India is the country with the highest economic growth in the world. In the second quarter of 2023 alone, the economy of Hindustan has grown by more than 7%, making the country predicted to become the new motor of the world economy after China.
However, there are new problems that threaten. Facts show that labor force participation in a country with a population of 1.4 billion is only 51%.
“While this figure will increase over time, our current projections show that the labor force in India will remain smaller than China’s until the late 2040s,” Oxford said in a report last week quoted by CNBC International, Friday ( 29/9 /2023).
According to the economic advisory firm, India must achieve a participation rate of more than 70% to achieve the same workforce size as China by 2030.
Although most of India’s population is of working age, those aged between 15 and 64 account for only 51% of the country’s workforce, compared with 76% in China.
“India’s population is currently estimated at 1.4 billion and is expected to peak at just under 1.7 billion in the mid-2060s. China’s population will decline to 1.1 billion by then,” the report said.
It is not just India’s low labor levels that are causing problems, its workforce productivity is also another challenge. Oxford Economics attributes this to the lack of adequate standards of education and health services in the country.
“India’s average level of human capital, which determines the productivity of its workforce and is determined by a range of educational and health outcomes, currently also ranks behind China and most of its regional neighbors,” the report added.
Data from the World Economic Forum shows that India’s literacy rate in 2018 reached 74%, lagging behind China’s 97%. Although not an alarming figure, the quality of education in this country is still weak.
Regarding health standards, life expectancy at birth in India reached 70.9 years in 2019, while in China it was 77.7 years, according to the Oxford report. The report highlights that there are only 7.3 doctors per 10,000 people in India, compared to 23.9 doctors per 10,000 people in China.
“Raising funds is very important to improve the quality of education and health services in this country,” explained Oxford again.
Education spending currently amounts to just 2.9% of India’s GDP, lagging behind the government’s target of 6% by 2020. And although government spending on healthcare has risen to 2.1% of GDP this year, it is still lower than many other countries.
Source : CNBC