This article is part of the series — World Population Day.
The United Nations Population Fund describes demographic dividend as the potential for substantial national economic payoff in a period in which the
working-age population is healthy, educated, and gainfully employed, with a low proportion of young dependents. India is said to have entered into 37 years, lasting from 2018 to 2055, due to a declining dependency ratio (see Figure 1).
Figure 1: Duration of demographic dividend in large economies (economictimes.indiatimes.com).
India’s population pyramid reveals that over two-thirds of the population is of working age, with the
elderly comprising less than 7 percent (see Figure 2). And while all may appear hunky-dory, the youth unemployment scenario paints a grim picture.
Figure 2: India’s population pyramid in 2022 (population-pyramid.net).
With the youth unemployment rate increasing every year since 2005, all the way from 18 percent to 23 percent in 2019 (see Figure 3),
India’s population is frustrated. It is also worth noting that the youth unemployment rate has been far more than the overall unemployment rate over the entire period of reference, with the latter spiking above
7 percent in the COVID-19 pandemic-affected 2020 compared to 5 percent in 2019, implying that the burden of joblessness is borne disproportionately by the country’s youth.
Governmental efforts toward generating gainful employment are certainly not helped by the prevalence of illiteracy and malnutrition amongst the youth.
A major proportion of the unemployed is illiterate, which renders them poor and deems them unable to earn enough to educate themselves, thereby, creating a vicious circle. On the other hand, a
2019 report by UNICEF and NITI Aayog identifies over half of Indian adolescents (about 6.3 lakh girls and 8.1 lakh boys) aged 10–19 years as being thin, short, overweight, or obese.
Figure 3: The youth.
Then there is the issue of upskilling the nation’s youth, to render them employable. The government’s ‘Skill India’ initiative marks a major step in this direction, with courses targeting employability in sectors including information and communications technology (ICT), electronics, BFSI, and agriculture. Further encouraging the ambitious campaign which aims to provide job-relevant skills to more than 40 crore youth by the end of this year, a major Noida-based mobile handset manufacturing company named
Lava International has hired 260 ITI Berhampur students last month.
However, the government’s endeavour to significantly increase manufacturing jobs is likely to face severe challenges due to the extent of bureaucratic red tape that prevails in the country. A plethora of large MNCs curbing their India operations provides a case in point.
German retailer Metro AG, Swiss construction-materials firm Holcim, US automaker Ford, UK’s Royal Bank of Scotland, US bikemaker Harley-Davidson and US banking giant Citibank have all discontinued or downsized their operations in India in recent years, with regulatory unpredictability, dissuasive tariffs, red tape, confusing land policies, etc., among the decisive reasons in many such cases.
It is, in fact, especially because of the intangible difficulties encountered in establishing and running brick-and-mortar businesses in India, that the country has largely failed to ever establish itself as a global manufacturing destination since independence despite the availability of low-cost labour. Even the New Economic Policy of 1990–91, with its focus on liberalisation, privatisation, and globalisation, failed to spur the Indian economy’s secondary sector. It comes as no wonder then that manufacturing contributes only about a sixth of India’s GDP, despite India being the
fastest-growing large economy.
Even the New Economic Policy of 1990–91, with its focus on liberalisation, privatisation, and globalisation, failed to spur the Indian economy’s secondary sector.
Notably, much of
India’s growth over the past few decades has been driven by a massive expansion of its services sector, which is nowhere quite as labour-intensive as its manufacturing counterpart. Consequently, the nation has since witnessed large periods of so-called
jobless growth, which is often not captured in official unemployment statistics which only capture chronic unemployment.
While the ‘Skill India’ programme is commendable in addressing the demand side of the labour market by gearing youth toward meaningful employment in various sectors by upskilling and training them appropriately, India must commit on this World Population Day to do more to tackle the widespread malnourishment prevalent in Indian children and adolescents.
The mid-day meal scheme (MDMS), which was discontinued in schools and Anganwadis for over two years in most parts of the country due to the ongoing pandemic, has thankfully been or is close to being restarted in most of the participating states. However, complete normalisation is yet to be seen. Moreover, issues relating to procurement have often plagued the MDMS, with provision for Anganwadis having been repeatedly hindered or thwarted by ill-conceived efforts at central procurement and the associated corruption.
On the supply side, while land and labour reforms remain political hot potatoes for any government, the importance of removing bureaucratic red tape in reaping the benefits of India’s favourable demography cannot be overstated. It must also be appreciated that returns from regulatory shock therapy are subject to rapidly diminishing returns, and a predictable policy architecture is imperative for attracting private investments.
The views expressed are personal.
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