How data points to India’s demographic opportunity in manufacturing, strengths & weaknesses
I am sick of listening about India’s demographic advantages since last one decade, however India is not able to use it in its formal manufacturing sector. Majority of factories want to remain small employing informal contract workers.
Analysts keep saying India is in a great place to exploit and build a manufacturing base but we’ve not been able to capitalise on this opportunities for years now. I really hope we develop manufacturing industry because services is already strong, so a strong manufacturing and services industry will make us a total powerhouse.
I think the new labour codes may be implemented anytime soon, most states (~25 states) have finalized draft labour codes. So it should be implemented by this year.
India's or Bangladesh's or Pakistan's demographic liability.
And China's demographic advantage.
It's all about education skill and more technical education.
women not participating in the workforce is one of the reasons of this gloomy situation. Creating jobs for the demographic bulge was the most important task of the Modi govt - it has failed. Infact, this is the most important issue of national importance.
As China embraced capitalist economy, Indians choose to import ch low quality goods from China and palm them off to Indian customers, rather than strengthen the manufacturing base. Go nment policies did not help the manufacturers in the least. Shortsighted go nment and businessmen are guilty of setting back India's strengths. Even now, India should occupy the space vacated by China in basic manufacturing sector.
Well, I would differ from the idea of increasing penetration of foreign production houses, most manufacturing-intensive industries are reducing their labor force for automation which makes the labor-intensive markets much more vulnerable.
There has been no significant improvement in the quality of life in our cities even in a decade. Roads continue to be pathetic, there are no pavements or decent parks, no planning, poorly planned public transit, poor waste management and so on. As SG mentioned in an earlier CTC, our cities are urban villages and nothing else. Why does this matter to the the discussion at hand? People who are employed in these high tech jobs are mostly in cities and they would leave the country at the drop of a hat.
Upcoming much delayed New labour law is directed towards enlarging manufacturing sectors ...
On paper this looks good. However India has a very complicated business and tax environment.
Skill development for manufacturing industry was given high priority by the UPA, but shelved by the Modi Go nment probably with a feeling that India would always be a laggard in manufacturing sector and hence, 'why bother'.
As India at this point can not even provide job opportunities for the highest educated and most skilled people in the workforce, a larger workforce in future is only going to be a nightmare not a blessing.
Imagine if we implement labor and farm laws and we will be at the top of the world.
It's an opportunity that cannot be wasted. Modi is the best bet if he is able to stitch together all people of the country for it's collective benefit.
We killed manufacturing long back
We cannot underestimate China here, even though their working age population is declining, it will replace low skilled workers with industrial bots.
Japan can become more inclusive in terms of allowing a substantial amount of people from other Asian countries to work in its market. It can counter the problem of employability in Japan and other Asian countries. Everyone will find it beneficial.
Right now is definitely a window of opportunity. Labor costs in China are getting too high, and China’s recent policies have made companies consider it a risky place to invest. There’s definitely a huge hole to fill. The question is whether India will put in place policies in place that make companies think “I can make money here”.
There is no advantage .. if people dont acquire skills .. the question is do people want to acquire skills and work or not ? depend on incentives
Very good analysis overall, in workforce , you presented that almost 50% in employability category are not looking for job? Reason? Is it anything to do with freebies?
This human resource capital advantage is been available for a while now. Unfortunately, nothing much has happened till now. More needs to be done. How investors can be pulled into investing in some of these sectors needs to be discussed on a policy basis.
Our demographic advantage needs to be utilised in the next 2 decades and that is our best shot to move to a middle income country. If we fail in that, it will have terrible consequences for our children
Automation and AI will reduce the demand of manual labour. So it doesn't matter if chinese have lesser manoower than india....they wll have geater automation and greater productivity. More manpower of india will remain redundant.
Considering that industries have the highest power tariffs, difficulties in land acquisition, inability of go nment to push forward labour reforms- manufacturing is not going to move here.
Excellent report, and it seems that India has all the elements in favour of becomes a manufacturing powerhouse. I’m sure Modi go nment is poised to use this opportunity to further develop.
I understand focus on Pk when discussing geopo itics but when it comes geoeconomics, I'd like to see more comparison with Indonesia, Vietnam. Where are global tech giants going to build their next manufacturing plant? Indonesia and Vietnam feature as competitors to India... IMO, Would be good to focus on them
Question should be why employment opportunities are not being generated despite growth?
I differ with you here- manufacturing technology also has moved due to automation. So I doubt that manufacturing can drive employment
High tech and manufacturing is essential but we need to look around us. Ukraine war has thought the world on how critical to be self sufficient. Being most populous country, we first need to address food security. This brings agri reforms as the critical. Doubling farmers income can not just be slogan
Focus should be on manufacturing goods exports should be our target. All state go nments should have specially created manufacturing zones to attract manufacture and push exports.why like China we cannot be an manufacturing and export driven economy.