As India moves towards becoming the third largest economy in the world, the country should have a long-term planning to ensure jobs for some 250 million (25 crore) youngsters expected to join the workforce in next three decades, experts have said.
Indian economy will be the third largest after China or the United States by 2050 with some suggesting that Indian and American economies will be almost bracketed, the financial and banking experts said at a meeting organised by the Indian Consulate in New York on Wednesday.
Charles Kaye, co-president of Warburg Pincus LLC and also an expert on Indian financial markets, said projections show that 250 million people would be added to the Indian workforce in 25 years at a time when China's workforce would stabilise at 60 million (6 crore).
He cautioned that India would need to ensure jobs for young people who join the workforce in increasing numbers.
Otherwise it could result in social tensions, he said. Amitabh Verma, joint secretary (banking) in ministry of finance, explained the steps taken by the government to make the financial and banking sector attractive for investors.
The steps include increasing competition, opening up the sector to private investors, improving efficiency, cutting down and eliminating the regulations that stifled their growth and taking steps to bring down the number of non performing loans, Verma said.
The experts agreed that India is on a high growth trajectory but suggested acceleration of the reforms process to enable the country take advantage of the current situation.
According to them, even if the projections don't materialise, the fact is that India would continue to have high growth rate for several years to come.
The mere size of the Indian economy would make it attractive for the investors, they said.
Most expressed the view that India's growing population is a major plus as over next few decades, it would provide a large part of the workforce as it stabilizes in China.
The workforces in the United States too would grow but it would be immigrant driven unlike in India where it would be population driven, they projected.
However they stressed on the need to improve infrastructure in India for furthering the foreign investment. Charles Kaye also identified poor infrastructure as the single biggest hurdle.
He specifically referred to the power sector in the country, saying it is not the capacity that matters but how much power goes on wires and how it is distributed.
He also called for India laying emphasis on education, healthcare, social issues and increasing the number of females in the labour force.
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