Your take on India becoming most populous and it was a matter of time. We will continue to grow as China shrinks, as the rest of the world shrinks. Will there be very soon a global talent scramble as well for specific skill sets and this whole problem of brain drain that we had several decades ago will re-emerge. There will be a global hunt for people who can do the job and we will have the population.
Absolutely. I think let me just put that in context as well. So, while our population has reached 1.4 billion, if you look at UN’s population projections, this is not going to stop here. So, our peak population is going to be 1.7 billion. This is going to be achieved in 2063. So, basically 40 years from now. This is an addition of about 300 million people. And we are really talking about accommodating the current US population into India’s borders over the next 40 years. So, this is a fundamental and a structural fact that we simply cannot ignore. It is going to shape how our society lives in the future. So, I basically see three predicaments it will touch upon.One, of course, is the jobs question. We will see a working age population increase of about 170 million people. And if we assume that the labour participation rate does not improve from here, then we are talking about new jobs, a requirement of about 70 million people. Now, either this comes, I mean, this problem gets solved as a combination of higher levels of outward migration, which you were referring to, or capital coming into the country so that these jobs get created here. So, now the pace at which this happens will completely depend on education as well as reforms. So, for example, if we only focus on education and not enough on reforms, then the pressure will increase towards outward migration.
So, my sense is that we need to see both higher focus on education so that better quality jobs are created in India and therefore reforms are done so that those jobs are getting created here rather than people having to migrate out. The second predicament that I see is the strain on natural resources. The report itself highlights that the richest 10% account for half of greenhouse emissions. So, in India’s case, I think the concern will be the increase in strain on the world’s as well as our own natural resources as our per capita income rises.
So, possibly, I mean, this gets solved through technology. So, maybe technology makes it more efficient and less polluting to travel, to make food and to use water and to live, etc. So, the second predicament could get solved through technology. Now, the third predicament that I see and is that the size of India’s elderly population is going to rise quite substantially for the first time in our independent history. So, people who are aged above 65, they made up 3% of our total population in the 1950s. Today, it is about 7% and when our population peaks 40 years from now, it is going to be 20%.
So, in absolute numbers, the total number of elderly people in India is about 100 billion people today, it is going to more than treble to about 345 million in 2063. So, it is going to have implications on healthcare, it is going to have implications on banking, on a whole host of things. So, some estimates indicate that the median age in the southern states as well as the western Indian states will probably go towards 45 years, which is the current median age in Europe.
So, my sense is that there are a lot of things that will change and businesses will have to adapt. So, there are a lot of implications to how demographies will shape, how we live and how we do business over the next 15 years.
The question about the quality of this population, and I know China’s being churlish when they say this, when they say quality matters more than quantity. But in terms of skilling people and ensuring that they add to the economy, how do we ensure that?
I just give a data point here. So, in 2010, there is a database called Barro-Lee, where they look at the number of years of schooling for people aged between 15 and 19. In India, the average schooling years is about eight, whereas it is about 10 to 11 in China and elsewhere. Now, my sense is that we would obviously sort of improve on that front. So, the primary schooling is definitely sort of improving, it is something that we will have to continue to work on. And, I mean, honestly, if you ask me, I mean, China, in a way is right.
It is about the total value added per worker that matters more than the total number of workers that are there. I mean, the GDP of the US is far larger than India’s, even though it has just 300 million people and we have 1.4 billion people. So, the quality of the labour does matter and that is what I think the other panellists are also referring to that we need to improve the skills. But I will add one more point here, it is not just about focussing on education and skills. If we just do that, yes, we will have a lot of skilled people. But if there are not enough reforms that make it easier to do business here, then capital is not going to come here, the factories are not going to get set up here. So, we will just have to go abroad and use those skill sets there. So, I think it is a combination of both ensuring that our skill set rises, as well as ensuring that capital comes into the country and those jobs get set up here rather than elsewhere.
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