New Delhi

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. It said that the quality of education is a major component that puts the population at a disadvantage.

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Moody’s compared India’s current education outcome levels to those of Pakistan and Bangladesh, emphasising that better educational outcomes will help nations like India avoid potential job losses from digitalisation and Artificial Intelligence in the long run, especially in services like call centres and BPOs.

The rating agency stated in a report on sovereigns in South and Southeast Asia titled “Population growth alone will not drive credit benefits for emerging economies” that it anticipates continued population growth in the region to support economic expansion because the proportion of people who are working age will remain high relative to the proportion of people who are younger and older.

“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,” The Hindu quoted the report as saying.

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Moody’s report also mentioned that there exists a significant gap in the quality of education between Pakistan, Bangladesh and India in comparison to China and other countries in South East Asia. This leads to labour force “participation imbalances.”

The organization predicts that, the population of India, Bangladesh, Indonesia, Pakistan, the Philippines, and Vietnam are to grow by a third, thereby leading to a 40 per cent of the increase in people in working age, over the next 20 years.

According to Moody’s, differences in the proportion of the male and female populations who have completed upper secondary education are most prominent in India and Bangladesh. It is believed that variations in the total mean years of education reflect gender disparities in educational success.

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“The development of relevant engineering and programming expertise may actually 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 stated.

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