Population growth insufficient to strengthen India’s economy: Moody’s Investors Service
Despite India’s increasing labour force availability attributed to an increasing population, it will not be sufficient to strengthen the economy or improve fiscal outcomes, a report by Moody’s Investors Service indicated.
Emphasising that finer educational results will help countries like India avoid potential job losses from digitalisation and Artificial Intelligence in the long run, especially in services like call centres and BPOs, Moody’s bracketed India’s current education outcome levels with that of Pakistan and Bangladesh.
In a report on Sovereigns in South and Southeast Asia, titled ‘Population growth alone will not drive credit advantages for emerging economies’, the rating primarily said it expects continued population growth in the region to support economic expansion as working-age populations will remain enormous compared with younger and older citizens.
“However, the availability and scale of labour inputs alone will not drive materially stronger economic strength or better fiscal outcomes. Other conditions such as strong education and quality infrastructure are also key to reaping the benefits,” it noted.
“There remains a considerable gap in the quality of education between Pakistan, Bangladesh and India compared with China and other peers in South East Asia, which contributes to labour force participation imbalances,” Moody’s added.
Global population increase
India, Bangladesh, Indonesia, Pakistan, the Philippines and Vietnam will account for a third of the global population increase over the next 20 years and 40% of the uptick in the working-age population, the agency reckoned.
Remarking that divergences in the total mean years of schooling likely reflect gender disparities in educational achievement, Moody’s said the difference in the proportion of the male and female that has completed an upper secondary education is most pronounced in India and Bangladesh.
“The development of relevant engineering and programming expertise may provide employment opportunities, not only in technology-related fields but also in higher-value-added manufacturing given the increasingly complex products being produced in some of these large countries, for example, smartphones in India and electric vehicles in Vietnam,” the report said.
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