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Demographic Dividend or Demographic Burden? India’s Education Challenge

Demographic Dividend or Demographic Burden? India’s Education Challenge
 Christophe Jaffrelot
Senior Fellow - India, Democracy and Populism
 Sanskruthi Kalyankar
Postgraduate student

"India’s demographic dividend began in the early 1980s and is expected to come to an end towards latter part of 2030s. India is, therefore, just beyond the midpoint of its dividend and this once in a life time opportunity for our nation is unlikely to last beyond another quarter of a century from now. We therefore, need to increase and sustain our GDP growth, reduce poverty, and enhance human capabilities of our people. Every year lost will never return in the life of a child or youth and in the next 25 years, India will be an ageing society".
[Ministry of Skill Development and Entrepreneurship]

"With a large pool of skilled people, India has an opportunity to become a skill provider for the world, particularly the ageing developed world".
[Pradhan Mantri Kaushal Vikas Yojana]

India’s population of under 19-year-olds has reached its peak and the country is therefore in a position to maximize its demographic dividend. But for that it needs to educate its youth properly. This is a huge challenge both quantitatively and qualitatively. In terms of numbers, proper training has to be provided to the 8 million new job seekers who enter the job market every year - according to a conservative estimate. In 2017, only 5.5 million had been created and India is facing today a massive employment problem, the unemployment rate being the highest in 45 years. According to an independent statistical institution, the Centre for Monitoring Indian Economy Pvt. Ltd., the Indian youth is the first casualty of this state of things, as the unemployment rate reached 34% among the 20-24 years old in the first quarter of 2019 – and even 37.9% among the urban lot. Official sources emanating from the government of India do not give very different data: according to the last 2018 Periodic Labour Force Survey (PLFS), the unemployment rate among the urban 15-29 years old (a very large bracket) was 23.7%. One may hypothesize that this pervasive joblessness was due to the poor training of the youth as only 7% of the people surveyed in the framework of the PLFS declared any formal or informal training.

But there is a paradox there because at the same time, according to a recent survey, "48% of India employers report difficulties filling job vacancies due to talent shortages", so much so that 36% of them have decided to train their own people. The sector that is the most badly affected is one of the strong points of India’s economy, the Information Technology (IT), where 140,000 skilled techies could not be recruited in 2018 in spite of the employers’ efforts (a high proportion of the 500,000 jobs offers that had been made that year).

A similar mismatch between supply and demand is also evident from the enormous number of graduates and post-graduates who apply to unskilled jobs. When the Indian Railways announced that it would create 63,000 jobs - all situated in the lowest level of its employment ladder -, 20 million candidates applied, including 419,137 BTech degrees holders and 40,751 people with master degrees in engineering. At an aggregate level, the CMIE reports are showing that the more educated Indians are, the more likely they are of remaining unemployed too, the joblessness rate of graduates reaching 14.7% (for the urban graduates), against 11.1% for those who have left school in class 10th-12th, 3.6% for those who stopped in class 6th-9th and 1.1% for those who studied till class 5th only.[1]

The government of India’s figures are even more disturbing, as the Periodic Labour Force Survey covering the last quarter of 2018 revealed that 33% of the formally trained 15-29 years old who had been formally trained were jobless. As a result, many stopped looking for a job: 42% of the formally trained young people belonging to this age class are not part of the labor force at all. Many of them moved out "after a fruitless job search" [2] to join the huge category known as NEET that is composed of those who belong to the 15-29 years-old age class and are "Not in Education, Employment or Training". This group was 70 million large in 2005; it is now above 115 million according to credible estimates.[3] The situation is much worse for women than for men, as evident from the graph on Page 3 and 4 of the PDF.

In order to understand this situation, in the first part of this article, we will analyze the education system of India, from primary school to higher education. In the second part, we will focus on the policies initiated by the Modi government in this domain.

Policy Brief  Demographic Dividend or Demographic Burden? India’s Education Challenge



References :

[1] Unemployment in India A Statistical Profile, op. cit., p. 12

[2] I. Anand and A. Thampi, "33% of India’s skilled youth jobless: official survey", op. cit

[3] Santosh Mehrotra, “India Does Have a Real Employment Crisis”, op. cit.



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