Story link: http://www.goodnewsindia.com/index.php/Supplement/article/at-futures-gates
When in Sep, 2000, GoodNewsIndia carried the story of India’s emerging good luck, it all seemed to lie far away in a foggy future. We were then going through a regime of sanctions imposed due to nuclear tests, a traumatic --though triumphal-- war in Kargil, political stability that seemed uncertain and a stock market scam that was rocking the nation.
Barely three years later, we are at the gates of a promising future and choking in good news. And we are being told that over a half of our population is under the age of 25. The two are not unrelated. The current stock market boom --fuelled by heavy inflows from overseas investors,a foreign currency reserve topping $100 billion, a stream of stories of white collar jobs from the West shifting to India can all be traced to one reason: confidence. Confidence that India is where the next big play is going to be staged and that it has the required players in its educated, bright young people.
Implications of a ‘young’ India are several. Simplistically it means, Indians are going to corner most of the wages for doing the world’s work. To explain further, unlike India, most other nations’ populations are older in average age, and they would require their work to be done by someone else—and young, educated, capable Indians will be ready. In this wired world that’s easily done without migration. It follows then, that young Indians with money to spend will be a huge market for all consumer needs, housing, leisure products and so on. By 2015, India will be the third largest economy in the world at about $3500 billion. No wonder that leading brands of the world are setting up shop here to cater to this soon to emerge, wealthy clientele.
China, our oft admired rival, may have botched its chances by ‘designing’ its population. For decades it forced a one-child norm and today it is becoming a society with a preponderance of older people. In India, whether it was our democracy or culture or our anarchic ways that caused it, families size themselves in a sort of ‘free-float’. And that freedom has resulted in this current advantage, that is likely to last another 20 years.
Two worries however can ruin this rosy picture. One, modern innovations lead to productivity increases and therefore to job losses. For possibly the first time in human history, growth is more inversely proportional to jobs creation. This can lead to rising unemployment for a while and thus to social turmoil. Also, new jobs that become available need greater skills and therefore the quality of education has to change down the line.
Second, --and this is as yet insufficiently realised-- governance and accountability have to improve. Banking and the stock markets have been well reformed but bureaucracy, judiciary and policing are way behind. An enlarging, well-to-do middle income group will demand fairer governance.
Demographic changes which are to India’s advantage happened by accident and not design. But good governance will not come about by accident. That will be the next big challenge.