India’s Gross Domestic Product (GDP) can grow from the current $3 trillion to $9 trillion by 2030, and $40 trillion by 2047, if the country’s working-age population — which is expected to increase by over 100 million people between 2020-30, is productively employed, according to a report by the Confederation of Indian Industry (CII).
The report also cautioned that if India does not create enough jobs and its workers are not adequately prepared for those jobs, its demographic dividend may turn into a liability. This, it added, can be done on a sustained basis only with changes in its policy frameworks for education and workforce management.
“Since the job market is biased towards high-skill labour, the creation of jobs for low-skill labour, who would continue to dominate its workforce, will challenge India,” it said.
In 2020, there were about 900 million people (67% of total population) in the working age group of 15-64 in India, which is expected to expand by another 100 million by 2030, despite a declining trend in fertility rate. This implies that a whopping 24.3% of the incremental global workforce over the next decade will come from India, the report states.
‘Golden period’ “The golden period of 30 years between 2020-50 where our working age population will bulge can be an important horizontal enabler to bolster growth, even as the developed world including China ages,” the report notes. The report adds that over the years, India has experienced rising literacy rates, but level of vocational training/skilling is low, which gets reflected in the high unemployment rate among the educated. “Closing the skill gaps of its qualified workforce will be critical, as India depends more on human capital than its peer countries that have a similar level of economic development,” it said, adding that skilling and reskilling require a coordinated response from the government, industry, academia even as COVID continues to cause structural changes to the workplace.
“The reversal in India’s structural transformation back toward agriculture is a sign of fall back to subsistence employment. Enhanced safety nets through PM-KISAN and the MGNREGA will be critical investments needed to ensure that incomes of small and marginal farmers are protected and their basic needs are met… But manufacturing and services will still have to be the two key growth engines going forward,” it said.
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