Growth beyond numbers

Whatever India’s short-term economic and competitiveness challenges, some optimists might look to future population growth to revive its fortunes. Given the country’s stubborn problems of poverty, health and education, India cannot take a demographic dividend for granted.

India’s working age population is set to grow by around 240 million by 2030, according to the United Nations. But unless it supports and equips these people properly, the country could miss its chance to turn this growth into higher productivity and improved economic performance.

Consider that only 23% of adult females work today, compared to 35% in Brazil. The United Nations Development Programme estimates that by lifting women’s participation in the workforce to 70%, India could help elevate its GDP growth rate by an annual 4.2%.

Improved healthcare is the first step in enhancing women’s life chances. That means more investment to support pregnancy, childbirth and child raising. Tamil Nadu has set an example, working with the World Bank. Virtually every birth now takes place in a healthcare facility. India also needs to lift its female participation in education. Only 40% of girls enrolled in higher education in 2010.

Once these twin challenges are addressed, business can more effectively involve women in the workplace. Hindustan Unilever has set an example, employing rural women to market and sell products in their communities.

There is also the broader challenge of India’s informal labour market. The informal non-farm sector accounts for over half of the country’s growth and employs over 90% of the workforce. But the exclusion of these people from formal employment and government services holds India back.

Technology will help. The Universal Identification (UID) scheme will increase access to private and public services, improve participation in employment and boost tax collection. Mobile communications will reach rural areas, whereas today only about 40% of earners hold bank accounts. Recent Accenture research with Vodafone estimates that an additional 292 million mobile phone connections in India by 2020 could result in a US$ 64 billion increase in agricultural income. Most of this would come from improving access to financial services and agricultural information. For instance, farmers – many of them women – could use credit or insurance to buy better fertilizers or manage payments when selling produce.

Millions more people don’t necessarily make millions more entrepreneurs or productive workers. While government continues to invest in core public services, business must make its own efforts and collaborate more effectively with the public sector, development organizations and non-profit players. Empowering women and informal workers will not only help drive India’s next wave of growth, but also open up new markets for those businesses that chose to invest in these communities.

Image: Indian children ride in a cart on the way home from school in the outskirts of New Delhi in this file picture taken. REUTERS/Pawel Kopcznski/Files

Author: David Thomlinson is Global Head of Geographic Strategy and Operations, Accenture,. He is attending the World Economic Forum on India and a panelist on the Growth beyond Numbers: How Can India Shining Be a Story for All? Session.