Make productive use of population before it becomes an additional burden

According to recent report, India's population would have already crossed 1,420,015,074 on June 17, based on Worldometer elaboration of the latest United Nations Data. Today, India accounts for 17.7% of the world population. Of this 35% of the population is urban and the median age in India is 28.4 years. The growth rate of population in India was 0.80%, 0.68, %, 0.81% in 2021, 2022, and 2023, respectively.

The demographic data released by United Nations Population Fund (UNFPA) estimates India's population at 1.4286 billion against 1.4257 billion for China. What does this mean for India? Is it a positive development or an additional burden? What will be its impact on future economic development and will the current rate of economic growth and composition help ensure adequate potential for gainful employment for different ages of population? Are we been able to provide basic, and medium and advanced education to the young age-group?

At the current juncture, we find that unemployment and under employment have been worrying factors despite the best of efforts by the central and state governments. While agriculture has been the biggest source of employment in the rural areas, in order to enhance its productivity, it is necessary to enhance modern methods of farming and lessen the burden of excess employment in agriculture, by providing employment opportunities in rural industries, exporting local brands, encouraging industries to move to rural areas and encourage micro and small industries to be set up in such rural areas in collaborative and partnership mode with large corporates, chain management by promoting warehouse facilities, connectivity through physical road infrastructure and improved railway connectivity for cargo movement. The government focus on rural physical infrastructure, creating productive assets through Mahatma Gandhi Rural Employment Guarantee Scheme, Aspiration District programme, One Product per District for Marketing within India and abroad are some of the worthy initiatives being undertaken by the government towards this goal.

Another important provider of employment is the manufacturing sector. According to PIB (April 7, 2022), the estimated employment in the manufacturing sector was 5.7 crore in 2017-18, 6.12 crore in 2018-19 and 6.24 crore in 2019-20. According to the latest Periodic Labour Force Survey (PLFS) data, manufacturing employment increased by about 5% in 2020-21 and about 8% in 2021-22. According to the Team Lease Services, Employment Outlook Report for the services and Manufacturing sectors Q1, FY24, hiring intentions in services and manufacturing sectors are 10% more than the previous year. According to Niti Aayog , Government of India Discussion Paper by Ramesh Chand and Jaspal Singh, the industry and services sectors, which constitute more than 80% of the gross value added in the country, provides employment to 54.4%.of the workforce, and agriculture, which account for 18.29% of the GVS in 2019-20, retains 45.6% of the work force. According to the annual report of the MSME ministry for 2022-23, the estimated employment in the sector was 497.78 lakh in rural areas and 612.1 lakh in urban areas. A majority is in the micro sector with 630.52 lakh estimated enterprises providing employment to 1076.19 lakh persons, accounting for 97% of the total employment in the sector.

According to Statista, 2021 the share of households by gross annual income across India is rich (over Rs 3 lakh) constitute 3%, the middle class (Rs 50,000 to Rs 3 lakh) constitutes 30%, aspirers (Rs 12,500- Rs 50,000) 52% and destitute with less than Rs 12,500 accounting for 15%. This uneven income and inequality and the difference between have and have nots has to be lessened by all stakeholders.

India's GDP perception for 2021 was $2257, a 18.2% increase from 2020. Nominal GDP or GDP at current prices as per PIB 31st May 2023, in the year 2022-23 is estimated to attain a level of Rs 272.41 lakh crore as against Rs 234.71 lakh crore in 2021-22, showing a growth rate of 16.1%., India's per capita income for 2022-23 stands at Rs 1,72,000 according to estimates from the National Statistics Office as against Rs 86,647 in 2014-15. The Union Finance Minister has said that Indian economy has increased in size from being the 10th largest to fifth largest in the world in the last nine years and per capita income has increased to Rs 1.97 lakh. In order to take full advantage of the demographic dividend, and have the productive use of our human resources, we have to enhance the GDP at a higher growth mode to see that per capital income grows substantially along with GDP growth. Here our PM's call to make full use of India's Amrit Kaal next 25 years and achieve developed country status becomes extremely relevant and important and rising population becomes a great positive factor for India to reach the pinnacle of growth and occupy enviable position in the comity of nations when India reaches 100 years of its Independence.

Another important consideration is providing education to young children and improving their skills and talents to make them employable or take up self-employment by orienting them towards entrepreneurship. One positive to be noted is that the literacy rate is 77.70% (2021 and 2022). According to India Sills Report 2022, of sunshine diversity, CII and tagged, unemployable rate stands at 54.1% as opposed to 53.79% last year.

The Ministry of Skill Development and Entrepreneurship, by way of various initiatives and schemes, is providing need-based skill training to make young employable or turn entrepreneurs. India's women labour force is at 23.5%, which is much less in comparison. In China it was 45.2% in 2022. This issue of greater women labour force participation has to be taken in a mission mode as that would enhance their contribution to the GDP. India's initiative of Digital India and Start up India should also assist in giving more opportunities for women participation in India’s development story.

(The author is former Chairman & Managing Director of Indian Overseas Bank)