In as much as an expanding knowledge base is crucial for a country’s economic growth, human resource development minister Kapil Sibal’s recent assertion—that India’s higher education sector will have 44 million enrolments by 2020—is a welcome sign.
India is slated to add around 120 million people to the working age segment in the same period, and education can, theoretically, make many of these people better workers, adding to their output and contributing towards economic growth.
Yet that is just one part of the story. Despite India being one of the largest higher education centres in the world— with almost 14 million students enrolled in more than 25,000 institutions—various studies have shown that size often doesn’t translate into employable quality.
The ensuing skill shortage and mismatch raise two problems: falling labour productivity and higher unemployment (the government currently pegs unemployment at close to 10%).
Added to these are the disruptive socio-political effects of a large but unemployed or non-gainfully employed body of people.
A causal point here is the nature of jobs created. In a speech earlier this year, Subir Gokarn, deputy governor of the Reserve Bank of India, showed how agriculture continues to have the largest share of the workforce even though industry and services clearly boost average labour productivity by as much as five times, and yield higher earnings.
This has implications for India’s external position as well. Gokarn points out that increases in India’s working age population in the next 20 years will dwarf that of China, which will likely see a decrease of 62 million in the 2020-30 period. Japan, another powerhouse, is already undergoing this process of ageing: Its working age population is expected to fall to 52 million by 2050—similar to that at the end of World War II.
Consequently, as Chinese labour becomes more expensive and countries such as Japan become more reliant on foreign workers, there will be an opportunity for India to become what Gokarn calls the “factory to the world”. But given the current ramshackle state of the country’s higher education sector, and the slow transition of labour from agriculture to other sectors, there is a risk India will miss the bus.
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