He warns that if the country doesn’t create enough jobs, its demographic dividend could become a liability
He warns that if the country doesn’t create enough jobs, its demographic dividend could become a liability
India’s gross domestic product (GDP) can grow from the current US$3 trillion to US$9 trillion by 2030 and US$40 trillion by 2047 if the country’s working-age population – which is expected to increase between 2020 and 2030 by will increase beyond 100 million people – growing productively employed, according to a report by the Confederation of Indian Industry (CII).
The report also warned that if India does not create enough jobs and its workers are not adequately prepared for those jobs, its demographic dividend could become a liability. This can only be achieved in the long term through changes in the political framework for education and human resource management.
“As the labor market is geared towards high-skilled workers, creating jobs for low-skilled workers who would continue to dominate the workforce will challenge India,” it said.
In 2020, there were approximately 900 million people (67% of the total population) in India in the working age group of 15-64, which is expected to increase by another 100 million by 2030, despite a declining trend in fertility rates. This implies that a whopping 24.3% of the world’s new labor force will come from India over the next decade, the report said.
‘Golden Period’
“The golden period of 30 years between 2020 and 2050, when our working-age population will be bulging, can be an important horizontal enabler to spur growth even as the developed world, including China, ages,” it said Report.
The report adds that India has seen increasing literacy rates over the years, but the level of vocational education/skills is low, reflected in the high unemployment rate among the educated. “Closing the skill gaps of its skilled workforce will be crucial as India depends more on human capital than its peer countries with a similar level of economic development,” it said, adding that upskilling and reskilling require a coordinated government response. Industry, academia, even as COVID continues to cause structural changes in the workplace.
“The reversal of India’s structural change back to agriculture is a sign of a relapse into subsistence employment. Improved safety nets through PM-KISAN and MGNREGA will be critical investments needed to ensure smallholder and marginal farmers’ incomes are protected and their basic needs met… But manufacturing and services will still need to be the two main drivers of growth going forward, ” it said.
