April 5, 2022
The GDP target of US$40 trillion by 2047 maybe is achievable with the right interventions from stakeholders.
Closing the skill gaps of the qualified workforce should be prioritized as India is highly dependent on human capital.
Labour-intensive sectors such as manufacturing and services must be treated as growth engines.
By 2030, 24.3% of the global workforce will be from India.
India’s GDP can grow from US$3 trillion to US$40 trillion by 2047 if the country’s working-age population is gainfully employed, as per a report by the Confederation of Indian Industry (CII). The report, ‘Harnessing India’s Demographic Dividend for Boosting Growth’, states that the country’s working population will increase between 2020 to 2050, and be a catalyst for economic growth. Although the GDP target of US$40 trillion by 2047 might seem to be ambitious, it is achievable with the right interventions from stakeholders.
Indian job market trends
Because the current job market is partial towards high-skill labour, job opportunities for the low-skill labour market will get hampered and pose a challenge in the future. Despite increased literacy rates, there have been no concrete efforts made to provide vocational training, which has contributed to the high unemployment rate amongst the educated. The report states that closing the skill gaps of the qualified workforce should be prioritized as India is highly dependent on human capital as compared to other countries that have a similar level of economic growth and development. Therefore, it is imperative that the government, industry, and academic sectors contribute equally to skilling and reskilling, especially in the wake of Covid-19 that has brought about multiple structural changes in the working environment.
Focus on labour-intensive sectors
The report says that labour-intensive sectors such as manufacturing and services must be treated as growth engines. In 2020, approximately 900 million people, or 67%, of the total population were in a working-age group of 15-64 years. This number is expected to grow by another 100 million by 2030 despite a decrease in the fertility rate; therefore 24.3% of the global workforce over the next decade will be from India. Focus on labour-intensive industries such as leather, textiles, gems, jewellery and food products will also help in greater export revenues. The report also calls for increasing the R&D expenditure from 0.7% to at least 2% to keep up with an increasingly competitive business environment that is driven by automation and artificial intelligence, especially in a post-pandemic world.