India, with its burgeoning population and progressive economic strategies, is emerging as a potential global labour capital. Key demographic and economic factors, coupled with targeted skill development initiatives and conducive government policies, are aligning to position India at the forefront of the global market.
Demographic and Economic Advantages
SPG Global highlights India’s demographic dividend as a key advantage. With a population exceeding 1.4 billion, India not only boasts the world’s largest youth population but also a massive labour force of over 678.6 million people. This demographic scenario, especially when juxtaposed with global labour shortages, places India in an enviable position. The Skill India Campaign is instrumental in harnessing this human resource potential, annually upskilling nearly 10 million youth. Additionally, increasing female workforce participation, currently at 24%, is pivotal for future growth.
Skill Development and Education Reforms
The Skill India Campaign and the Ministry for Skill Development and Entrepreneurship (MSDE) are at the heart of India’s skill development endeavours. According to a Nabard report, MSDE aims to train over 400 million people in various skills. The improvement in formal vocational/technical training, as evidenced by the Periodic Labour Force Survey (PLFS) FY21, indicates progress in equipping the Indian workforce with the necessary skills.
Government Policies and Global Economic Trends
India’s Ease of Doing Business (EoDB) focus and the Production Linked Incentive (PLI) Scheme are reshaping its economic landscape. These policies aim to make India a global manufacturing hub, attracting international investments. Globally, demographic changes, urbanisation, and the unique position of the Indian economy as a fast-growing entity amidst a global economic slowdown further enhance its prospects as a labour capital.
Despite these advantages, India faces challenges such as a lack of employment opportunities, job discrepancies, skill gaps, low female labour force participation, and regulatory hurdles. Addressing these requires a multifaceted approach, including further skill development, policy reforms, financial-sector reforms, socioeconomic inclusion, and support for MSMEs. These strategies could potentially transform India’s labour market, making it more inclusive and efficient.
India’s journey to becoming a global labour capital is not without its challenges. However, with its vast labour force, focused skill development initiatives, and supportive government policies, India is well on its way to realising this potential. As the nation continues to navigate and adapt to these challenges, it stands poised to redefine its role in the global labour landscape, harnessing its demographic dividend for sustainable economic growth.