Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

How India's Demography Will Play Out in 2020?
Fri, 10 Jun Pre-Open

The recent GDP numbers portrayed India as the world's fastest growing economy. This optimism struck a chord with many Indians and made them take pride. While India may be the fastest growing economy, Indians on the other hand are not doing any better. If recent data is to be believed, the overall employment scenario in India is not stacked properly.

According to a research note by Kotak Institutional Equities, India isn't creating enough jobs to get its people off the farm in large numbers. The report states that around half-a-billion people in India are likely to be dependent on the agriculture sector by 2022, contributing to only a 9th of the GDP.

The study compared 24 industry reports commissioned by the National Skills Development Council (NSDC) with similar reports put out by NSDC earlier. The earlier reports had put the size of the Indian workforce at 654 million by 2022. The number is now a lot lower at 575 million.

Further, the earlier report stated the number of people who are expected to be working in agriculture in 2022 at 18% of the workforce. However, as per the new estimates this now stands at 216 million or around 38% of the workforce.

Now this is certainly problematic. Because agriculture forms a small part of the Indian economy. However, still half of the Indian population depends on agriculture for a living. This has led to the issue of disguised unemployment in the rural areas. Vivek Kaul, editor of Vivek Kaul's Diary, has made a similar case in one of his recent articles. As he writes... "agriculture formed around one seventh of the Indian economy during the last financial year. At the same time around half of the population is dependent on it. The point being that it employs many people than it actually should. Hence, there is a huge disguised unemployment in the rural areas."

Further, the above data also shows India's incapability to generate enough blue-collar jobs for a bulging workforce. And this is clearly visible. Despite a rise in youth literacy rates, many engineers and MBAs are left without having the right job for them.

Also, if the estimates turn true, one also cannot hope a rise in standard of living for most of the Indian population. As per the report, per-capita incomes of those employed in agriculture sector in 2020 are likely to stay at around US$ 1.50 per day. This level is barely above the poverty line.

Lastly, a major chunk of population remaining in agriculture will also limit the urbanisation potential and industrialisation in India. It will therefore be a while before India can think of competing with China in manufacturing.

Hence, the above estimated trend, if proved correct, will bring many economic concerns for India - a country that boasts of the largest working age population in the world.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary

Equitymaster requests your view! Post a comment on "How India's Demography Will Play Out in 2020?". Click here!


Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Jan 16, 2018 01:13 PM