A demographic dividend is very unlikely to accrue to India anytime soon, as a large share of the country’s youth lacks education as well as jobs to deliver this productivity, says a report.
Economic theory suggests that when the proportion of young people in a region increases, a significant boost to economic growth should happen. However, in case of India this is not likely to meterialise, Ambit Capital said in a research note.
“Even as India’s demographic profile today is similar to that of the US in 1960, contrary to popular belief – a demographic dividend is very unlikely to accrue to India anytime soon,” Ambit Capital said in a research note.
This is mainly because a large share of India’s youth today lacks education and jobs to deliver this productivity. To add to the imbalance, the country’s gender ratio is skewed significantly in favour of men.
The lethal combination of a youthful demographic structure but no education, no jobs and no women is most pronounced in India’s Northern Belt.
In contrast the southern states’ labour markets are in better shape as compared to the Northern belt, which suffers from an over-supply of under-skilled labour.
The report noted that “India as a whole is significantly better off on economic as well as social indicators than the northern belt”.
Despite the rapid economic advancement India experienced over the nineties, its progress on the social indicators front has been appalling.
Whilst only six countries today have economies that are larger than that of India’s, the country is at the bottom of the league tables on social indicators with only 58 countries having an HDI rank worse than that of India’s, the report said.