Right strategy can turn young population into growth engine
United Nations data shows India is the world’s most populous country. India’s population grew by 1.56% to reach 142.86 crore, overtaking China which is at 142.57 crore. It is now imperative for India to conduct the decennial census to define the socio-economic composition of its population to devise strategies for converting the demographic challenge into an opportunity. India is a nation of young people, with 68% aged between 15 and 64, the ‘working population’. China’s ageing workforce and the West’s quest for a China-plus-one solution for its production requirements present India with an opportunity to attract industry and become a global manufacturing hub. Prime Minister Narendra Modi has already put India on this path with a massive hike in capital expenditure at around 20% of the GDP, the highest in almost a decade. India’s infra-push with modern airports, seaports, world-class roads, high-speed internet, and stable and transparent banking and regulatory systems has caught the world’s attention.
However, the main attraction for global manufacturers is India’s large segment of the skilled but cheap workforce. They must undergo professional training and re-skilling to compete domestically and globally. Internally, the Union government has taken some exemplary steps, such as creating micro-entrepreneurs through schemes like the Mudra loans. These initiatives help create thousands of startups, which in turn create jobs. But since the Indian corporate sector is still wary of making big investments, jobs the government creates and startups alone may not be enough to meet the growing demands of a swelling population. Therefore, the second challenge is to attract global manufacturers. For this, colleges must produce employable graduates, and the government must revive and expand the ITI network for vocational training.
Russian companies are already arriving in droves. A Japanese industrial township already exists on the outskirts of the National Capital Region. India is the fastest-growing large economy and a big market too. Companies around the globe are looking to set up their manufacturing facilities close to such markets. India offers them that incentive to set up shop here. With the right moves, the next decade could see India becoming a major manufacturing hub, with its large population becoming its strength.