[ad_1]
New Delhi
CNN
—
India will overtake China this year to become the most populous country in the world.
When China reported its first population decline in more than 60 years in 2022, the chances of India passing that major milestone within months skyrocketed.
This change will have major economic implications for Asia’s two giants, each with more than 1.4 billion inhabitants.
In addition to demographic data, China is also reporting one of the worst economic growth rates in nearly half a century, a serious challenge facing China as its workforce shrinks and the number of retirees rises. is emphasized.
In India, what economists and analysts call a “demographic dividend” could continue to support rapid growth as the number of healthy workers rises.
But there are concerns that the country may miss out. That’s because India is not creating job opportunities, even though millions of young job seekers are already finding jobs each year.
According to 2021 data from the Organization for Economic Co-operation and Development (OECD), the working-age population in South Asian countries exceeds 900 million.This number is expected to exceed 1 billion According to the Indian government, in the next 10 years.
But experts warn that these figures could go awry if policymakers don’t create enough jobs. Already data show that a growing number of Indians are not looking for work due to lack of opportunities and low wages.
According to World Bank data for 2021, India’s labor force participation rate (an estimate of the active workforce and those looking for work) is 46%, among the lowest in Asia. The percentages for China and the United States were 68% and 61%, respectively.
For women, the figure is even more surprising. According to World Bank data, India’s female employment rate has fallen from about 26% in 2005 to just 19% in her 2021.
“India is sitting on a time bomb,” Chandrasekhar Sripada, professor of organizational behavior at the Indian School of Business, told CNN. “If we can’t create enough jobs in a relatively short period of time, there will be social unrest.”
India’s unemployment rate was 8.3% in December, according to Mumbai-based independent think tank Center for Economic Monitoring of India (CMIE), which publishes more regular employment data than the Indian government. In contrast, the US rate was around 3.5% at the end of last year.
“India has the largest youth population in the world…there is no shortage of capital in the world today,” CMIE CEO Mahesh Vyas wrote in a blog post last year. “Ideally, India should seize this rare opportunity to easily access labor and capital to fuel rapid growth. However, it appears to have missed this bus.”
Lack of quality education is one of the biggest reasons behind India’s unemployment crisis. Sripada said there had been a “massive failure at the educational level” by policy makers, adding that Indian institutions are focusing more on “machine learning” than “creative thinking”.
As a result of this toxic combination of poor education and lack of jobs, thousands of college graduates PhD holders apply for low-income government jobs such as “pions” and office boys that pay less than $300 a month.
Fortunately, policy makers are aware of the problem and “are now starting to place a sensible emphasis on skill creation,” Sripada said. But it will be years before the impact of the new policy is seen, he added.
China, Asia’s third largest economy, also needs to create more non-agricultural jobs to maximize its economic potential. More than 45% of India’s workforce is employed in the agricultural sector, according to recent government data.
According to a 2020 report from the McKinsey Global Institute, the country needs to create at least 90 million new non-farm jobs by 2030 to absorb new workers. Many of these jobs could be created in manufacturing and construction, experts say.
Amid heightened tensions between China and the West, India has made some progress in boosting manufacturing by attracting international giants such as Apple to boost domestic production. But the factory still accounts for only 14% of India’s GDP, according to the World Bank.
GDP grew by 6.8% The South Asian nation is expected to become the world’s fastest growing major economy, according to forecasts for the current fiscal year ending March. But even this growth is “insufficient,” according to a former central banker.
“A lot of this growth is unemployment growth. Jobs are basically Task 1 for the economy. Not everyone needs to be a software programmer or consultant, but they do need decent jobs,” says Reserve Bank of India. Raghuram Rajan, the former president of , told media company NDTV last year.
According to a McKinsey report, “For profitable and productive employment growth of this magnitude, India’s GDP will need to grow by 8.0% to 8.5% annually over the next decade.”
[ad_2]
Source link
