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India set to become Asia's largest labour force
10
Nov '15
With Asia's work force set to shrink over the coming decades, India is predicted to overtake China as the region's biggest source of workers.

According to a Bloomberg analysis of United Nations data, by 2050, the Asia Pacific region will have nearly 50 per cent of the world's total work force, down from the current 62 per cent.

The shifting patterns will see India account for 18.8 per cent of the global work force compared with 17.8 per cent today, toppling China from the top spot. China will account for 13 per cent, down from 20.9 per cent now.

The projections, which use working age population as a proxy for labor force, also show a push from Africa, with Nigeria jumping to third spot from ninth and Ethiopia and Congo making it to the top 10.

India's mammoth labor force is often referred to as its demographic dividend, a key asset on its way to achieving economic superpower status. But there's a lot of catching up to do: its per person income is just a fifth of China's.

One obvious problem for India will be finding jobs for such a large populace. The Bloomberg analysis says sketchy employment data in Asia's third-largest economy suggests the labor market is far from vibrant.

Employment too hasn't kept pace with the growing economy. A survey of selected companies including those in the leather, car and transportation sectors show employment growth fell to 64,000 new jobs in the first three months of the year from 117,000 in the previous quarter, and 158,000 before that. This is not what one would expect for an economy growing at 7 per cent.

India also suffers from a skills shortage. Only about 5 per cent of workers have formal skills training, compared with 96 per cent in South Korea. RBI Governor Raghuram Rajan called India's human capital his main medium-term concern.

"Yes we've got really smart computer engineers and we've got scientists who've put a satellite on its way to Mars but what we really are short of is in the middle layer: The good quality factory workers who have high-school degrees, who can do reasonable maths, the capable plumbers, the construction engineers who can build roads and bridges,'' Rajan said in an interview last week. "We have a lot of those because we are a populous country but we don't have enough. We need to create more of them in a hurry.''

Prime Minister Narendra Modi is racing to change that, with a new skills and entrepreneurship ministry and a policy to train 400 million workers by 2022.

Another question for India is when and if it will be ready to transition out of the informal jobs sector, which according to the government employs more than 90 per cent of the work force, among the highest rates in the world. That would mean higher tax revenue, which in turn could be spent on education. (SH)

Fibre2Fashion News Desk – India

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