Economy
Indian Demographic Dividend: The Need is for Quality, Not Just Numbers
With 800 Million persons below 35 years of age, the Indian work force is considered a demographic dividend. However, recent reports about un-employability of Indian youth have put a question mark on the real value of this dividend.  In November 2016, a report by the Federation of Indian Chambers of Commerce and Industry (FICCI) on higher education stated that almost 93% of graduates from the Master in Business Administration (MBA) and 80% from the engineering stream are not employable. These facts were also echoed by Aspiring Minds, an employability evaluation and certification company, in its national employability report, which stated that 80% of engineers remained unemployable in the software sector.  
 
The reasons for this dismal situation are not far to seek. Of late, getting a degree in India, albeit with some notable exceptions, has become synonymous to purchasing off-the-shelf merchandise. With money, obtaining any degree in the country is possible. Quite of few of these institutions do not even require regular teaching classes. Education too has piggy-backed itself on the online bandwagon. Increasing population has led to increasing demand for colleges. To meet the demand, colleges and universities have mushroomed in the country. People from all walks of life have entered the education business. Real estate tycoons, detergent manufactures, politicos and even sweet shop owners have set up universities and degree colleges. 
 
As education turned into a business and barriers of entry got measured only by financial ability rather than intellectual capability, the results were obvious. Good initiatives, like autonomy to colleges, also got misused. More courses were designed to accommodate larger numbers, regardless of the fact that these courses may be of no use for the future career of students. 
 
Contrast this with the situation elsewhere and we see stark differences. In China, if one wants to join a graduate degree course, there is a national college entrance examination (NCEE). Only those who qualify can move ahead to get a degree. Others, who cannot qualify, join vocational courses. Smaller countries like South Korea too have a similar system, where each person who wants to join a graduate course takes a college scholastic ability test. The results of such early screening are obviously reflecting on the financial growth of these countries. 
 
Against this backdrop, if the employability index in India has to improve, the current scenario of providing degrees to anyone who can afford it, barring a few exceptions, has to change. A common graduate eligibility examination needs to be made mandatory for all aspiring students to achieve a graduate degree, be it online or offline. Only those who clear this common graduate eligibility examination for graduate enrollment can take further examinations for entrance to engineering, commerce, medical or other professions. All others who are not successful could take up vocational courses from various Industrial Training Institutes (ITI’s) and National Skill Development centres in the country.  
 
Alongside screening for degree aspirants, institutions too, autonomous or otherwise, should have standardised courses, which reflect future skill requirements rather than help the finances of promoters.  The clamour for autonomy as far as administration is concerned is fine, but the coursework builds the academic capital of the country and hence needs to be closely monitored.  The formation of new institutions too should be mapped according to future workforce requirements rather than on grounds of financial avarice.
 
Our country’s potential has never been in doubt. With an estimated work force of 250 million in 2030, expected to take India to the position of the third largest economy in the world, changes in the current educational system need serious thought.  Else this promise of demographic dividend may remain a mirage. 
 
(Sanjay Pandey, an IPS officer, is the Deputy Commandant of Home Guards and deputy director of Civil Defence in Maharashtra. He holds a Masters' Degree in Public Administration from Harvard University, US and is a B Tech in Computer Science from the Indian Institute of Technology, Kanpur. Views expressed in this article are personal.)

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COMMENTS

PulseOn

5 months ago

Education is no more a charity. The faster people realise that true teachers too need to support their aspirations, meet their needs, the better it will be. Demographic dividend is a double edged sword. Job generation is in hands of private sector and that sector is not able to freely function with cronyism. If Tatas is affected, then there is no hope. Brain drain is only solution. Reservations does not help. It should be on basis of economic criteria solely, linking full family income and financial data to arrive at needy persons.

Simple Indian

6 months ago

Fine article. Education has indeed become a business, and it's hurting the education sector like never before. As Mr. Pandey states, there are various dividends from good education which certainly contribute to a country's economic progress. Sadly, in India, everything is controlled by politicians, and over time they have even diluted the once-coveted educational institutions like IITs and IIMs by creating many more such institutions but without the required safeguards against their misuse/abuse. Moreover, the reservation system is also a major factor for erosion of educated people in the country, with undeserving 'creamy layer' usurping the lion's share of quotas meant for truly deserving backward communities. Moreover, India should make everyone compete for jobs and promotions in jobs as equals. Only then will even those who get State-sponsorship for their education really value them. The flawed reservation policy has degraded not just our education system, but also our government mechanism, with more n more from the reserved category occupying govt jobs, but not doing their jobs sincerely, knowing fully well that their jobs are secure (and so are regular promotions) regardless of how they perform.

REPLY

Pradeep Kumar M Sreedharan

In Reply to Simple Indian 6 months ago

If reservation is the evil that waylaid India, then India should have been tops in Olympic Gold medals. But that isn't the case

Pradeep Kumar M Sreedharan

6 months ago

With 12 million entering workforce every year against job creation of about 3.5 lakhs, quality or otherwise, what we have at hand is a ticking time bomb. That is why they talk about Universal Basic Income.

By the way, reservation has been going on for thousands of years, in yesteryears it was enforced by not rule of law, but by pouring molten lead into the ears of the hapless

SuchindranathAiyerS

6 months ago

Quality not quantity?

Vote Banks are made from quantity not quality.

Naturally, an IPS Officer would have to tip toe around the elephant in the room which is "reservations" and the policy of making merit, competence and integrity subservient to the dregs of the ruling PANGOLIN* dispensation:

It was the season in March. My servants were begging for money to pay their children's school fees. It costs Rs. 18,000 per child in a Government School. This is what the parents earn in three months or more! (If they convert to Constitutionally protected and prospered Christianity, they would get better quality education, free for their children)

My Maternal Grand Father (K. Srinivasan) went to a Government School (Fort High School) Bangalore. Like all Government Schools in Maharaja's Mysore, it was free. He topped the ICS examination. (He opted instead for the Mysore Civil Service when his Highness came on horseback to request my Great Grand Father "Controller" Subba Raya Aiyer, who had been sent by Travancore for his integrity and competence to sort out the Mysore Treasury which had been in a mess). My Paternal Grand Father (B. S. Ramaswamy Aiyar) studied free at a Veda Pathashala in Bethelegundu (on the Highlands near Madurai). He topped the Madras Matriculation and the Jesuit Principal of St Joseph's College Tirchinopoly begged his father to send him to study free, and recommended him to Her Majesty's Secretary of State in London for appointment to the Indian Service of Engineers. His first salary of eight gold sovereigns exceeded the combined fortune of his native village. He could be and was generous to a large number of ungrateful, vicious, persons belonging to communities currently Constitutionally certified to be congenitally backward.


From a Great Power in 1947, India has been reduced to 135 out of 172 countries in Human and Social Development and 143 out of 172 countries in Internal Peace and Stability by 2016 (UNDP 2015). It is home to 30% of the World’s poor (World Bank 2016). There were more Bomb Blasts in India in 2016 than any other country. Twice as many as Iraq which came in a proud second.

This is the result of a vicious Constitution and polity that has waged relentless war on integrity, merit and competence. Sir. M. Vishweshwaraya, who raised the Mysore war cry of “Industrialize or Perish” in 1912 has been proved more than right on his resignation letter in 1918 by the villainous, sadistic, anti National PANGOLIN* rulers of the Republic of India. The idea of reservations was implemented by the British since 1921 as part of a comprehensive "Divide to rule" Policy. Ambedkar enlarged it to loot the resources of the Nation and apply them to exclusive benefit of his own community. Nehru blessed it just as he did so many other divisive policies such as partition because it helped him to capture and retain power to abuse and misuse as per his perversions. No ideal state can be achieved when founded on trash. Rose trees do not bloom from Parthanium roots.

Mysore is a classic example of what can happen when founded on ideals and what happens when those same ideals are destroyed. Mysore had universal primary and secondary education with health care and nutrition and NO reservations. Gandhi called it "Rama Rajya" though His Highness Krishna Raja Wadeyar preferred to call it "Camelot". When the British pushed "reservations" as part o their divide and rule policy into Mysore through the Maharaja, the Diwan, Sir M. Vishweshwaraya who has done more for ALL the people of Mysore than any man save Sir Mark Cubbon, resigned. The words in his resignation letter were as prophetic in its way as Sir Winston's prognosis for India. "Only the very best competence and integrity can help raise the wretched of the earth to the status of human beings. There is no short cut. You cannot elevate the wretched and expect them to do the work that the most talented and competent find arduous" Today Mysore has been more thoroughly trashed than any other state of the Indian Union because there was so much more to trash. India is a Constitutional Hypocracy, With inequality under law and exceptions to the rule of law, it is neither secular nor a democracy.

*Note: PANGOLIN: An enemy of India who believes in inequality under law, exceptions to the rule of law and persecution of some for the benefit of others. At present, the sole purpose of the Indian Republic, Constitutional or otherwise, is to pamper and provide for certain constitutionally preferred sections of society who the British found useful to hold and exploit India at the cost of those who the British hated and persecuted. The Pangolin is a creature that is unique to India and feeds on ants that are known in nature to be industrious and hard working if not quite as fruitful as bees who flee to better climes. (PANGOLIN is an acronym for the Periyar-Ambedkar-Nehru-Gandhi-Other (alien) Religions-Communist Consensus that usurped the British Mantle and has worn it with elan to loot, plunder, and rape India since 1921 and re write History and laws to their exclusive benefit since 1947)

Rahul Pande

6 months ago

Well written article.Things will not change till education is in the hands of politicians.

Parimal Shah

6 months ago

Also, we need a compulsory military training for at least 2 years without exceptions to inculcate the values and discipline.

ARUN KULKARNI

6 months ago

quite true Sir, 80% graduates and MBA's of institutes who are unemployable needs to be put on better use by retraining and upping their skill sets.Its dynamic world and we need capable and resourceful people around in the coming days to take this country forward.

Abhijit

6 months ago

Aspiring Minds, an employability evaluation and certification company, in its national Aspiring Minds report, which stated that 80% of engineers remained unemployable in the software sector. Why engineers are expected to be employed only in software sector?

Now, One More Excuse for Rating Agencies to Maintain India’s Low Rating
India has been languishing at the bottom of the investment grade ladder in the ratings universe. In fact, to put it on record, India has had a net rating upgrade only once in the last 25 years. With conflicting opinions in the Fiscal Responsibility and Budget Management (FRBM) Committee report, we may just have provided an excuse to these ratings agencies, says a research note. 
 
In the report, State Bank of India (SBI) says, "The interesting point is that even in the FRBM committee report there have been conflicting opinions about 60% target of debt to gross domestic product (GDP) ratio. We also second the opinion of the Chief Economic Advisor (CEA) about focusing on primary deficit, rather than targeting multiple indicators to maintain the sustainability of our fiscal position. In the end, we may have just played into the hands of rating agencies who maintain India has a high debt to GDP ratio. The rating agencies wanted an excuse, and we may have unintentionally provided them with one!"
 
 
One of the common arguments made by rating agencies for not upgrading India’s rating is India’s high debt to GDP ratio. At 69.5%, the agencies argue that this is on the higher side and effectively acts as an enabling factor of crowding out private investment. 
 
"This argument is however fundamentally flawed, for two reasons," SBI says, adding, "First there are a number of countries which are rated above India but have a significantly higher gross general government debt. In fact, most of these countries have debt positions which have been worsening over time but that has not affected their ratings much, maybe because of other macro fundamentals and the advantage of already being in the developed country bracket. India, on the other hand, has been consistently on the path of reducing its debt to GDP ratio to its present level from a peak of 84% in 2003. The General Government Debt as percentage of GDP was 69.5% for 2016 and if we look at only public debt it amounts to 42% of GDP of which only around 4% is the external debt."
 
 
"Second, it is the composition of the Government debt to GDP per se that matters for any discussion on debt solvency. For India, public debt is mostly internal. As a conscious strategy, issuance of external debt (denominated in foreign currency) is kept very low in India. Overseas investors account for only 4% in the total government bonds and the majority of the investment comes from scheduled commercial banks, insurance companies, Reserve Bank of India (RBI) and provident funds accounting for around 85%," it added.
 
SBI says, it is ironic that Japan which has a composition of domestic debt profile almost similar to India (bank and insurance companies account for 65% of the internal debt), but Japan is rated at A+ with a debt to GDP ratio of 239%.
 
 
"Our concern is however, despite robust macro fundamentals, India may not witness a rating upgrade soon. This is because with the FRBM Committee emphasizing on attaining 60% Debt to GDP ratio, by 2023, the rating agencies will get a reason to maintain the status quo, despite the other visible advances which India has made," SBI concluded in the report.

 

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COMMENTS

Simple Indian

6 months ago

Why does India have to depend so heavily on foreign investment when there is enough wealth with its people, who would willingly invest in Govt projects, if only there is greater transparency in how the Govt deploys the funds, and how quickly it executes public projects, mainly infrastructure related, so people get their rightful financial returns on investments. Govt had tried to tap into public private wealth for infrastructure bonds, but knowing how poor its record is in executing infra projects, people became wary of investing in Govt Bonds and such. In fact, the business environment in India is so volatile and unpredictable (thanks to political dithering / paralysis / mismanagement) that even Indian industrialists and entrepreneurs are investing in firms abroad instead of investing large sums in businesses within India. Such a situation has discouraged domestic manufacturing, giving Chinese goods a free market to tap into, which it has done fabulously over the years. No wonder India has run up a trade deficit of over $60 billion with China, over the years, while pretending to 'compete' with China all along. There's also the growing issue of populist schemes to appease sections of society, like the recent farmers' loan waiver by the State of UP, which is bound to put pressure on other States to follow suit, despite it being fiscally imprudent and unviable. Such anomalies in economic management ought to be addressed by Govt of India, and not cry about global rating agencies not upgrading its rating despite all its flaws. With the world being swept by a protectionism wave, India will find it harder to export its produce, which will also impact its forex reserves. So, India has a lot to fix if wants to be counted among global powers, instead of being counted among the global poor.

REPLY

Prashant Dhanavade

In Reply to Simple Indian 6 months ago

Perfectly summarized!

Parimal Shah

6 months ago

why should we bother?
If we see very objectively the countries that are/were printing money, so called quantitative easing (Blah!) should have been NON-INVESTMENT grade the moment they declared QE. So we know the gaenda of rating agency is in realty different from stated one.

SuchindranathAiyerS

6 months ago


I doubt that the ratings are done on the single dimension of debt to GDP ratio. What are the other factors?

REPLY

pandey ganesh

In Reply to SuchindranathAiyerS 6 months ago

Lobbying :-)

pandey ganesh

In Reply to SuchindranathAiyerS 6 months ago

Lobbying :-)

Less regulation, stable tax regime will invite more investments to India: Dell CFO
The Indian government needs to set up a stable tax framework and reduce the burden of regulation to attract more foreign investments, according to a top executive of Dell Technologies.
 
"We are hopeful that the new Goods and Services Tax regime should be helpful. What we want the government to do is set up a framework and environment that is stable so that we understand the rules and understand how to participate," Tom Sweet, Executive Vice President and Chief Financial Officer of Dell Technologies told a small group of reporters here.
 
While interacting with the reporters on the sidelines of Dell EMC World 2017 in this casino town, Sweet said he was satisfied with Dell's business in India, but any instability in the tax structure was detrimental to foreign investment.
 
"If the investor is not confident of what the tax structure is going to look like, or what economic framework the government is driving at, it is often difficult to make long term investment decisions in some of the countries."
 
He repeatedly mentioned that a proper tax regulatory environment, rule of law and intellectual property protection were some of the important areas that the government should pay more attention to.
 
But he was also laudatory about India's potential. "We are happy with the India business. We think its a great long-term opportunity for us. We have invested significantly in the business over there in enterprise, commercial and cloud service provider business," Sweet said.
 
Dell, the personal computer company had merged with EMC, the world's largest digital storage company last year to form Dell Technologies, with a total revenue of around $74 billion. 
 
Dell Technologies plans to invest $100 million every year in technology start-ups. Sweet said the company is mainly looking at start-ups based in the US and Israel and is also planning to "explore China".
 
Asked whether the company would be interested in investing in start-ups in India since the government is pushing this effort, Sweet said they will "keep an eye" on it. "We also realise that the pace of developments are picking up in India, so we will clearly keep an eye on that given the size of the market and opportunity," he said.
 
Speaking on the demonetisation drive that India went through, Sweet said it impacted the company's fourth quarter business in 2016.
 
"We got hit in the fourth quarter. When the country went through demonetisation activity it curtailed a lot of our consumer business. But once it was over I haven't seen any lingering effect of that."
 
Asked about the company's plans regarding hiring in the coming days as the US government was tightening the norms regarding employing foreign nationals, Sweet said: "We hire all over the globe today. It is a global economy and you need global talent, I do not want to get into the political environment of the visa issue but needless to say that we are also looking for good talent."
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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