A report released by the Confederation of Indian Industries (CII) stated that the demographic dividend of India will turn into a liability if the economy cannot produce enough jobs required for the growing workforce. India is expected to add another 183 million to the working age group of 15-64 years between 2020-2050 as per UN Population Statistics database.
Demographic Dividend is defined as the economic growth potential that can result from shifts in the population age structure, i.e., when the share of the working age population is larger than the non-working age population.
Thus, with a whopping 22% of the incremental workforce over the next 3 decades in India, the job ecosystem is not sufficient to sustain the economic growth. Although investment, reforms and infrastructure are likely drivers of economic growth, no growth driver is as certain as the availability of people in the working age group. India’s demographic dividend lends it the potential to become a global production hub for large consumer goods & services.
However, it is a worrying fact that India’s demographic dividend will start declining in the decade post 2050. Thus, 2020-50 provides a narrow window of opportunity for India to harness its demographic potential.
High quality school education, relevant higher education and skill development aligned to industry needs are the pre-requisites if India is to become an economic powerhouse which not only creates good quality jobs for its youth, but also services for the world. Due to continuing drop-outs from schools and pandemic related disruptions, there has been a resultant learning losses, which must be bridged in a mission-mode campaign.
India hosts many labor market imbalances and the knowledge-skill mismatch impacts the productivity growth, which is critical for India to enhance its long-term growth. In 2019-20, only 73 million of India’s 542 million strong workforce received any form of vocational training. In the global context, compared to the 24% in China, 52% in USA, 68% in UK and 80% in Japan, India has a paltry share of 3%. Also, unemployment is at a 45 year high.
To overcome such challenges the youths may be offered skill vouchers and scholarships linked to the National Skills Qualification Framework. This can create an industry-ready model, leading to transformation from supply-based to demand-based skill system. The government should also consider setting up multi-skill training institutes in MSME clusters to impart skill based on local demands.
In addition to government initiatives, corporate investment in employee education and training should continue to play a critical role to meet the demand for high-skilled workforce. Thus, greater government-industry collaboration holds the key for skilling the burgeoning workforce of India.
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