Demographic Dividend

[Economic Survey Ch2] Demographic Dividend, Employment, Labour reforms,

1. Demographic Dividend?

2. Why jobs are not created?

3. Problem#1: MSME

* Problem: Bureaucratic procedures

* Problem: Infra bottlenecks

* Problem: Getting finance

* Problems in Debt (borrow) method

* Problem in Equity (partnership, IPO, shares) finance

4. Labour laws

5. Case#1: downsizing Case #2: Shifting business

6. Rigid Labour laws: Implications?

7. Pro-Worker or Pro-employer?

8. Apprentices

9. Apprentice: Indian scenario

10. Education

11. School Governance

12. Education: recommendations

13. CONSEQUENCES AND CONCLUSION

* Approach #1: Business as usual

* Approach #2: Pro-active, Reformist

* Approach #3: Populist, Anti-risk

Demographic Dividend

In next 35 years, around 70 percent of India’s population will be between the working age of 15 and 59.

By 2050 | Employable people (crores) |

India | 100 |

Europe | 45 |

USA | 27 |

* It means, India will have more number of people in the productive age groups= more incomes=more demand of products= more growth=high GDP.

* Seems plausible in theory. But hard to do in practice.

* A larger workforce translates into more GDP only if there are productive jobs for it.

* If people are given work of digging up wells and ponds (MNREGA), they’re employed but that doesn’t lead to significant rise in GDP (compared to if same number of people were given some skill training and job in manufacturing or service sector).

* So If you really want to tap the demographic dividend, then labour force must go through following “transitions”:

1. From agriculture to non-agriculture (manufacturing / service sector).

2. from rural to urban

3. From the unorganized sector to the organized.

4. from subsistence self-employment to wage employment.

Why jobs are not created?

Problem#1: MSME

MSME= micro, small, and...