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Contents
Source: The post is based on the article “Make In India. Indians Need It” published in The Times of India on 5th April 2023.
Syllabus: GS 1 – Demographic Dividend
Relevance: measures needed to utilize India’s demographic dividend
News: The UN has projected that India would overtake China as the most populous country during April. This has led to debate over the benefits of high demographic dividend.
How can India utilize its demographic dividend?
India’s fertility rate has declined to replacement level last year. It has a median age of 28 years, significantly lower than 38 in the United States and 39 in China.
Hence, India can have the largest workforce in the world for at least the next 25 years. However, India can only materialize if it is able to generate jobs for the millions of youths.
According to the McKinsey Global Institute 2020 report, India needs to create at least 90 million new non-farm jobs to accommodate fresh entrants into the labor force by 2030.
Must Read: Reaping India’s demographic dividend
What is the present situation of unemployment in India?
According to the Centre for Monitoring the Indian Economy, the unemployment rate in March was 7.8%.
This is an underestimate because of the huge ‘disguised unemployment’. People who are involved in agriculture and other informal sectors on low wages are also counted as fully employed.
Further, the female labour force participation rate in India is not only low compared to other South Asian economies but is declining.
Moreover, it has become common in India for post graduates to apply for low-level government jobs. This highlights the quality of education and the problem of employment in India.
How can jobs be created and what are the challenges?
There is a misconception that the software industry as a service provider has been a big job creator. In reality, the large majority of jobs created in the services sector have been the low wage, low productivity type in the informal sector.
Further, there are views that India should focus on the services sector because the demand for services will grow as aging populations in rich countries will consume more services than goods.
However, along with skilling its labour force, India needs to focus on the growth of its manufacturing industry. It has the potential to meet the job challenge and create millions of jobs for youths.
In this regard, the government’s ‘Make in India’ campaign is the hope and expectation that India can replicate the China model of export to the rich world.
However, the development of robotics and machine learning are taking away jobs in the manufacturing sector and India is also looking for friend-shoring and reshoring of production.
Must Read: At the centre of job creation
What lies ahead?
India imports goods worth over $100 billion annually from China. If even half of this can be made at home by productivity improvement, it will mean millions of jobs.
Therefore, India should look forward to expand its manufacturing sector to reap the benefits of demographic dividend.
