‘Demographic dividend’, Can industry help India upskill its falling working age population?

Train them young: The latest government data has revealed that the country may lose out on its ‘demographic dividend’ edge by 2036.  To gainfully utilise the predominant youthfulness in the population, will India become a manufacturing hub like China and ramp up export of products and services globally? Republic Business takes a deep dive. 

Manufacturing Strategy 

Economics, Politics and Public Policy in East Asia and the Pacific, a prominent think tank, in its report published in October this year, has stated that  India needs at least 10-12 million new jobs each year to create sufficient employability for its population. In order to get the non-farm jobs back on track and resume high GDP growth, the country  needs a manufacturing strategy similar to China and East Asia, that raises the share of labour-intensive manufacturing in output. A slow global economy may not generate export demand, but boosting domestic demand can create jobs, says the report.  

Industry Role 

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In March this year, Ministry of Statistics and Programme Implementation (MOSPI) (refer to infographics) issued a report ‘Women and Men in India 2022’, revealing projections for India’s population till year 2036. “According to Report of the Technical Group on Population Projections for India and States 2011-2036, 735 million people or 60.7 per cent of India’s population was in the working age group of 15-59 years in 2011 and this population group is expected to increase over the years and would reach 988.5 million in 2036,” the MOSPI report had said, while making projections in terms of absolute numbers and growth rates. 

While India’s working-age population is set to grow to 988.5 million by 2036, this group of people for the first time since 2011, comprise a smaller share of India’s total population than earlier.  This trend has put the onus on India Inc for upskilling and making youth more job-ready, says a report “Gainful Employment of Youth” prepared by Mumbai-based Technology Transfer Association.  “The industry has to identify their requirement of trained manpower including filling retirement gaps and expansion requirements, " added the TTA report.  In order to deploy additional trainees, the industry will identify expansion and diversification programme, for which the government must extend soft loans with interest  concession. The industry has to implement this programme during the period when trainees are undergoing training in any industrial unit, the report has stated.    

Government Role 

As per the MOSPI report, India’s working-age population made up 60.7 per cent of its total population in 2011, and this grew consistently through 2016 and 2021. It is further projected to grow through 2026, and reach 65.1 per cent in 2031. (refer to infographics) However, by 2036, the share of India’s working-age population is projected to dip to 64.9 per cent of the total population. In view of the government projections on the fall in the share of country’s working-age population by 2036, coupled with the ongoing fall in the share of the younger population, resulting in the proportion of India’s aged population growing in years to come, the TTA study has suggested that government’s employment policies should  make a provision for soft loans with concessional interest rate to industry to expand itself in the area of  industries choice to accommodate additional employment of the trainees undergoing the training programme. 

“An onus on selection of SSC, graduate and management trainees, coupled with a stipend in the first  year and higher stipend in the second year with offering job at  the end of second year and time promotion at the end of fourth year  should be part of a five-year career plan,” says the report.