India is the sixth largest, and one of the fastest-growing economies in the world. It contributes almost 3.2% of the world’s GDP.
India’s economic strengths are:
- Demographics: India has a thriving young population – 67 per cent are aged 15-64. This is a major strength of the country’s economy and extremely important in propelling India’s economy in the right direction. For example, it influences interest and savings rates to be above average.
- Globalisation: The country’s English-speaking population are well placed to benefit from globalisation and organisations looking to outsource work easily.
- Start-up evolution: Many IT start-up hubs have created a revolution in India, especially in 2014-15, driving economic growth.
- Foreign capital: India has a huge workforce servicing foreign countries. 3.5% of India’s GDP is due to foreign payments.
- Tourism: A growing industry, the expectations are tourism will grow to 7.2% of India’s GDP by 2025.
These factors lowered poverty levels and increased GDP in the last decade. Now, more than ever, to succeed, the labour market requires attention. Driving inclusion and productivity through skills will strengthen India’s economy and boost employment and growth.
The major challenges and the skills we need
In a recent article from Bloomberg, India could become the world’s third-largest economy by 2026. In our base-case projections, GDP will grow from $2.7 trillion in 2019 to $5 trillion by 2025 and $8.4 trillion by 2030.
Some of the major challenges that India is facing are:
- Unskilled workers
- Lack of a skills-based education system
- Outdated curriculum
- Language barriers or soft skills
- Critical reasoning and creative thinking
- New tools and technology
Skills like flexibility and adaptability to learn what’s new and upcoming is essential in order to stay relevant.
Another major challenge that we all know, but sometimes ignore, is India’s economic inequality. In 2011, the CIA Factbook Placed India 95th out of 157 nations for inequality in the distribution of income. Stabilising economic inequality is essential to driving to the Indian economy forward.
Estimates presented in an article on Quartz India say that 92 million women are part of the Indian labour force. However, this participation is actually very low as the country’s working population stands at 395 million. Gender economic inequality is another challenge within Indian society.
Government initiatives to drive skill development among India’s youth
The Indian government launched a skill development initiative called ‘Skill India’ in 2015. Through this project, they aim to train over 400 million people with new skills, preparing them to enter different industries. A proper implementation will prove to be a great asset for the Indian economy for the future.
Scheme for Higher Education Youth in Apprenticeship and Skills (SHREYAS)
Citing apprenticeship as the bridge between academia and industries, SHREYAS ensures job opportunities via partnerships with various industries.
Industrial Training Institutes (ITIs)
ITIs received a modern makeover under the recommendations of the Skill Development and Entrepreneurship Ministry. This prepared them with the skills required for today and the future. Skill India gave the ITIs more recognition and elevated their status.
Pradhan Mantri Kaushal Vikas Yojana (PMKVY)
This flagship project of the government aids Skill India, which is the larger initiative. Their aims remain the same, but the approach is broader in the case of Skill India.
Conclusion: A commitment to investing responsibly
There is no doubt that India has the potential to bounce back as one of the world’s best economies in the near future. However, it will not happen unless skill development happens in the country on a large scale, such that it outweighs the existing challenges.
The lockdown has pushed educational institutes to rework their system. And, it is crucial to create new initiatives and collaborate with labour markets and research organisations. This will help in using institutional knowledge to form capable solutions.
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Author: Rakshit Manga, Sales Director, Certif-ID