India's young labour force to give it an edge over others: Felman

Mumbai, Mar 3 (UNI) In the coming years, India will benefit from a huge advantage compared to other countries - a young labour force, Dr Josh Felman, Resident Director of International Monetary Fund (IMF) said today.

''At a time when Japan and even China are aging rapidly, more than half of India's population is below the age of 25. In fact, India will account for one-quarter of the increase in the world's workforce over the next five years,'' said Dr Felman while addressing the first ICRIER-Nehru Centre Seminar on 'State of the Economy' held at Nehru Center here.

The seminar was chaired by Dr Vijay Kelkar, Chairman, IDFC Asset Management and who is also the General Body member, Nehru Centre.

Competition and opportunity have made companies more efficient and profitable, in turn spurring investment and exports and boosting economic growth, pointed out Dr Felman. Hence, he insisted that investment is now as important as consumption and in the process, the economy has been transformed. The export sector is now more important than agriculture and the industrial sector is blossoming. The economy may be taking off, he added.

However, translating the country's potential into sustained growth will require prudent macroeconomic policies, structural policy reforms and improvements in institutions, he emphasised. Terming the current annual Budget as 'a step in the right direction', Dr Felman stressed that maintaining macroeconomic stability requires more than a prudent budget as monetary policy also plays a vital role.

Dr Rajiv Kumar, Director, Indian Council for Research on International Economic Relations (ICRIER), termed growth, equity and inflation as the three key drivers, which were tackled very well by Finance Minister P Chidambaram in the Budget. He observed that raising the potential growth rate of the economy by encouraging investment was the way ahead.

Dr Kumar highlighted growth momentum, rising savings and investments, the dynamic private sector, benign external environment, demographic dividend and integration into global markets as the underlying strength of the Indian economy. The risks, he said were in areas like infrastructure bottlenecks, power, roads, education, labour market rigidities, mismatch of skills, the fiscal deficit and governance in terms of delivery of public goods and the investment climate.

UNI