Bridging skill gap

India's GDP  growth declined to 5.4% in the second quarter of 2024-25, down from 8.1% in the same quarter last year, according to NSO data. The slowdown was chiefly a result of declining growth in manufacturing, mining, and consumption. However, this doesn’t detract from India’s status as the fastest growing economy in the world, surpassing even China. The sustained growth over the past few decades has already made the country the world's fifth-largest economy and  it is expected to become the third-largest by 2030. But for this to become a reality, India has to keep outperforming the rest of the world. And the country has demonstrated that it has the potential to beat the expectations.

One of India's biggest advantages is that its large domestic market makes it an attractive destination for foreign capital. The country has also been bidding for the foreign capital inflows. More so, after the disruption in global supply chains triggered by the Ukraine war with many major multinational corporations looking for new destinations to set up their businesses. India has been expected to become a go-to place for major global corporations. However, this has not happened to the desirable extent. Because of China's continuing competitive advantages, the businesses have not moved from the country. 

But India too has its many advantages as a democracy. It has a vast English speaking population,  and a burgeoning middle class. Recently, India has also overtaken China as the world's most populous nation, according to United Nations data. The country's demographic profile, therefore, presents a competitive edge in terms of workforce, with a relatively young population. But this young population needs jobs which only a growing economy can provide. So, the government needs to ensure that while the economy grows, it shouldn’t be jobless growth.

And the joblessness now isn’t just a result of the lack of jobs but also the lack of skills. As the more advanced digital technology alters the nature of global economy, the consequent new jobs need new technological skills that aren’t available yet at the scale they are needed.  In turn, these skills are also needed for the growth of the economy. India's growth story hinges on bridging the skill gap to transform its demographic dividend into economic strength.