Friday, December 29, 2006

Demographic Dividend

India’s huge working age population is slated to turn into its greatest asset, provided they have access to modern healthcare, nutrition and education.

Census 2001 shows that 54% of the country’s population is below 24 years of age. The mean age of an Indian today is 24 years and India is projected to have a declining age-dependency ratio till 2035. 83% of the 371 mln increase in population will be in the working age group of 15 to 59. Today Asia (excluding Japan) accounts for 13% of the world’s GDP, while Western Europe accounts for 30%. The twain are set to converge sometime in the future.

A reality check about where we are today runs like this:

  1. Nearly 6000 ITIs – outdated curriculum, outmoded attitude, lack of quality trainers and output.
  2. 5 mln students graduating out of colleges every year; but without any skills connecting them to employment.
  3. Mismatch between educational system output and industry’s manpower requirement.
  4. Over 70% of labor force (both organized and unorganized) is illiterate or educated below primary level. Only about 13% of the population aged 15 and above is having at least higher secondary certificate.
  5. Low skill level among women causing rise in unemployment rate for women.

Mere having a huge working age population, more so when other developed countries are having an ageing population, will not necessarily translate into an advantage for us, unless our workers are skilled enough to produce the goods and services that are in demand in advanced economies. Therefore we must invest in vocational training centres in small towns and technical colleges in big urban centres.

The existing framework must be restructured to provide for:

  1. Flexibility to move between various general educational, vocational and technical streams.
  2. Flexible system of learning to include dropouts, underprivileged and others.
  3. A funding scheme to provide for subsidies to disadvantaged sections for pursuing education and skill building.
  4. Resource mobilization to revive the middle layer -- those who pass out of school and do not enroll in the graduate degree colleges.