India's Youth Challenge

Article excerpt

Facing a declining working-age population in advanced countries and China, India's growing youth population need not be a blessing. What Arvind Panagariya fails to consider In "The Global Professional" (Review, Winter 2011) is that India's youth bulge and their galloping aspirations can be a recipe for disaster.

Although the Indian economy has grown robustly in recent years, many Indians continue to be engaged in farming and the unorganized, low-wage services sector with poor working conditions. Higher education enrollment has grown more than seven percent per year recently, but the problem of graduate unemployment has worsened. The relatively small number of decent jobs created by the expanding information technology (IT) services and business-processing sectors masks the grim realities of high educated youth unemployment.

Though IT spinoffs and growth have created jobs in sectors like real estate, infrastructure, financial services, retail, and textiles, such sectors now require a different sort of skilled manpower: not necessarily college graduates, but mostly people with basic or intermediate skills. The country's education and training system is ill-equipped to cater to this demand.

With vocational training separated from higher education, the Indian system suffers from a "two-box disease." With no pathways between the two sectors, both suffer. The country's small vocational sector caters to less than five percent of students and suffers from poor demand due to low prestige and quality, while higher education does not equip graduates with the skills and competencies required by the labor market. Due to such discrepancies, universities and colleges churn out a growing number of unemployable, general studies graduates.

Mounting skills shortages coexist with rising graduate unemployment and underemployment, concerning employers, policy makers, and students alike. This phenomenon is by no means unique to India. But given the number of students involved and India's high-growth path, it takes a particularly acute form here. The country's current low wages, growth rate, and size can create many jobs across the skills spectrum, but merely putting more people into universities and colleges can exacerbate the situation unless the demographic expansion is directed to meet the country's skill needs in an integrated manner. …