India to Add 110 Million to Global Workforce

July 28, 2010
Study says manufacturing could create the jobs needed to absorb the rise if it's able to overhaul labor laws and invest in training.

India will likely provide the biggest increase to the global labor force over the next decade, adding an additional 110 million workers by 2020, a study by Goldman Sachs reported on July 28.

The rise in workers is equivalent to the current combined population of Britain and South Korea.

The projection for India contrasts with forecasts by the International Labor Organization that China's labor force will increase by just 15 million over the next decade while Japan's will fall by three million.

The changing demographics could add four percentage points of GDP growth to India's economy which is already expanding by more than 8%, the Goldman Sachs report added.

It said manufacturing could create the jobs needed to absorb the rise in the workforce, but the country will need a "massive overhaul of its archaic labor laws and (make) a heavy investment in education and skills training."

Firms employing over 100 workers cannot make layoffs without government permission, which reduces incentives to invest in skill development, discourages economies of scale and inhibits competitiveness, the report said.

"Unless India reforms its labor laws, the industrial growth that is needed to absorb labor will remain in the realm of potential," warned Tushar Poddar, chief India economist at Goldman Sachs.

The report estimated that between now and 2030, Indias labor force would mushroom by at least 210 million. The rise in the labor force will come from more of the population reaching working age and a greater number of women in the jobs market.

The country has a staggering 51% of its population of 1.1 billion people under the age of 25 and two-thirds under 35, according to government figures.

Experts say India's "youth bulge", seen lasting until 2050, could turn out to be its greatest asset -- or a demographic disaster if the country fails to provide education and jobs for its burgeoning workforce.

Copyright Agence France-Presse, 2010

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