Mumbai: Financial services accounted for 9.7 per cent of India''s GDP in 2005-06, which was 1.2 per cent more than the share of financial services in the GDP of the UK, global consulting firm KPMG says in its latest study.

India has also outpaced the UK in hiring financial service professionals, with hiring in the sector crossing 5,000 people in 2006, despite a severe crunch of appropriate skills required, the report said.

Despite, increase in the recruitment figures, the report indicates that 58 per cent of the Indian organisations experience difficulties in recruiting the right people with the right skills. This is mainly because, most Indian companies hire people directly for sales operations as opposed to the backend work, where the chances of learning on the job skills are higher. This recruitment pattern, therefore, calls for the education institutions in India to improve their job related skills, it said.

"During 2006, recruitment activity in India was higher than in the UK, with many of the participating organisations recruiting over 5,000 employees, including both graduates and experienced hires," the KPMG report released in association with the UK-India education and research initiative (Ukieri) said.

India, with one of the world''s largest labour pools, however, is experiencing high competition and low supply versus low availability of appropriate skills as a serious constraint on the organisations, the report revealed.

The report titled ''Global Skills for Graduates in Financial Services'' has been launched to encourage quality training within graduate professionals.

Financial services organizations both in India and the UK that operate on a global basis are increasingly using competency frameworks during their recruitment practices, which are tailored locally to reflect the market they are recruiting in, the report said.

"The recruitment of the right talent into the financial services industry is a big issue in cities like London and Mumbai. Our report shows that graduates gain theoretical knowledge, but lack practical job related skills," KPMG UK chairman new and emerging markets Ian Gomes said.

There is a ''soft skills gap'', which needs immediate attention. The findings of our report would be used to inform joint curriculum projects in the UK and India to help institutions address this issue, he added.