India not reaping benefits
of its demographic dividend
India
is not reaping the benefits of demographic dividends, former RBI governor
Raghuram Rajan said on Tuesday, emphasising that there is a need to focus on
improving the human capital and enhancing their skill sets.
I
think we are in the midst of it (demographic dividend), but the problem is we
are not reaping the benefits, Rajan said at a conference on Making India an
Advanced Economy by 2047: What Will it Take at the George Washington University
here.
That's
why I said 6 per cent growth. If you think that's about what we are right now,
take away the fluff in the GDP numbers. That 6 per cent is in the midst of a
demographic dividend. It is much below where China and Korea were when they
reaped their demographic dividend.
"And
that's why I'm saying we are being overly complicit when we say this is great.
This is not because we are losing the demographic dividend because we are not
giving those guys jobs, the former RBI governor said.
And
that leads us to the question, how do we create those jobs? The answer to my
mind is partly enhancing the capabilities of the people we have, partly
changing the nature of the jobs that are available and we need to work on both
fronts.
This
idea of apprenticeship, which the Congress has in its manifesto, is worth
working on. I think there's a lot that needs to be done to make it effective,
but we need many more students to at least be capable of doing a good job,
Rajan said, adding that there also needs to be a focus on job creation.
Rajan
was critical of India spending billions of dollars on chip manufacturing. Think
about these chip factories. So many billions going to subsidise chip
manufacturing, he said, adding that a number of job-intensive areas like
leather are not doing good.
We
are going down in those areas. No wonder we have more of a job problem. The job
problem was not created in the last 10 years. It's been growing over the last
few decades. But if you neglect the areas which are more intensive, I'm not
saying we need to now offer subsidised subsidies to leather examples, but
figure out what's going wrong there and try and rectify that, he said.
Responding
to a question, Rajan said a lot of Indian innovators now are going to Singapore
or to Silicon Valley to set up because they find access to the final markets
much easier there.
We
need to ask what is it that forces them to go outside of India to set up rather
than stay inside India? But what is really heartwarming is talking to some of
these entrepreneurs and seeing their desire to change the world and
increasingly many of them are not happy staying in India, he said.
They
want to actually expand more globally. I think there is a young India that has
a Virat Kohli mentality. I'm second to none in the world, Rajan said.
Earlier
in his presentation, Rajan said regardless of whether one picks services,
manufacturing, agricultural construction, India has a problem.
And
this is so well known, I don't need to elaborate. Unemployment numbers are
high, disguised unemployment is even higher, labour force participation is low,
female labour force participation is really alarmingly lowthe share of
agriculture and jobs is increasing in recent times. Of course, all this is
exhibited in highly educated unemployment and massive numbers of people
applying for government jobs. PhDs applying for jobs as peons in railways, he
said.
Even
as this is happening. Even as we have a massive labour which is unemployed, we
have the capital intensity of manufacturing steadily going up, Rajan said.
www.business-standard.com
dt. 18.04.2024