The demographic dividend that India enjoys today is unparalleled. About 54% of our population is below the age of 25. If we look back at the Union government’s policy documents and pronouncements from 2014-15, it indicates an awareness of the potential this holds for the country. However, this awareness doesn’t seem to prevent the ruling party from pursuing a politics that could potentially obliterate this demographic dividend. This policy also runs counter to the government’s declared policy of bridging the skill gap. In a sense, there seems to be a huge gap between the words uttered on records and the actions carried out in addressing the issues surrounding the young workforce of our country. Let’s check what data speaks about the young workforce in India in the following paragraphs:
Policy Contradictions
On one hand, the government, in its public documents, affidavits submitted to the Supreme Court, and policy pronouncements, states that India doesn’t need a policy to limit family size. It argues against any coercive policy, citing the country’s total fertility rate (TFR) being on the verge of “replacement rate,” below which the population begins to contract, leading to damaging consequences. On the other hand, the Prime Minister raises concerns about population growth from the Red Fort, and BJP-run state governments implement unnecessary population stabilisation policies. The aim appears to be signalling to the Hindu majority that the high birth rate of the Muslim minority is a danger—a claim that data does not support. Data shows that fertility rates across regions and religious communities are rapidly declining, yet the BJP continues to push this narrative.
Demographic Advantage
India’s demographic structure is unique, with over 62% of the population in the 15 to 59 years age group. This age group, which is the working age group, is expected to bulge in the coming decade, providing India with a significant advantage. Furthermore, while the labour force in the industrialised world is expected to decline by about 4% in the next 15 to 20 years, India’s labour force is projected to increase by about 32%. This demographic dividend is set to last until at least 2040, possibly 2050.
The Skill Gap Challenge
A 32% increase in the country’s labour force means little if the labour force is not skilled. Currently, only about 5% of India’s labour force has undergone formal skill training. This is alarmingly low compared to countries like the UK (68%), Germany (75%), the US (52%), Japan (80%), and South Korea (96%). The government’s own estimates project a significant skill gap by 2022, with shortages in sectors like infrastructure, auto and auto components, building and construction, clothing and textiles, transport and logistics, organised retail, real estate services, healthcare, food processing, and education. Without addressing this skill gap, the available labour force will remain unskilled and unsuitable, leading to decreased productivity and global competitiveness.
Government Initiatives and Their Shortcomings
In October 2018, the Government of India, in partnership with the World Economic Forum and Infosys, constituted a Closing the Skills Gap Task Force. However, the progress of this Task Force is unknown, as the Ministry of Skill Development’s annual reports do not mention it. The National Policy on Skill Development and Entrepreneurship 2015 aimed to integrate skilling with formal education in 25% of the country’s schools by 2020. However, there has been little progress, and the policy seems to have been abandoned after its initial announcement. The India Skills Report 2021 highlighted that employability among formally educated individuals is less than 50% across the board, with specific sectors showing even lower rates of employable skills. This gap in employability underscores the urgent need for effective skill development initiatives.
The Current Employment Scenario
The unemployment rate in India rose to 6.95% by the end of July 2021, with urban areas experiencing an 8.3% unemployment rate and rural areas 6.4%. The Labour Force Participation Rate showed a minimal increase, with much of the new employment being in unskilled, low-paying jobs in the agriculture sector. Moreover, there is significant job shedding in manufacturing and mining sectors, while service sector absorption remains unchanged. This indicates that a large portion of the labour force is either unemployed, underemployed, or unemployable due to the lack of skills.
The situation is further exacerbated by the rapid pace of technological advancements, which demands a workforce with updated and specialised skills. Without significant investment in skill development and vocational training, the gap between job requirements and available skill sets is likely to widen, potentially stunting economic growth and increasing socio-economic disparities. Additionally, the stagnation in the service sector highlights the urgent need for policy interventions that can create sustainable, high-quality employment opportunities across various industries.
Wrapping up
India’s demographic dividend presents a unique opportunity for the country to become a global economic powerhouse. However, this potential can only be realised if the labour force is adequately skilled. The government needs to move beyond mere slogans and take concrete actions to bridge the skill gap. A skilled and employable population is essential for achieving goals like Atmanirbhar Bharat, Make in India, Stand Up India, Startup India, and Digital India. Without sincere efforts in skill development, these initiatives will remain unfulfilled promises.
Mohd Ziyauallah Khan is a freelance content writer based in Nagpur. He is also an activist and social entrepreneur, co-founder of the group TruthScape, a team of digital activists fighting disinformation on social media.
