India's biggest challenge

The world's largest population will have too few jobs

According to a projection from the population division of the United Nations Department of Economic and Social Affairs, India is set to become the world’s largest country by population next year. Over the current year, India’s population will converge on China’s with both having a total of just over 1.4 billion people. What is of particular importance, however, is that India’s population will continue to grow, while China’s will now begin to shrink unless there is a structural change in fertility rates in either country. By 2050, according to the same projections, India’s population will be around 1.7 billion and China’s around 1.3 billion. While the exact numbers do not match with some other global projections — including a widely cited study last year published in The Lancet — the direction of movement does.

There was a time when a growing population was seen as India’s “demographic dividend”. That phrase is rarely heard today. Part of the reason is that it is now understood that India has prepared these generations of workers poorly if they are to represent a growth dividend. Educational attainments are simply not up to the mark. While, on paper, far more Indians have studied up to the school leaving level now, it is also the case that a lack of focus on school quality has meant that a large proportion of these do not, in fact, possess the basic skills expected of high school graduates. Some studies of schools in urban and peri-urban Delhi showed that as much as a third of high school students have no basic mathematics and language skills, and many are performing at a primary school level. This sort of workforce is hardly prepared for the job market, and unlikely to represent any “demographic dividend”.

Nor is there much of a job market for them to prepare for. It is true that official numbers for unemployment, under the Periodic Labour Force Survey for the period between July 2020 and June 2021, shows that unemployment was lower than in the previous year and at merely 4.2 per cent over the year. However, the headline numbers do not reflect the actual state, as these pages have pointed out before. It conceals a large number of self-employed, an even larger number of those choosing not to look for work, and a vast number of those switching back to disguised unemployment in agriculture. The worker population ratio is under 40 per cent. The jobs that would create a demographic dividend out of the young Indian workers of today and tomorrow are neither in agriculture nor in self-employment. It is all very well, in addition, to talk of skilling this generation after their school education. But unless they are given a solid grounding in the basics, attempts at vocational training may not work.

Having the largest population in the world with one of the world’s lowest employment ratios is a big problem, and India does not seem to be addressing it with the right level of urgency. Unless the human capital of this burgeoning cohort of Indians, going to be the largest in the world soon, is enhanced, India will face problems that are not just economic — missing jobs and growth —but also social. Recent riots related to government and military jobs are a harbinger of these problems.