The World Bank has warned that the South Asia region including India was not making use of its demographic dividend as the pace of job creation in the region fell well short of the growth in the working-age population, even as it projected a strong 6.0-6.1% growth for 2024-25 for the region in its South Asia regional update, Jobs for Resilience, released on Tuesday.
Observing that India’s employment growth was “well below” the average growth in its working age population for the 2000-23 period, the multilateral lender said consequently the country’s employment ratio had declined more than in any other country in the region except Nepal up till 2022. However, preliminary data suggested a 3-percentage point rebound in 2023, which had partially reversed the decline.
Noting that India’s economy was expected to post a “robust growth” of 7.5% in FY23/24, the lender said this expansion coupled with recoveries in Sri Lanka and Pakistan, was largely driving the strong numbers for the South Asian region.
Still, the region could have 16% higher output growth if the share of its working-age population that was employed was on a par with other EMDEs, said Franziska Ohnsorge, World Bank Chief Economist for South Asia.
“South Asia is failing right now to fully capitalise on its demographic dividend,” said Ms. Ohnsorge. “This is a missed opportunity,” she added.
The weak employment trends in the region were concentrated in non-agricultural sectors, the World Bank said, reflecting challenges in the institutional and economic climate, which had stifled the growth of businesses. Among its recommendations to encourage the growth of employment were supporting the participation of women in the economy, increasing access to finance, increasing openness to trade, easing financial sector regulations and improving education.
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Publish date : 2024-04-02 03:00:00
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