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- Indian Stock Market News December 7, 2010
Will India's population do any good? Tue, 7 Dec Pre-Open
India has a lot going for it at present. While the developed world is still grappling with recession, India's GDP growth is moving at a fast pace. And one of the contributing factors to this growth going forward will be the rise in working age people in the country. As reported in a leading business daily, over the next two decades, India's working-age population will increase by 240 m. This is four times the entire population of Britain. Indeed, India's demographic dividend is expected to yield benefits in the form of higher savings and investments. This is expected to go a long way in bolstering economic growth of the country. At present, over half of India's population of 1.2 bn is below 25. And by 2020, the average age of an Indian is expected to reach 29 years.
That said, although there is a lot of optimism being displayed over the rise in the young working population, there are many concerns too with respect to the same. For starters, India's young population might be increasing. But how much of this young workforce is skilled? For India to grow its GDP on a sustained basis, it will have to move up the value chain and offer specialized expertise in both the manufacturing and services field. For this to take place, India's education system needs to be hauled up. How soon this will happen is anybody's guess. Especially since the government's finances at the current juncture are already stretched.
Then India has to deal with the problem of poverty. Already 800 m people are living on under Rs 20 (45 cents) a day. Not just that, the Maoist revolt in poor areas has cut of these regions from the economic boom that is being witnessed elsewhere.
Jobs will also have to grow if this rise in young population is to be absorbed. And an improvement in the standard of living in most of its people will ensure that the country enjoys the fruit of its working population for some time to come.
Thus, while the benefits are visible, challenges are also plenty. Will India's growing young population be a boon or a curse in the longer run? Only time will tell.
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Dec 6, 2010GOOOOOD