| Income gaps, unskilled youth pose challenge to India growth: WEF |
GURGAON (India) Widening income gaps and rising numbers of unskilled young people could derail India’s economic growth, speakers at a high-profile economic conference warned on Thursday.
While the middle class has ballooned as India has become one of the world’s fastest-growing economies, more than 40 per cent of its 1.2 billion population still survive on less than $1.25 a day, according to the World Bank.
“India is at a crossroads,” Rajat Nag, managing director-general at the Asian Development Bank, told the World Economic Forum (WEF) on India in Gurgaon, a satellite city of New Delhi that is a mix of luxury malls, high-rises and slums.
“India is expected to become an economic powerhouse but the growth story may be become unhinged if marginalisation continues,” he said at the meeting of business leaders, government officials and social activists.
Later, Indian Trade Minister Anand Sharma said India will abide the decision to open retail and other sectors to wider foreign investment.
“What we have done is irreversible — what is cast in stone cannot be set aside,” Sharma told the WEF delegates.
Inequality in earnings has doubled over the past two decades, a recent Organisation for Economic Cooperation and Development report said, with the top 10 per cent of wage-earners making 12 times more than the bottom 10 per cent.
In addition, India’s statistics on health, malnutrition and infant mortality are worse than those for some countries in sub-Saharan Africa, with the nation accounting for 20 per cent of the world’s infant deaths, experts noted. “The risk of so many Indian children growing up physically and mentally stunted undermines the potential for growth,” said Jasmine Whitbread, chief executive of Save the Children International,
Rising income disparities and India’s inadequate education system are some of the most worrying challenges ahead.
India, which spends less than two per cent of its gross domestic product on education, must “face up to the fact that if it wants to succeed in the world, it has got to invest more in education”, said Gordon Brown, UN Special Envoy for Global Education and Britain’s former prime minister.
By the end of the decade, the average age of an Indian will be 29 — representing what population experts call the “demographic dividend” of young workers that the government hopes will help power the economy.
Trade minister Anand Sharma said the nation now needs jobs for 12 to 14 million Indians who join the workforce annually — but a yawning skills gap and a lack of vocational training and of teachers is a problem. “India is full of young people — but we don’t have the trainers,” said Shantanu Prakash, chairman of Educom Solutions India, the nation’s largest private educator.
More than half of graduate engineers “are unemployed because of low-quality teachers”, said Naresh Gupta, a senior executive of software firm Adobe Systems.
The prospect of a demographic disaster — millions of ill-educated young people unable to find jobs — is a danger that looms over the country, speakers said.
Agence France-Presse
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