New Delhi: India can boast of a quarter of the world’s workforce by 2025, provided the country harnesses the potential of its young and productive population, a study by staffing firm TeamLease Services said.
A conducive labor situation could also help push the nation’s per capita income to a $4,100 (around Rs. 187,554 at an exchange rate of Rs. 45.74 per dollar) by 2025, according to the “India Labor Report 2009,” released in partnership with IIJT Education.
The report, however, stated that a radical reform of the country’s labor market ecosystem (including labor demand, labor supply and labor laws) is required for converting individuals into productive people comprising the workforce.
The population of productive people is referred to as the demographic dividend of the country.
“If we harness this dividend by 2025, India will not only have 25 percent of the world’s total workforce, but our per capita income will be $4,100,” the report said.
“This would rise to $9,802 in 2040 and $20,836 in 2050. This will finally put poverty in the museum it belongs,” it added.
The report cautioned that the demographic dividend would become a disaster if India does not radically overhaul the labor ecosystem to enhance the productivity of the growing workforce.
It is expected that between 2010-20, UP, Bihar and MP would see the percentage of their population in the 15-59 age group increase by 40 percent, though they would only enjoy a 10 percent rise in income.
During the same period, Maharashtra, Gujarat, TN and Andhra Pradesh would account for 45 percent of the rise in GDP, but less than 20 per cent of the addition to the total workforce in the 15-59 age group. The study has also ranked states on the basis of improvement in their labor ecosystems in terms of state efforts in various areas like education and training, infrastructure, governance and the legal/regulatory structure.
Delhi and Gujarat have been ranked at fourth and fifth place respectively in the Labor Ecosystem rankings.