Reaping our demographic dividend

Written by Dr Shubbhada Sabade | Shubhada Sabade | Shubhada Sabade | Updated: May 20 2013, 05:49am hrs
Can the management students of today who will be the decision-makers tomorrow see an opportunity here

Inclusive growth has been a focus area of the 11th Five Year Plan and is on the agenda of the 12th Plan too. A new chapter Seizing the Demographic Dividend in the Economic Survey of 2012-13 emphasises that a good job is the best form of inclusion. It further says that Indias challenge is to create conditions for faster growth of productive jobs outside of agriculture, especially in the organised manufacturing and in services, even while improving productivity in agriculture. The benefit of rising to the challenge is decades of strong inclusive growth. As per Census 2011, Indias population stands at 1.21 billion, slightly more than the forecast, although the population growth rate has declined from 1.97% per annum between 1991 and 2001 to 1.64% between 2001 and 2011. India has a younger population in comparison to many other countries. Thus, labour force in India is expected to increase by 32% over the next 20 years while it will decline for developed nations and China. Whether we can reap this demographic dividend to the nations advantage or let it become a curse depends on two factors: drastic quality improvement in this new workforce by much better education, health and skill development on the one hand and creating better livelihood opportunities on the other. This article tries to present a model with which the corporate can help India achieve both, the emphasis being on education.


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Thanks to the Right to Education Act which became operational in 2009, most Indian children are in school, but the real challenge is of improving the quality of school education, which means extensive and improved teacher training, upgrading curriculum and enforcing accountability in teachers attendance, as Datt and Sundharam say. The Approach Paper of 12th Five Year Plan talks about the need to explore the scope for PPP projects in development of social sectors like health and education. As per the Economic Survey 2012-13, the challenge is to address both quality and quantity issues in skill development and training so as to correct the mismatch between employers who dont get people with the requisite skills and millions of job seekers who dont get employment. To this end, the National Skill Development Mission aims to impart employment-oriented vocational training to 8 crore people over the next five years incorporating the private sector (through PPPs and for-profit vocational training) and NGOs. Can the management students of today who will be the decision-makers in industry tomorrow see an opportunity here Will they be able and willing to enter into such PPPs to enhance their companys image as well as to build the next-generation India

In a box titled Formal Apprenticeship: An Idea Whose Time Has Come, the Survey enlists problems of cost, quality, scale and inability of the current education system to produce work-ready labour. In this environment, company-led apprenticeship programmes can play a powerful role in repairing, preparing and upgrading the labour force. They can aid five important transitions that the labour force is currently making: from agriculture to non-agriculture, from rural to urban, from the unorganised sector to the organised, from school to work and from subsistence self-employment to wage employment. But companies often hire cheap labour under the guise of apprenticeship programme. As for school education, the Survey says, The evidence strongly supports scaling up of supplemental instruction programmes using locally hired short-term teaching assistants that are targeted to the level of learning of the child.

The Survey further adds that if we continue with business as usual, the growing mismatch between employer needs and worker capabilities will put immense pressure on the education system and growth will be slower with inequality higher. However, if we adopt reforms in infrastructure, education, business and labour laws, we will have faster and more equitable growth with both agriculture and manufacturing sector creating better livelihoods.

I would like to combine the suggestions presented above into a separate model which can achieve inclusive growth for the nation. The industry can enter the education sector not only to make people work-ready after they finish formal education, but also to inculcate a better value-system of hard work, discipline, ethicality right from childhood. This is possible by setting up three categories of schools: one for the premier class, one for the middle classes and another for the masses of the poor and deprived, the basic inputs given in all the three being the same. The first category schools may cross-subsidise the third, or a tax-waiver given by the government by putting it under CSR. For the remote areas where children have to walk for hours to and from the school, the industry can consider setting up either residential schools or mobile schools. By monitoring the students aptitudes, their fields and extent of education would be decided and a short period of apprenticeship added before getting them into the workforce. Industry can impart education with skills to raise labour productivity not only in the industry but also in the agricultural sector. If reforms do really happen as promised, the industry can create better-paying jobs in sync with raised labour productivity.

Questions are often raised about the political will and its absence in India. What about industrial will If the industry can take on the responsibility of educating the new generation, it will benefit both themselves and the nation. Management institutes can inculcate such out-of-the-box thinking among their students by making them aware of Indias macroeconomic reality and requirements.

The author is a professor of economics at Symbiosis Institute of Management Studies, Pune. shubhada.s@sims.edu