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Study: India Must Educate Young Workforce to Avoid Potential Social Tensions

A new report is underlining the need for India to educate its massive young population, to ensure that it can participate in the country's growing economy. As Anjana Pasricha reports from New Delhi, experts are warning that failure to train the country's young work force will not only leave industries without adequate manpower, it could stoke deep social tensions.

Nearly half of India's billion-plus people are under the age of 25 - the youngest population in the world. Economists call it the demographic dividend - an opportunity to harness the skills and talent of young people, in a growing economy, at a time when most countries have aging populations.

But a new report released by the Confederation of Indian Industry and the Boston Consulting Group in New Delhi Thursday warns that India's young population could turn into a demographic disaster, if the country does not take immediate steps to train people poised to enter the work force.

Managing director of the Boston Consulting Group in India, Janmejaya Sinha, says that, on one hand, Indian industry is struggling to find qualified talent to fuel its expansion. On the other, nearly half of the current work force of nearly 484 million people continues to be illiterate.

"Forty percent of them are illiterate, another 40 percent of them, they are school dropouts. If you really look at it, there are more than 200 million people who are almost illiterate, not being able to participate in the real economy of the world, which is the opportunity of the 21st Century offers. Think about it then," said Sinha. "If these people have hopeless chances in life, what would they be led into?

The report, called India's Demographic Dilemma, says that India's fast-expanding services sector will face a shortfall of at least 750,000 engineers and other skilled personnel, in the next five years. It says the talent crunch will be massive in four high-growth sectors: information technology, banking, retail and health care. It says that failure to make skilled people available will keep most people confined to the agriculture sector, where earnings are meager.

The report stresses the need to revamp the education system in India, from the primary to the university level, and improve vocational training.

Education is mostly controlled by the government and the problems are huge. From villages to cities, the number of schools is too small and quality of education is poor. The school drop out rate is high.

Sinha, of Boston Consulting Group, says the private sector should be allowed to enter this crucial area.

"Even today, education is in the not-for-profit sector. There is no need for it to be in the not-for profit sector. If it was brought into the profit sector, it would become transparent, money would flow into it," added Sinha. "The government needs to increase its spending and there needs to be more accountability in how you actually doing this."

The report warns that a failure to make India's huge young population productive will mean that the country will have an army of young people "left behind," and ready to vent their frustration in what it predicts will be "violence and rage that may challenge the very fabric of our society."

In recent years, many experts have voiced fears that rising disparity between India's affluent and poor could stoke social tensions. The government has said it wants more inclusive growth and will try to ensure that the benefits of an expanding economy trickle down to the poor sections.