India will have to take care of some things
News agency Bloomberg has also listed some important points to make population a harbinger of economic progress. The agency has said that if India is to live up to the projections, it needs to work on four major fronts – urbanisation, infrastructure, up-skilling as well as broadening labor force and Focus will have to be on boosting manufacturing. According to Bloomberg, if India makes the expected progress on these fronts, nothing can stop it from taking advantage of the population and reshaping the global economy. Abhishek Gupta, senior India economist at Bloomberg Economics, says, “The country is young, English-speaking and a growing labor force is driving the government’s Make in India campaign. Global political-economic conditions are also in favor of India.
The city should remain very settled, but the facilities will also have to be increased
If India has to take advantage of its largest population in the world, then urbanization has to be done very systematically and at a fast pace. According to the International Energy Authority, by the year 2040, the population of India’s cities will increase to 27 billion. The growing glitz of the country’s cities is already visible. A major developer recently sold luxury homes worth around Rs 80 billion in Gurugram, adjacent to the capital Delhi. New skyscrapers are being built in the cities and a large population of the villages is moving to the cities in search of employment. But the condition of public services here is far from good, not even satisfactory. In the capital Delhi, there are mountains of garbage and air pollution remains a permanent problem. According to Yukon Huang, Senior Fellow of the Carnegie Endowment for International Peace, if India wants to make its cities modern and comfortable, it will have to follow the path of China and South Korea.
The pace of building infrastructure will have to be increased
Increasing urbanization will pave the way for economic progress only if there is massive work on infrastructure. Since Narendra Modi became the Prime Minister in 2014, very encouraging work is also being done in this direction. For example, since 2014, the number of domestic air passengers has almost doubled and the highway network across the country has increased more than one and a half times. In the field of technology, India is doing wonders under the leadership of PM Modi. Currently, India is one of the most advanced countries in the world in terms of digital infrastructure. Achievements like Aadhaar, GST, UPI are huge. But China is still ahead on many fronts. For example, phone calls and internet are very cheap in India, but China is still far ahead in terms of internet usage. Along with this, India is still far behind in terms of freight transportation by air and water. Priyank Kishore, director of economics at IMA Asia, an organization that runs a group forum for business leaders in Asia, says, “Infrastructure development in India could not take place due to lack of adequate investment for decades. Due to this the systems became weak, the over-reliance of freight transport was confined to the roads. On the other hand, due to lack of attention to skill development, there was also a huge shortage of skilled manpower.
Degrees will not work, skills are also needed
It is said that Indian universities are factories of the unemployed. You get degrees, but you don’t get skills. Because of this, companies all over the world complain that they do not get skilled employees in India. According to Wheebox, an advisory body to companies, half of the graduates in the country are not employable. Its effect is visible in the unemployment rate of the country which is currently at 7 percent. But the good thing is that the Modi government has increased the expenditure on education by 13 percent to Rs 1.1 lakh crore in this year’s budget. Its purpose is to promote digital education and expand education. However, a lot remains to be done in the matter of women’s education. According to the World Bank, between 2010 and 2020, the share of women in the working class in India decreased from 26 percent to 19 percent. In India, the share of women in the population is 48%, but their contribution to GDP is only 17%. In China this figure is 40 percent. A recent analysis by Bloomberg Economics states that if India works in this direction, by 2050, the country’s GDP can jump by about 33 percent.
Got a chance to become a manufacturing hub again
Four decades ago, China and India were basically agrarian based economies. But when the western world started shifting factories producing everything from toys to TVs and tools to other countries, China grabbed the opportunity while India missed out on the competition. Today, the share of manufacturing in China’s economy is more than 25 percent while in India it is only 14 percent. But the growing tussle between the US and China has once again opened the doors of opportunity to India. India is also looking eager to seize this opportunity. Apple’s three major Taiwanese suppliers have taken support of India to increase production and exports. Apple is making about 7 percent of its iPhone in India, which is one percent more than in 2021. Still there are some problems. As labor laws in India are yet to be simplified. India has not been able to build industrial parks on the scale and with the convenience that Bangladesh or Vietnam did.
Lots of hope, a little bit of fear too
Advances in areas such as urbanization, infrastructure, human development, and manufacturing are possible over decades. By 2050, India’s population will increase by 250 million and then it will be a country of 1.67 billion people. Today there are only five hospital beds per 10 thousand population in India. In China this figure is about eight times. Experts say that it will take decades for India to reach the level of today’s China. A large proportion of the youth in India’s population will not remain for very long. According to the United Nations, India’s population will start decreasing from 2047 and by the year 2100 it will reach 1 billion. According to the United Nations, the population of China will be 1.3 billion in 2050. If India continues to grow at around 7 per cent, by 2030 it will overtake Germany and Japan to become the world’s third largest economy.