Unemployment, jobless growth, declining female labor force participation are some of India’s challenges
Release date – Saturday 23 July 12:45
The label of being the world’s most populous country need not alarm India, but it could open a new window of opportunity in a world of rapid aging and sharply declining fertility rates. India is the youngest of the most populous countries with an average age of 29. Also, the country’s working-age population is increasing. This presents India with a unique opportunity to benefit from its favorable demographics, thereby contributing to its economic growth and social development. However, to realize this potential, the country should address some key challenges and implement strategic reforms in various areas. Unemployment, jobless growth, declining female labor force participation, and lack of skill upgrading are some of the challenges facing the country. Public investment in education, skills development and opportunity creation, especially for disadvantaged youth and women, will be key for India to leverage its demographic dividend to its advantage over the next two decades. It is no surprise that India surpasses China in terms of population, as this has been expected for some time. But what has accelerated this process is the fact that China’s economic growth has slowed sharply. Using various indicators—fertility and replacement rates, age and regional data—demographers have a more layered understanding of population dynamics than when the country launched its first family planning program.
One positive aspect of India’s population growth is the inherent opportunity for a demographic dividend. More than two-thirds of India’s population is between the ages of 15 and 64, considered a country’s working population, according to the latest report by the United Nations Population Fund. India has a large workforce of about 500 million people and is expected to grow further in the coming years. However, most of them are either unskilled or underskilled, facing low productivity and employability in a changing market environment. Another area of concern is the decline in women’s labor force participation. According to World Bank data, India’s female labor force participation rate has plummeted from 32% in 2005 to 19% in 2021. This is a key reason the country has been slow to take full advantage of its large working-age population. It needs to move from the low-productivity agricultural sector to higher-productivity manufacturing and services, which can absorb more labor and generate income. According to the 2011 census, the young population in the 10-24 age group was 365 million and is expected to reach 379 million in 2023. As a country with the largest young population, having effective policies that favor a large workforce is key. There is a need to improve the quality and relevance of skills development programs to align with industry requirements, global standards and emerging technologies.
