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As per the CIA World Factbook, the median age in India is 26.5 years. Nearly 65% of the country's 1.2 billion plus population falls within the age of 15 to 64. The younger lot - aged 0 to 14 - makes up about 30% of the population, while the elders form the balance. With the over 65 years aged population forming about 5% of the total population, India can be termed as a young nation. The country's population is growing at a pace of about 1.3%. A large, young working population is one of key factor that is driving India's consumption story and therefore the country's growth levels. However, there are reports with a view that while the nation has witnessed strong growth levels over the past decade - especially when compared to the world average growth levels - the employment figures have not really moved up.
And with India churning out more and more of the 'employable workforce' year after another, and with not enough jobs to absorb the same, the country seems to be heading for an employment crisis. Putting it in numbers, the Financial Times reported that about 10 m jobs are needed annually to absorb new entrants to the labour force. As per estimates of the Federation of Indian Chambers of Commerce and Industry, India's working-age population is set to rise from 749 m to 962 m by 2030.
Also adding to the woes (in current times) is the slowing down the of export reliant businesses, which over the past few years, have either shut shop or down-sized significantly. Plus, with the overall growth rates and investments slowing down coupled with the uncertain outlook, employers are just not hiring.
As reported by the Financial Times, many economists believe that a key reason behind the labour crisis is the demand itself. With Indian companies being well aware of the labour laws - which are tilted in favour of the workers, employers are simply not hiring them on a fulltime basis.
On the other hand, the supply side seems to be hampered by the poor quality of education and training. This leads to lower supply of skilled workers for the service and high technology industries. As mentioned by the management of HCL Technologies, a minimum of six months is needed to be spent on training a student to make him employable.
A long term solution for the above abovementioned issues are obvious - investment towards improving education and an overhaul of the labour laws, the latter being a touchy topic from a political perspective. But if one does take a long term outlook - that of the country seeing a 200 m increase in the workforce over the next two decades, then some definitive action needs to be taken. Reforms in the labour laws seem to be the answer.