India, South Asia ‘squandering demographic dividend’, World Bank says

“The danger is the demographic dividend is missed. It’s squandered,” said Franziska Ohnsorge, the World Bank’s chief economist for South Asia.

“If only they can be employed. It’s a fantastic opportunity to grow but until recently employment ratios have been falling.”

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During the period between 2000-2023, employment grew 1.7 per cent a year while the working-age population expanded 1.9 per cent a year, data included in the report showed.

In absolute terms, the region created an average of 10 million jobs a year when the working-age population was growing by an average of 19 million a year.

India’s central bank forecasts stronger growth of 7 per cent during this period.

In India, growth has rebounded strongly after the pandemic, driven by government spending and more recently the construction industry but private investment in Asia’s third-largest economy has remained weak, hurting job creation.

“Overall, during 2000–2023, employment growth was well below the average working-age population growth and the employment ratio declined.”

The World Bank, in its report, said South Asian nations need to address several policy weaknesses to accelerate job creation.

These include policies that encourage productive firms to hire workers, streamline labour and land market regulations and greater openness to international trade.