If you live in cities, you might have had more encounters with a private security guard than a police officer. Their ubiquitous presence is more or less taken for granted, especially in industrial areas, public instalments and office spaces.

With 7 million security guards and 1.4 million police officers, India has five times as many private security guards than police officers. This disparity is highest in the world. The private security guard-to-police officer ratio is second highest in the world for South Africa at 2.5. China has five million private security guards compared to 2.7 million police officers.

Source: Statista

The study done by The Guardian shows that half of the world population lives in countries where there are more private security workers than police officers. Globally, the market is USD 180 billion now and is expected to be USD 240 billion by 2020.

Private security industry in India: Market and Jobs

A FICCI and Grant Thronton report counts low police to citizen ratio (1:720 against the UN advised 1:450), high global terrorism index (7.86 out of maximum 10), increase in crime rate, increase in the number of public events, increase in the number of ATMs resulting in higher volume of cash logistics, infrastructure related crimes and urbanisation of the economy as reasons for such high demand for private security services.

There is one more startling fact about policing in India which further feed to the demand. In a police deprived country, for every VIP there are three policemen deputed for his or her security. According to Bureau of Police Research and Development data, 56,944 policemen and women have been deployed just for the safety of 20,828 VIPs.

Graph showing increase in property-related crimes over one year. This is indicative and may or may not reflect the current situation.

Government policies like making guards in schools and ATMs mandatory and instalment of CCTV cameras at various locations have resulted in accelerating the demand. For example, a back of the envelope calculation shows that there are around 15 lakh education institutions in India and the mandatory 3 security guards on a 24-hour basis only translate into 45 lakh new jobs.

During the first decade of 21st century, the sector was relatively unaffected by the economic slowdown which grew rapidly at CAGR of 25 percent. It picked up even more and the Indian security industry was Rs 400 billion in 2014. It is expected to reach Rs 800 billion by the year 2020—doubling in six years.

The private security industry forms a lucrative option for unskilled workers to get employment. The number of people employed in the sector "is expected to rise manifold as the size of the industry increases," says Rahul Kapur of Grant Thornton India LLP.

According to estimates, by 2020, five million new jobs will be created in the security service sector—again, almost doubling in six years.

With almost 80 percent share, manned guarding is the largest component of the private security services. The rest is guards employed in cash logistic services.

However, one major point of worry is that a large chunk of all the guards employed is in the unorganised sector, hence are bereft of EPF, ESI and other employee-related schemes.

Some of the major firms active in India are Peregrine (55,000 employees), Securitas (35,000 employees), G4S (130,000 employees), SIS (96,000 employees) and Tops (130,000 employees). All these five companies collectively generate a revenue of Rs 22.12 billion. In fact, SIS, Securitas and Peregrine have registered the highest growth of more than 30 percent in the last five years.

The rapid growth has made sure that the wages have also grown in tandem. “Growth in manned guarding industry is driven by growth in the number of guards, as well as an increase in revenue per guard. Revenue per guard is usually linked to minimum wage rates as determined by various states on an occasional basis and is linked to inflation. There has been around 15 percent increase in minimum wages over the last two years,” says another FICCI report published in 2012-13.

With hundreds of smart cities coming up, an increased concern for private security and Indian economy on a high growth trajectory, the demand is set to increase which justifies the lofty projections laid out by the reports.