The recent estimates and projections by the UN Department of Economic and Social Affairs (UNDESA) indicates that India has surpassed China as the world’s most populous country. With a significant portion of the population under the age of 35, India possesses a valuable demographic advantage. To fully leverage this demographic dividend, it is crucial to prioritize the development of vocational, technical, and managerial skills, foster a culture of innovation and entrepreneurship, and harness the potential of emerging digital technologies.
To capitalize on the potential of the labour force, particularly those with limited education and skills, there is a need to focus on labour-intensive manufacturing sectors such as textiles, toys, footwear, auto components, sports goods, and agricultural processing. Additionally, sectors like restaurants, hotels, mining and construction, healthcare, and caregiving services offer substantial growth opportunities. However, supporting the manufacturing sector requires investment in infrastructure development, reducing trade and transaction costs, improving the intellectual property rights ecosystem, enhancing ease of doing business, and streamlining labour laws and taxation systems.
Micro, small, and medium enterprises (MSMEs) play a crucial role in Indian manufacturing and require support to enhance competitiveness, scale up operations, upgrade technology, and integrate into global supply chains. To fully realize the demographic dividend, it is essential to enhance the productivity and efficiency of the labour force through skilling, re-skilling, and up-skilling initiatives. Emphasis should also be placed on providing quality education and healthcare facilities.
While progress has been made in skill development programs, a significant portion of employment in India remains in the unorganized sector, where workers often face underpaid jobs. Efforts should be made to improve the skills of workers in this sector. The MSDE Vision 2025, part of the skill mission, aims to strengthen the linkages between education and skills, generate demand for formal skills, and create a high-skilled ecosystem.
Moreover, the successful execution of the National Education Policy 2020, which prioritizes knowledge updating, will play a crucial role in shifting from a mere quantitative “demographic dividend” to a qualitative “talent dividend.” This transition necessitates the cultivation of a skilled and knowledgeable workforce.
Lastly, India’s demographic advantage offers a significant opportunity for economic expansion. To fully capitalize on this potential, it is imperative to prioritize skill development, foster sectoral growth, invest in infrastructure, and enhance the overall quality of education and healthcare. By undertaking these measures, India can effectively transform its demographic dividend into a talent dividend, establishing itself as a valuable source of labour supply on the global stage.
Dr Pushpendra Singh, Assistant Professor, K J Somaiya Institute of Management
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