Global Times, China’s official media outlet, has said “without enough jobs, India’s current demographic dividend may instead turn into a burden”. In the article, Lin Minwang, a research fellow with the Institute of International Studies at Fudan University, argues that though India has made tremendous progress, it still has to go a long way to achieve economic growth. According to the author, India has advantageous age structure, “but a dialectical approach to this is necessary. The author suggests that to fully utilize this advantage, “timing and greater efforts are both important”. “India’s demographic advantage can only be brought into full play if it is combined with economic development.” Minwang states that Prime Minister Narendra Modi’s ‘Make In India’ has failed to produce desired results.
“The campaign hasn’t made that much progress, even after several years of efforts. Two factors are worth noting. First, India has missed the best time for embracing globalization….In the 1980s, China carried out its reform and opening-up to develop its labor-intensive manufacturing sector, giving full play to the comparative advantages of its labor force. At that time, the government of former prime minister Rajiv Gandhi guided the Indian economy toward the services sector, and the country became known as the “world’s office.” The difference between the original paths of economic development led to the different approaches to subsequent development. It is no easy task for the Modi government to make a readjustment now….Second, India still needs to make great efforts in improving its business environment in order to carry forward the “Make in India” initiative. The country ranked 100th in the World Bank’s Ease of Doing Business global rankings for 2018, up from 130th in 2017. However, compared with China’s ranking of 78th, India still has a long way to go.”
According to the author, although the Japanese government has been trying to transfer some industries to India, its business community is not very keen. “The construction of the high-speed railway line fashioned after Japan’s shinkansen system offers another example of the difficulty of doing business in India. A grand groundbreaking ceremony was held for the project in Ahmedabad last year, but the progress of land acquisition for it has been very slow,” the author argued.
Another key observation is that India’s demographic advantage may be greater in terms of quantity than quality. “The 2018 Human Development Report published by the UN Development Program ranked India at 130th. The ranking underlines India’s serious inadequacies in its basic education and medical systems. Without good education and training, it will be hard to improve the country’s employment situation. The country needs to launch more vocational skills training for the sake of the “Make in India” initiative.”
Another challenge facing the country is the development of artificial intelligence (AI), which may actually offset India’s demographic advantage. To a certain extent, the rise of AI is partly to do with the “low fertility trap” in some developed economies. Countries with aging populations have also come up with their own strategies for AI. India is trying to keep up with the AI development tide, but the question is: With the development of AI and automated manufacturing, how will India provide jobs and social security to its large population?
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