India has one of the youngest population in the world today and this will be so till about the year 2050. It is estimated that by the year 2020, India will have about 325 million people in the age group of 20 to 35 years, constituting 25 per cent of its population.
In comparison China will have about 308 million people in the same age group, constituting 21 per cent of its population.
''India will have a surplus manpower of 47 million by the year 2020, against a global manpower shortage of 39 million. This translates into a huge opportunity for India. In fact, India has the capability to create up to 36 million new direct jobs and opportunity to generate many more indirect jobs,'' says the industry body CII.
While the absolute numbers spell global opportunity, an important issue that needs immediate attention is employability of the graduating potential workforce.
Given the pace of economic growth especially in the services sector, the demand for skill sets is rising at a faster pace and the current education system is unable to support this demand thus leading to huge gap in skills set necessary to sustain the current levels of growth in services sector, CII points out.
The IT and the BPO sector are experiencing this at present and there can be future shortage in upcoming sectors like tourism, retail, financial and construction.
These shortages tend to fuel attrition rates, unprecedented salary increases and companies are forced to resort to unethical practices of poaching manpower.
For instance, the average attrition rates in BPO companies vary from 40 per cent to 60 per cent and annual salary increases are anywhere from 10 per cent to 20 per cent per annum.
''Such a trend for a sustained duration can erode India's competitiveness in the global market,'' the chamber says.
Consider the education system of India. While India has one of the largest number of universities (311) and colleges (16,000), just about three million are graduating each year out of a 120 million young people in the age group of 17 to 22 years.
Higher education is again accessible to just one per cent of the graduates. On the other hand, about 14 per cent of the total students in the US are from India. This itself speaks about the huge supply constraint for quality education.
The excessive regulation on the education system has led to rigid and inflexible course curriculum, which inturn has constrained development and advancement of skill sets.
In light of this, there is a need for further opening up of the foreign direct investment in the education systems and encourage more institutes to come up.
In order to address this constraint, CII Services Council recommends involvment of private sector in education and training.
''Activities pertaining to training teachers, building and updating curriculums, setting up recruitment centres etc are some of the possibilities.'' Second, there has to be a focus on increasing employability. More opportunities to be made available by private sector for providing on-the-job training to young men and women. Such on-the-job training will facilitate practical skills along with academic curriculum.
Third, there is a need for increasing capacities and capabilities. Capacities can only be increased through more number of education institutes and this is where the government and the private sector needs to work hand-in-hand for setting up many new institutes.
Capabilities demand more number of trained teachers and facilities made available for education and training, the council says.