Demographically,
this will mean that India and China will have relatively much
younger population as a proportion of their total population
when compared to the developed world. It is startling to note
that even today, 71 % of Indians are below 34 years of age,
making it one of the youngest countries in the world in demographic
terms. The key underlying assumption of the Goldman Sachs
report, is that these economies will grow as per projections.
However, such growth is possible only if we create the right
institutional framework in terms of better schooling, rule
of law, health care facilities and macro economic stability.
This is where India
falters the most, especially when compared to its Asian
rival, China. For the better part of the past 5 decades,
we have been consistently failing on key social fronts -
in providing better schooling (both primary and higher education
sectors) and health care, whereas China has consistently
done far better than us on those fronts.
Apart
from education and health care, there are two other key
issues, which need to be urgently addressed by the policy
makers in India. One is the deeply flawed nature of our
higher education system. In any industrialized economy,
the maximum need is for semi-skilled workers at the bottom
(like electricians, plumbers, masons etc.), a mid-layer
of professional experts (like engineers, doctors etc.) followed
by a narrow band of super specialists at the top. In India,
we have exactly the opposite - we have what is known as
an "inverted pyramid" structure of manpower. We
have more number of engineers and doctors than technicians
and nurses! The tragedy is that even those with professional
degrees are very often poorly trained and are unemployable.
Yet, we continue to start more engineering and medical colleges
by the day, to produce more number of useless graduates!
The
other issue, which could potentially play havoc with the
rosy projections is that the rate of industrialization in
India continues to be dismally low. The normal transition
for any developing economy is from agriculture to industry
to services. The most developed nations will have predominantly
service economies like the US.
China
adopted the conventional path and has done all the right
things, i.e. massive investments in education, health care
and emphasis on industries with potential for mass employment.
That is the reason China was able to generate more than
100 million jobs in the past 20 years, while India hasn't
been able to generate even 10 million in the same time frame.
In fact some reports indicate that in India, the scale of
industrialization as well as percent of people employed
in industrial sector have declined in real terms in the
past decade. Unfortunately, the much-hyped high-technology
or the BPO segments cater to the select few and have absolutely
no scope for generating mass employment on the scale that
India requires. As a consequence, tens of millions of youngsters
have no productive avenues left for employment, and such
skewed growth will only lead to social anarchy. The killings
that we have witnessed recently in Assam and Bihar is just
one example of the potential anarchy the country will be
facing unless urgent remedial steps are undertaken.
If
we, as a nation have to live up to the potential projected
in the Goldman Sachs report, we have to undertake radical
restructuring of our educational system. The higher education
system has to be completely reoriented to produce more number
of people with marketable skills instead of the useless
numbers of mediocre hi-tech workers. We should also realize
that service sector alone will not be able to generate employment
opportunities for "Young India". Hence we need
a vibrant manufacturing sector. If we examine the history
of the most successful economies, it becomes evident that
they succeeded because they enhanced the productive capacities
of their young people, and provided ample opportunities
to realize their potential. That is the only realistic path
we can, and should, follow.
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