The demand for private security services is fueled by increasing rate of terrorism acts, crime, fast urbanization, improving foreign investment activity and growing middle class owning assets they wish to protect
New Delhi : The global demand for private security services is likely to increase by 7.4 percent annually and to reach US$ 244 billion ( Rs. 15.86 lakh crore) in 2016.
It is expected that security industry segment will rapidly grow in the developing parts of Asia, Eastern Europe, Africa and the Middle East, where security markets are relatively underdeveloped, according to a report by FICCI and Grant Thornton on Private Security Services in India.
The report, released here on Wednesday, said that several developing economies including China, India, Mexico, Russia and South Africa are expected to achieve double digit growth through the year 2016 in private security sector.
With the growth of Indian economy in last two decades and increased terror threat perceptions, the need for security has grown manifold.
There is a need to safeguard large scale infrastructure projects, industrial complexes, big /small offices, IT parks, metro stations, malls, airports, sports facilities and education institutions.
Private security service plays highly significant role to protect property and public life. With fast urbanization in tier II and tier III cities also, there is a significantly incremental demand for private security services now.
The sector is among the fastest growing ones and with the growth of urbanisation in the country and the changes in the perception of security by governments, business houses and citizens, this industry is poised to register a substantial CAGR in the near future. Particularly important is the Government’s focus on development of Smart Cities in the country and the need of more security personnel, the report noted.
Currently the security services industry provides jobs to nearly 7 million people in India. With a 20 percent growth rate at present, Indian security service business size is expected to increase from Rs. 40,000 crore in 2014 to the level of Rs. 80,000 crore by 2020. It is also estimated that the Indian private security industry will generate about 50 lakh additional jobs by 2020.
The demand for private security services is fueled by the increasing rate of terrorism acts, crime, fast urbanization, improving foreign investment activity and growing middle class owning assets they wish to protect. In the year 2014, only 35 percent of the industry was organised which is expected to reach at 50 percent level in next five years.
The industry also faces manifold challenges including issues related to the Private Security Agencies (Regulation) Act 2005 which the states implement as per their requirements, based on state-specific guidelines, compliance requirements and labour laws, ownership and management restrictions and workmen related problems.
FICCI, Secretary General, Dr. A Didar Singh said the sector has the potential of becoming the second-largest employment generator in the country and a major source of revenue for the exchequer.
