Good afternoon, ladies and gentlemen, students and scholars.
I am honored to be with you today. This is my first visit to the state of Rajasthan and to the beautiful and historic city of Jaipur. The echo of the past mixes freely here with the bustling reality of the present.
And as I look out among you, I see the future. You are the leaders of a future that is right before our eyes.
What will that future look like? What are your aspirations? What will your role be?
The outlook for India is good. Despite the challenging global economic environment, India’s is expected to grow by 7.5% in 2015. It is now the 4th largest economy in the world and with this among the most important players in the world.
With growth, India has made remarkable progress in reducing poverty. Since independence, life expectancy has more than doubled, literacy rates have increased fourfold and a large and growing middle class has emerged. Since 2005, more than 138 million people were lifted out of poverty. It is not surprising then that India has exceeded the first Millennium Development Goal to halve poverty.
But India has the potential to do more. Much more. It can be a true leader in this century, driving global growth and helping itself and the world eliminate poverty and increase shared prosperity. There are challenges, but most of these can be turned into opportunities.
First, India has one of the youngest populations in the world. One million youth will enter the labor market every month for the next two decades, soon to include many of you. By 2030, India will have the largest labor force in the world. This presents a huge potential, especially when many countries, including China will face challenges due to its aging population and declining labor force.
Like all of you, jobseekers want good jobs with the potential to realize their aspirations. With the right skills and opportunities, you can become part of India’s productive demographic dividend.
The second challenge is that too many Indians remain excluded from the benefits of economic growth purely based on the way they were born. Scheduled Castes and Scheduled Tribes have fewer opportunities, despite focused government attention to promote inclusion. Poverty remains stubbornly high among Scheduled Tribes at more than 40% compared to 22% for the rest of the country.
There are more than 600 million Indian women. More than the total population of the United States and my country, Indonesia, combined. 50 million young women between the ages of 15-24 are not employed, not in education and not in training. They are not participating in the economy to the degree they could and should.
India must maximize human development and leverage the aspirations of youth, women and vulnerable populations. In short, India needs to realize the power of aspirations by creating opportunities that are available to all.
I’d like to focus on three ways this can be done.
First, we need to prepare youth to be productive.
Second, we need to remove barriers to inclusion.
And, third, we need to help the economy to create good jobs.
On the first point, young people must be ready to contribute to India’s transformation. This starts from adequate nutrition in the first 1,000 days after birth – the most critical period for children’s cognitive development. India still has too many children suffering from malnutrition and too many mothers who don’t get the support they need to have healthy children. But only healthy learners can become productive adults. In fact, the damages from stunting are often irreversible. So to build a healthy and productive workforce the government will have to focus on the wellbeing of children under two years. And we are ready to help.
Quality education is critical, all the way through formal schooling, skill development and on-the-job training. Impressive progress has been made. More Indian children are going to school today than ever although challenges remain for disadvantage communities.
I had the opportunity to visit a primary school earlier today and was struck by the engagement of the students and preparation of teachers. India needs this kind of quality education at all levels if it is to lead globally.
We all know that it is important to go to school, but it is equally important to stay in school longer. Eight years are no longer enough to acquire the skills employers ask for. So India’s idea of ’10 is the new 8’ is the way to go.
Quality will also be central to the Prime Minister’s Skill India initiative. Employers should be a partner in training youth, and in making sure that skills are relevant for the needs of firms with jobs. At the World Bank Group we are pleased to respond to the Prime Minister’s request to contribute to this important initiative by mobilizing international knowledge and leveraging financing as desired.
Removing Barriers to Inclusion
The second way in which India can unleash its potential is by removing barriers to inclusion. India has a rich history and comprehensive set of rights-based laws addressing discrimination. Part of the effort now must be to uniformly enforce existing laws.
Recent laws represent further progress, especially for women’s economic inclusion. Women now inherit family property jointly, giving them more control over family assets. Mothers who benefited from the reform spent twice as much on their daughters’ education. They are more likely to have a bank account and even a latrine. World Bank research shows that the more women work, the more they influence decisions in the home and in society. Helping women reach their aspirations contributes to better development outcomes.
These are measurable development and economic benefits as a result of more gender equality. One particularly disturbing form of exclusion happens pre-birth. Today, only 918 girls are born for every 1000 boys. As a parent and grandparent of boys and girls I find it saddening to see that families feel that they simply cannot afford to have a daughter. We are therefore very encouraged by the government’s recently launched Beti Bachao, Beti Padhao (Save the Girl Child, Educate the Girl Child) program that aims to ensure survival, protection and education of the girl child.
The private sector benefits too from more gender equality. India passed a law mandating publicly listed companies to have at least one female member on their board. A recent global survey showed that firms that had greater representation of women at the top were less likely to be hit by scandals or fraud.
However, restrictions on employment remain. Women are not allowed to work in jobs – and I quote – “involving danger to life, health or morals.” These restrictions limit their employment choices, and eventually limit growth. There are promising changes. For example, in May this year, the Maharashtra state government announced that it would remove night-hour restrictions on women in factories.
As B. M. Ambedkar, the great Dalit leader and father of India’s constitution, said: “I measure the progress of a community by the degree of progress which women have achieved.” This is still a relevant statement today, and smart economics.
Creating Good Jobs
Third, I’d like to discuss the importance of creating good jobs. Jobs are the single most important factor in reducing poverty. Good jobs, jobs that pay higher wages with benefits require a higher level of cognitive and soft skills than in the past. Most new jobs in India are in the non-farm sector, and for the first time since independence, less than 50 percent of the total workforce is employed in agriculture.
But not all are benefitting from this shift. Labor force participation among women in India is low and has been declining. There are only 11 countries in the world with fewer women working, and even in South Asia India is on 6th position out of 8.
India needs more jobs and better jobs to reverse the trend. Yet, while the number of farming jobs has dropped quickly over the last few years, they have not been replaced by non-farm jobs for women.
Social norms, the burden of family care, lack of housing and safe transport can be some of the reasons why women do not accept certain jobs even if they are offered to them. These barriers must be removed through policy, such as introducing the successful Pink Auto taxi service for women run by women in Ranchi, Jharkhand.
What needs to be done to create good jobs for all?
The role of the private sector is very important. That’s why improving the business climate is critical to creating jobs. The Government’s Make in India program strategically focuses on doing just that, by focusing on skills development, by making labor markets more flexible, and by promoting private investment.
The strategy emphasizes improvement in investment climate including enhancing competitiveness. The Prime Minister has set an objective for India to be ranked among the top 50 countries on the World Bank’s ease-of-doing-business-rankings over the next 3 years. We look forward to supporting the government to reach this objective.
A second important area to help create employment opportunities is through financial inclusion. Including the “unbanked” in the traditional financial system and increasing access to credit is critical to improving economic opportunities and to achieving inclusive growth. When small and medium enterprises and entrepreneurs are able to borrow and invest efficiently, growth and new jobs will result.
The Prime Minister’s new National Financial Inclusion Mission seeks to change this. More than 125 million people got bank accounts in just 100 days. Next steps include ensuring that more women get accounts and that they are used to access safety nets through cash payments and savings through employment. India is an innovator in financial inclusion and has much to share with the world.
The third critical area for creating jobs is adapting and maintaining sound economic policies, improving governance and the effectiveness of public institutions. Including by fighting corruption.
In closing, I’d like to remind you of what’s possible. When all people, including women, Scheduled Castes and Scheduled Tribes and other minorities get a healthy start in life, are given access to quality education and skills, have the chance to work in a profession of their choice, have access to financial services and when they are protected, by law, from exclusionary practices, they are economically empowered and can become the engines of growth and prosperity. The global experience backs this claim.
You are in a favorable position. You are part of the world’s largest democracy with one of the youngest populations harboring limitless ambitions. You can be examples of what happens when there is greater equality of opportunity for a wider share of the population. You all are central to the story of Indian success in the 21st century. You are the future. Make it bright. Jai Hind!