In April, the Indian population would have surpassed the Chinese one according to the United Nations. It should continue to increase until 2063 to reach 1.7 billion people. This major increase would be a main advantage for the Indian economy provided that the country is able to absorb such a workforce.
In April, the labour market had not recovered the levels registered before the crisis caused by the COVID-19 pandemic. The unemployment rate remained high, at 8.1%. And it could have been underestimated because a part of the population is neither seeking a job, nor training. The employment rate is particularly low in India among young people and women.
Furthermore, the labour marketremains very heterogeneous. In rural areas, people have little trouble finding jobs. But in urban areas, the unemployment rate is higher.
The youth unemployment rate is a major concern. It can be mainly explained by insufficiently qualified or educated people unable to fulfil companies' needs. And school closures during the COVID-19 pandemic have exacerbated this phenomenon. The high youth unemployment rate, with a strong economic growth, is a growing concern. Some people think and even fear that the Indian demographic advantage might turn into a social risk.
The Indian industrial sector, contrary to the situation in China, is not able to absorb this abundant workforce. Most of jobs are linked to the agricultural sector which has difficulty generating major resources and above all which is less productive than the other sectors. The services sector, the most dynamic, shows a relatively low level of employment.
To benefit from its demographic advantage, India must implement major reforms to increase the levels of qualification among young people and to give women more access to education and employment.
