365 MN Indians Reach Employment age by 2025

April 7, 2010 · Author: · Category: general 

By 2025E, 365 mn people would have reached employment age. We anticipate 11 mn people will look for employment every year. India has historically created employment to the tune of 6.5-7 mn per year, implying India can face significant challenges in employment creation should growth derail even slightly. India will be young for long, relative to most countries.

Educated yes, employable no – Despite India’s investment in education beginning to pay off, we worry about educated unemployment. We expect to see a significant number of highly educated to be unemployed or under-employed. Typically, the more educated a person, the more likely he/she is to wait for the right employment opportunity

Internal migration set to continue – With labor supply coming in rural India and employment opportunities being created in
urban or more prosperous areas, we expect the trend of migration to continue. We note that the current political climate in India is heating up on the issue of internal migration.

Wealth and income concentration – The contribution of services in terms of value add in the GDP has gone up significantly and
we note that employment generation has not risen in tandem. Also, the share of employment of the organized sector has remained stagnant (at 14%) while its share of value-add has grown significantly (to 45% of GDP).

Gamechangers – IT-like phenomena: Information Technology changed the game for employment in southern India in the past two decades. We would track initiatives that rejuvenate agricultural employment and promote skill development, investment in
infrastructure and rural entrepreneurship. Progress on these counts would increase access to opportunity by creating more income rather than redistributing it—containing social unrest and migration.


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