India lures foreign colleges to cash in working-age boom

Oct 03 2013, 09:18 IST
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Students attend a lecture at a classroom at an institute in Manesar (Gurgaon), on the outskirts of New Delhi. (Reuters) Students attend a lecture at a classroom at an institute in Manesar (Gurgaon), on the outskirts of New Delhi. (Reuters)
SummaryMany employers say graduates from homegrown universities are often unemployable because job seekers do not have the skills they want.

When 19-year old Pavitra Singh, one of 20 million students at India's universities and colleges, gets her degree in two years' time, she fears it will not be enough to secure a job.

Indian employers tend to agree. Many say graduates from homegrown universities are often unemployable because job seekers do not have the skills they want, one reason why New Delhi is trying to fast-track legislation to allow foreign colleges, until now largely shut out of India, to open their own campuses in the country.

On the cusp of a boom in its working-age population, India is racing against time to raise the quality of its education to prevent a demographic dividend turning into a demographic curse.

"It is absolutely urgent," said Tobias Linden, the World Bank's lead education specialist in India. "The people who will make up the youth bulge have already been born. This is not a hypothetical situation. They might just be one, or two, or three years old now, but taking action to help them when they become 18 - those moves have to start now."

Over the next two decades, Asia's third-largest economy will add up to 300 million people - the equivalent of almost the entire population of the United States - to its workforce.

India Graduates

GRAPHIC: India's demographics and tertiary education

That prospect offers hope that India, struggling now with its weakest economic growth in a decade, can finally follow in the footsteps of the likes of China and the Asian Tigers.

A generation ago these countries made good use of their growing workforces, training young people and putting them to work in export-orientated manufacturing, to generate economic growth that was the envy of the world.

BEST CHANCE

India's working-age population will not peak until 2035, in contrast to China, where the working-age population topped out this year, brokerage Espirito Santo Securities says. Labour forces in South Korea, Taiwan and Singapore will peak in the next five years.

Such demographic factors offer India "the most compelling conditions for economic growth the country will, we argue, ever have", the brokerage said in a report. "Yet demographics are not destiny."

Attracting foreign colleges to open campuses in India is one solution for a university system that India's planning commission says is "plagued by a shortage of well trained faculty, poor infrastructure and outdated and irrelevant curricula."

Despite a surplus of workers, employers across sectors say local universities do a poor job

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