India, traditionally seen as the jewel of the East, recently surpassed the UK to become the world’s 5th largest economy. Such an achievement fuels optimism about India’s potential as an economic powerhouse. However, a deeper dive reveals complex challenges juxtaposed against unprecedented opportunities.
The China Comparison
When assessing India’s economic progress, the inevitable comparison arises with its Asian neighbor, China. Historically, in 1980, India’s GDP was a promising 64% of China’s. Fast forward four decades, and this figure shrinks to a mere 17% by 2021. The vast gulf between the two nations is further illustrated when you consider that if India had kept pace with China, it would be boasting a GDP of $10 trillion, rather than the current $3.47 trillion.
The Demographic Dividend
One of India’s most significant advantages is its demographic profile. More than half of its populace is under 25, with two-thirds below 35. This youth bulge can be both a strength and a liability. While this promises a robust workforce for the future, the current youth unemployment rate stands alarmingly at 40%. When juxtaposed against the overall unemployment rate of 7.7%, it paints a stark picture of unfulfilled potential.
The Female Labor Conundrum
One area where India lags considerably is female labor force participation. Raising the female employment rate to match male levels would introduce an additional 235 million workers, a figure surpassing the combined workforce of the European Union. Countries with similar cultural backgrounds, like Bangladesh and Vietnam, have harnessed their female workforce more effectively. The core issue in India isn’t just cultural but also a lack of employment opportunities.
Education and Skill Development
A cornerstone of any nation’s progress is its investment in education. India grapples with an educational chasm. Despite a burgeoning young population, only 20% in the age bracket of 25 to 34 are involved in high-skill professions. The root cause can be traced back to the government’s spending on education, a meager 2% of its GDP. This underinvestment extends to…