requirements, there are no prescribed training standards or procedures provided by the sector skills council for each of the 8 identified job roles listed above.
Based on the inputs received from industry sources, the employers see the following skill gaps in the current workforce:
Training guidelines prescribed under the Private Security Agencies Regulation Act, 2005 (PSARA)
Under the Private Security Agencies Regulation Act, 2005 (PSARA), the trainees have to undergo training and be certified by training partners (TPs), recognised by the states (under the PSARA), and the security service providers are required to employ only the manpower so certified. Further, PSARA does not specify any standard guidelines required for training other than broadly stating the requirement and the need to conduct a 160 hrs training. In addition, PSARA does not specify any categories of security services other than provision of security using unarmed security guards, whereas in contrast, sector skills council under NSDC has specified 8 different job roles as required and being employed by the industry.
Recognition of Prior Learning (RPL) and Refresher Training
The existence of the security industry (and other industries) pre-dates the initiative to conduct skilling and training in an organised manner. Thus, there exists a large tranche of manpower which has been trained over a period of time and has learnt to carry out their trade while on job. For a system to suddenly shift to a certification-based acceptability of training acumen, it is but necessary for the existing trained manpower to be certified and to this effect Recognition of Prior Learning (RPL) was launched. The RPL looks at assessing the existing trained manpower on decided parameters and conforming certificates on them, thus bringing them to the mainstream of certified skilled force.
Recognition of Prior Learning (RPL) scheme was first launched as a component under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 2015-16 with a budget of INR 1,500 crore to train 24 lakh people, including 14 lakh fresh trainees and skilling of the remaining under the RPL program. Following the first phase of the scheme and its review, the PMKVY 2.0 was launched with a budget of INR 12,000 crore to skill 10 million youth by 2020 of these 60 lakh were to be provided fresh training and 40 lakh were to be certified for the RPL program. Currently, RPL has certified about 4.8 lakh people covering 458 districts across India till date, the candidates have been enrolled, assessed and certified in 185 job roles across 30 sectors.
In addition, the industry feels that the level of understanding of trainees is lower and therefore, recognises the need for refresher training on regular basis. However, since guards are reluctant to bear the cost of training, the same has to be borne by the service provider which proves to be a substantial increase in cost. This coupled with the high attrition rate also impacts the management’s capability for having training sessions. Another issue which compounds the conduct of refresher training on a regular basis is the inability to relieve the guards from their place of duty for undertaking the same.
Impetus to aid and streamline skilling
The gaps in the skilling proficiency required by the industry/ clients and the training requirements as identified under PSARA are evident, and these need to be addressed to make the sector more viable and regulated. Despite 25% growth in the sector and the massive requirement of manpower, the industry reels under ambiguity of admissible training certificates as well as requirement of different categories of trained manpower. There is an incremental human resource requirement of 3.1 million for the period 2017-2022. Off late the GoI impetus on skilling of unarmed security guards has declined as no fresh allocation of training numbers has been provided by the GoI for conduct of training and provision of subsidy to the trainees for undertaking the training. The GoI needs to increase the support to the industry to boost the availability of trained manpower. Also, amendments to the PSARA to identify more categories of security services inclusive of armed security guards, as well as streamlining of methodology of certification of training being provided will go a long way in reducing the gap in skilling required for job roles needed by the industry to meet the customer requirement. Further, the formalisation of methodology (acceptance of training carried out by private TPs affiliated to NSDC and not recognized under PSARA) will go a long way in standardising the norms and identification/ acceptance of training certification on a pan India level and make the process more amenable to the industry.
Maintaining the quality of training imparted
The curriculum, standards of training required to be met, as well as the infrastructure standards to be maintained by a training center, and the certification of trainers and assessors may be regulated by the NSDC through sector skills council. The training may be conducted by TPs identified and recognised by states under PSARA. The states may institute an annual certification of the TPs with the certification team comprising of members from sector skills council/ NSDC. NSDC/ sector skills council may also be mandated to undertake surprise checks of TPs to ascertain the quality of training being imparted by the registered TPs. To make use of existing infrastructure and meet the training requirement it is further possible to allow service providers having more than 1000 guards to establish in house training institutes. Standard operating procedures (SOPs) should be framed for the job roles to bring consistency in training processes akin to what MHA is currently reported to be working on developing SOP guidelines for the PSAs engaged in cash handling and transportation.
Boost to Recognition of Prior Learning (RPL)
The dismal state of Recognition of Prior Learning carried out to date is evident from the figures mentioned earlier. RPL needs to be implemented with greater vigour so as to bring the available skilled manpower into the mainstream. Allowing service providers, employing more than 1000 guards, to establish training institutes and empowering them to undertake RPL will ensure faster assimilation of the skilled ‘uncertified’ manpower into the mainstream. It will also provide hope to the existing manpower of employability pan India and stop misutilisation of manpower, if any. It will also enable the unorganised sector to come into the fold of the organised sector.
The employed numbers in PSI are large, further the employable population of India is set to rise with India becoming the youngest country, having the maximum number of its citizens with an average age of 29 by 2020. Compared to this, world over, countries are facing shortage of manpower. If we align our curriculum and training to international standards and requirements as well as provide international certification, duly recognised in targeted countries (for employment), we will be able to provide for job creation which is an essential requirement of the country.
Policy issues concerning private security industry
The private security industry in India is governed by various regulations, the most relevant being the Private Security Agencies Regulation Act (PSARA), 2005 formulated by the Ministry of Home Affairs (MHA), GoI. The Act regulates the eligibility criteria for operating a security agency as well as prescribes training requirements for security guards. Additionally, PSARA also prescribes various compliance requirements for the security agencies e.g., verification of employees, affidavit for compliance with FDI policy where applicable, maintaining statutory registers, commencement of activities etc. Apart from the PSARA some other (indicative) regulations applicable to PSI are the Arms Act 1959, FDI Policy, the Minimum Wages Act 1948, the Provident Fund Act 1952, the Employee State Insurance Act 1948, the Payment of Bonus Act 1965, and the Payment of Gratuity Act 1972.
The current scenario in terms of policy and regulations affecting the PSI are discussed below:
Overlapping Federal and State regulations
The major concern for the security industry from policy perspective is that it is subject to an overlapping set of federal and state regulations, leading to multiplicity of registrations to conduct business. The PSARA has given the discretion to each state to formulate their rules for implementing the Act. PSARA was brought into effect from 15 March 2006. Due to separate rules in each state, there is a disparity in the processes for grant of licenses etc, despite the details required to be captured majorly remaining the same.
This heterogeneous system acts as a barrier for PSAs in providing integrated professional services on a pan-India basis. Distinct enforcement often leads to disruption of services to clients, impacting the overall growth potential of the industry. The prevailing regulatory issues in the sector adversely stunt the ability of the industry to organise itself in a professional manner, and raise service delivery and compliance standards. Therefore, it is critical that a single window licensing system is created as a combination of central/ state level registration, depending on factors such as the size, scale/ area of operations, employment conditions/ terms, past experience and the like for the PSA.
Mandatory police verification
Requirement of mandatory police verification for directors of the company and processing time for such applications differ in most states. Moreover, the conduct of police verification of each security guard is also mandatorily to be conducted by the security agency hiring them. The processes involved are tedious and timely rendition of police verification happens rarely, which puts the PSAs in a quandary as regard to employment/ deploying of guards.
Recently, the MHA issued advisory to all states/ UTs and advised them to utilize Crime and Criminal Tracking Network and Systems (CCTNS) database for conducting verification of antecedents for the purpose of issue/ renewal of licenses to PSAs. This is a welcome move and if diligently followed by States/ UTs it will help in expediting the application process and overcoming delays.
Changes in FDI limit
I n 2016, the Department of Industrial Policy and Promotion (DIPP) allowed for 49% FDI via the automatic route and up to 74% via the approval route for PSAs in India. However, the changes in FDI Policy were not followed by suitable amendments in the PSARA. As per the relevant provisions of PSARA, an Indian should be holding a majority stake in the company, which directly contradicts the revised FDI guidelines permitting upto 74% FDI under approval route for PSAs. Therefore, it is necessary to align the PSARA with the extant provisions of the FDI Policy.
Challenges pertaining to the Arms Act, 1959
The PSARA does not contemplate provision of armed security as a service. In addition, the current framework of the Indian Arms Act, 1959 only allows individual applicants to hold arms licenses. As a result, private security agencies have been technically compelled to employ people who hold arms license in individual capacity. The firearms issued to individuals also have restrictions in terms of territories in which they can be used. This severely curtails the ability to pool armed guards in an efficient manner to service clients and can be particularly difficult in case of interstate transfer of goods/ personnel. The central government has provided some exemptions to certain clauses of the Arms Act to enable companies, banks, industrial or other establishments to obtain licenses in the name of legal entity rather than obtaining it in the name of individuals. Thus, there is a need for an amendment in this regard facilitating the ease of use of armed guards by the security service providers.
Re-categorisation of Private security workers as Skilled/ Highly skilled
I n January 2017, vide a Gazette Notification, workers in the private security have been re-categorised under the Minimum Wages Act, along with modification in the daily pay. Security guards without arms have been re-categorised as ‘skilled’ and security guards with arms and security supervisors have been re-categorised as ‘highly skilled.’
The Central government has also revised the minimum wage payable to employees of the ‘Watch and Ward’ sector to Rs.673 with Rs.637 as the basic wage and Rs.36 as variable dearness allowance (VDA) per day for areas under category ‘A’ as listed in the notification, Rs.612 per day (Rs.573 as basic wage + Rs.33 VDA) for areas under category ‘B,’ and Rs.522 per day (Rs.494 basic wage + Rs.28 VDA) for areas under category ‘C.’
While the rates prescribed by Centre are mentioned above, each state, vide Labour Department notifications, issues its own minimum wage rates. The table below is an illustrative example of current minimum wages per month prescribed by some States for the period of April 2018:
From a practical view point, the disparity in wages leads to issues relating to shortage of supply of manpower in states with lesser rates. As an example, a worker in skilled category in Delhi may not be willing to take up employment in the NCR region, say Gurugram, where prevalent Haryana rates differ substantially vis-à-vis the rates prescribed for Delhi. To add to it some states are yet to establish security guards as skilled labourers. These states continue to consider security guards as semi-skilled or unskilled labourers, further creating disparity in the file and rank of manpower employed in the sector. In addition, this creates a situations of exploitation and a feeling of helplessness and incredulity in the employees (security guards).
Bridging the gap
- To provide a single window system to streamline the registration process, an amendment to the PSARA may be considered for specifying the categories of PSAs that can provide services throughout India based on central registration, and other PSAs that need to obtain state level registration. The actual enforcement of the Act can also be segregated between central/ state-level authorities accordingly. This would not only reduce enforcement time but also allow national level integration to effectively monitor and plan for the private security industry.
- PSARA has an inclusive definition of ‘private security’ i.e., the business of providing private security services including armored car service, private security guards etc. Similarly, ‘Private security agency’ (PSA) is defined as a person or body of persons other than a government agency, department or organisation engaged in the business of providing private security services, including training to private security guards or their supervisor or providing private security guards to any industrial or business undertaking or a company or any other person or property. The scope of private security under PSARA is broad and does not prescribe an objective test to determine the activities that are sought to be regulated.
- There is no clarity on whether PSARA applies to specific activities, which has resulted in ambiguity as to what constitutes private security. With the provision of private security becoming increasingly mechanised owing to constant innovation in technology, it has become an urgent need to amend the PSARA to bring clarityto the industry, with the inclusion as regard to the use of armed security guards and other security related services offered.
- Each state has its own rules for the grant of license and mandatory conditions for the same. One of the conditions is the verification of antecedents of the applicants. On receipt of such request for verification in prescribed form (as per state rules), the Controlling Authority of the State forwards it to the Deputy Commissioner of Police of the concerned police district where the agency intends to commence its activities and for verification of particulars of the applicant which is time consuming. To ease the same, the states may consider implementation of an online process which would make the verification faster, easier and more accountable. Crime and Criminal Tracking Network and Systems (CCTNS) could be used for implementation of the same as per the advisory issued to all states/ UTs by the MHA.
- Online process for the conduct of police verification should also be incorporated for security guards. Moreover the police verification should be made time bound, such that post a certain given number of days, after rendering of application for conduct of police verification, in case of no receipt of reply from the authorities, police verification should be considered as being completed and accorded. This would make the system more streamlined and remove ambiguity from the process and save time. With the Crime and Criminal Tracking Network and Systems (CCTNS) this would be easily implementable also
- The issue regarding trained personnel being employed in other states has been impacting the employment of personnel inter-state. In this regard, MHA vide clarification dated January 11, 2018 clarified that the certificates issued to trained guards in one state should be accepted by other states as there are no restrictions in PSARA for the same. States should be given suitable direction to implement the same.
- Regulatory impediments, especially lack of clarity and ambiguities in the laws and regulations relating to FDI into India makes attempts at liberalisation counterproductive. In its bid to attract more foreign investment and enhance the ease of doing business in India, legislative action in removing ambiguities in the regulatory framework is imperative. It will be beneficial if the various governmental agencies coordinate between themselves effectively to ensure simultaneous amendments in legislations prior to liberalisations being rolled out. Such initiatives will ensure effective implementation of policies and contribute towards making ‘ease of doing business’ in India a reality. It is proposed that a suitable amendment be made in the Arms Act so as to allow the licensed PSAs to procure and store arms subject to prescribed compliance and audit requirements.
- The states should also frame regulations for mandating employers to pay minimum wages to the personnel. For example, the Department of Law, Justice and Legislative Affairs of the Delhi government has issued a notification, making it mandatory for employers to pay remuneration either electronically or through cheques, except in some special circumstances. The President gave assent to Delhi government’s proposed amendment under the Minimum Wages Act under which employers violating labour rules in the city will face fine ranging from INR 20,000-50,000, and jail term between 1 to 3 years. Similar notifications with penalties may also be enforced in other states. It would, thus, take up the will and intention on the part of employers and the legislators to strengthen the legislation and to ensure that the standards for minimum wages are adhered to in salaries of private security guards. A step in that direction would be to align the minimum wages to each tier of cities rather than leave it for states to decide for the whole state. Further the Central Government needs to impress upon states to standardise the categorisation of security guards as skilled workers.
- Recently, MHA has created a new division to address issues related to security of women comprehensively. On the same lines, it is recommended that MHA should also create a separate division relating to private security so as to help administer the issue related to the industry in a faster manner. Further, uniformity in the ranks/ stature of all the state controlling authorities across India, as against the existing different levels of offices dealing with the PSARA, would also go a long way in streamlining the associated processes across the country.