The Telegraph
Since 1st March, 1999
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India has one of the youngest populations in the world and will soon have the largest workforce. Whether that will be an asset or a liability will depend on what we invest in this workforce today.

Given the open skies policy of the present government, there has been no looking back for the aviation industry. But the airline companies have hit an unexpected air pocket ' availability of trained personnel. With new players entering the field and expansion of the existing ones, the demand for trained manpower has shot up exponentially, although the supply has not grown to keep pace with the requirements. The carriers have started to mercilessly poach on each other's talent pool, so much so that Air Deccan has taken legal action against Kingfisher to pre-empt a huge exodus of trained personnel, while the few that Kingfisher recently recruited too have reportedly been exposed to overtures from Royal Airways.

And the airline industry is not an exception. Take the burgeoning oil and gas market for example. The industry is desperately short of trained manpower for its expansion activities. One of the key technical profiles in oil industry ' oil rig operators ' now commands a monthly salary of Rs 3 lakh and yet get poached.

The more...

In sector after sector, the shallowness of the skill-base of India's labour is being exposed as the country seeks to take a quantum leap in the global market. A large part of the projections for sustained economic growth in India are critically premised on the talent pool of its labour market, which was assumed to be large enough to cater to domestic requirements and take care of global requirements too. But the bottomless depths of the labour market are turning out to be a myth.

With an average age of 26, India is undoubtedly a younger country than China and will have the largest workforce in the world by 2020. Globally, there will eventually be a huge shortage of people of working age ' America being short by 17 million and even China suffering a shortfall of 10 million ' but India will have a huge surplus of 47 million of working age. But the numbers in themselves do not automatically translate into capacity.

...the merrier

In other Asian countries like South Korea and China, the bulge in the working age population brought rapid economic growth. But for India, the GDP growth keeps trotting at 6 to 7 per cent. For it to take advantage of the demographic growth, it needs to quickly make heavy investments in 'up-skilling' manpower. Universities such as Indira Gandhi National Open University are contemplating starting courses in cobbling, welding, cooking and so on, while the rural development ministry is introducing Livelihood Advancement Business Schools in 10 districts in the country for 5,000 poor youth. The government is also considering increasing Indian Training Institutes and universities are planning to give a vocational thrust to the curriculum. But the steps are still gradual though the situation needs a drastic overhaul.

India can never be a healthy economy if it continues to rest on a plinth of a narrow and skewed skill base. While the few trained personnel in the country will laugh all the way to the bank, companies paying out huge packages will make India less competitive and the bloated salary will eat into the heart of the cost arbitrage opportunity that the India's economy provides to Europe and North America. A limited skill base would mean a majority of the 600 million working population in 2025, labouring away at the lowest level of the value chain. The young will provide a fertile ground for recruitment by the extremists of the right and left. India may then find itself frying in a Nepal-like situation or reliving December 6, 1992.

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