India is now the most populous country in the world. It also has a very large young population. In the normal course of things, a younger population is an asset for any country’s economy for a simple reason: It means more working hands in both the short-term and the long-term. More working hands means more income and better living standards. On the other hand, countries with older populations struggle with a high ratio of dependents and are prone to either stagnation or even a decline in living standards.
While the general principle of a positive relationship between the younger population and economic well-being is true, it cannot be taken for granted in today’s world. Income generation has a stronger link with skilled labour than the size of a country’s population. A skilled workforce or lack of it also has a significant impact on a country’s position within the global economy. This is where India’s biggest challenge vis-à-vis exploiting its demographic dividend lies. The ASER 2023 report titled “Beyond Basics” released on Monday shows that even basic learning outcomes continue to be very poor among people in the 14–18 age group. On some fronts, there has been a deterioration compared to pre-pandemic levels. There is good reason to believe that the results of the ASER survey are representative of the skill sets (or lack of) of a very large cohort of rural students. With this kind of learning deficit, it is almost a given that they will never be able to land respectable jobs. The report also shows that our schools are not doing a good job in terms of equipping students with skill sets or providing them clarity with what could be a more appropriate career choice for them. If India has to realise its economic potential and, more importantly, prevent an explosion of discontent in its labour markets, this crisis has to be solved at the earliest. This is the most important policy challenge facing the country’s economy as well as politics.
Solving this challenge also requires a sober realisation that the time to draw solace from the rise in enrolment levels in the country is now over. Almost all data sources, including the ASER report, show that enrolments have been rising and becoming more equal in terms of gender or caste gaps. But laudable as that may be, it is clearly not enough from a forward-looking nation-building approach.
