India is home to the second largest population base in the world. And one important feature of this large population is that India has highest youth population in the world and this number is also steadily growing. Around 65% of the 1.2 bn people in India are below the age of 35 years. This huge population in India has been important driving growth factor so far for the country. But is having a huge labour force alone good enough? Certainly No!
An article in Mint, states that India's future GDP growth in very much dependent on the skill training of the youth mass. The GDP levels have potential to increase by 3% in the year 2035, if India improves on skill training.
This indicates if the youth are not productively channelized, the economic growth might get stagnated. Thus, skill training is very important else there can be a worrying situation where high unemployment is accompanied by shortage of skilled labour. This can further have adverse socio-political consequences.
The government of India, in the past have come out with some schemes to generate more skilled people. At the face of it, this looks to be an important development. But the most critical aspect is implementation. This is where the government has not much to boast about. Also, such big schemes are often the breeding grounds for corruption.
Other than this, we believe there is one more challenge. While skills are a necessary for being fit for a job, they don't create jobs by themselves.
Thus for Indian government generating skilled youths is not the only challenge. At the same time there is an equal need to create adequate opportunities to employ this skilled youth. Generating skilful youth alone cannot drive GDP growth.
We believe India has potential to generate more skilled youths in the labour force. But so far very little seems to have happened on this front. As said, the government also needs to create enough avenues which could offer better jobs to this skilled workforce.
The election result will be soon out and we would thus like to wait and see what attempts the new government puts to generate skilled workforce and at the same time better opportunities. Indian policymakers really need to find a way to unlock the so-called demographic dividend before it starts becoming a huge liability.