Let’s step up strategic efforts to mobilize India’s labour potential
Economic competitiveness requires us to make the most of our demographic-dividend opportunity as a key growth achiever
For years, India’s demographic transition has garnered significant attention. India is at a stage where population growth is expected to slow down markedly in the next two decades along with a substantial increase in the share of the working-age population, providing us with a demographic dividend opportunity window. While all stages of a demographic transition must be understood well to formulate policies accordingly, the stage wherein the working-age population forms the majority of the overall population is all the more important to consider. A larger reservoir of working-age people signifies a greater scope for labour-force mobilization. As per the National Sample Survey Office’s Periodic Labour Force Survey 2020-21, India’s labour force participation rate for all age groups is around 41.6% (57.5% for males, 25% for females). With our working-age population projected to grow by roughly 9.7 million per year from 2021 to 2031 and 4.2 million annually in the 2031-41 period, there is immense potential to mobilize the expanding working-age population and elevate labour force participation. When the age structure of the population shifts, especially with an expanded share of the working-age population, the economy can benefit from increased income, investment and gross domestic product (GDP) growth. However, to realize this demographic dividend, the population in the working-age bracket must find gainful employment. Mobilizing them into the workforce is key. The competitiveness framework can be a firm basis for India to understand the drivers of labour force mobilization.
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