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India- China BUSINESS Environment shift

However the population Roth rate of India Is faster than China. India is expected to overtake China before year 2050. The benefit that India has is that along with the population growth rate, the working class proportion Is also increasing and by the year 2025 Indian working age population will overtake that of China as demonstrated in the graph below. According to the Indian Labor Report, 300 million youth would enter the labor force by 2025, and 25 per cent of the world’s workers in the next three years would be Indians.

The growing population will also result in large consumption and a recent duty suggests that this is true even when the per capita income is low. India has managed to regain control on Its key macro issues such as current account deficit, fiscal deficit and the currency Is by and large under check and a slowdown In China is likely to work well for India economy. The dependency ratio in India Is also falling and Is expected to reach below 50% In the next decade. On the other hand, China’s dependency ratio is expected to increase from 39 % to 45 % over the next decade.

A lot of people

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in China will depend on the pelting working class for their survival; however in India most of the people will be self dependent. This Is one of the major factors which will lead to Indian’s growth and China’s growth will slope downwards after reaching the peak by the end of this decade. India will be the most Important destination for the global Investors due to this demographic dividend. However, India needs to focus on the poor employability of its workforce as recent reports suggest that the absorption of the Indian youth into the labor force Is not as high as one would expect.

This Is primarily because of the deficit n education attainment and health. T Off of the population will also have to be considered in relation to the larger working-age (16-59 years) population. Although the percentage of the 16-34 age group reaches its peak (35. 4%) in 2010 and tapers off from then onwards, the percentage of the 16-59 age group reaches its peak (64. 6%) only in 2035, and tapers off gradually over the next 15 years to 61. 65% in 2050 (still marginally higher than what it was in 2005, that is, 59. 5%).

Thus it is very clear that the demographic dividend will not last long, in any ease beyond 2050. India needs to take advantage of this demographic window in the next couple of decades and garner its benefits. Indian’s literacy rate is around 63% and China’s is 93%. The largest part of Indian’s schools is of poor quality. Teachers are inadequately prepared, weakly motivated, poorly paid, and frequently absent. The situation of the education system in India is weak and the overall quality of the higher education system is well below global standards and it has shown no significant sign of improving.

The government’s plans for expanding and upgrading Geiger education are inadequate and impractical. Though India is in a better position than China due to its advantage of demographic dividend; the above mentioned issues need to be taken care of in order to benefit from the opportunity for growth that the demographic dividend can provide. Testimonies Securities is primarily into stock broking business and it is very evident that the economic boom in both the countries will attract a lot of investors to invest in the growing market.

The metros and tier-I cities in India are already saturated in arms of investor potential due to the quality of education and awareness. Hence, Testimonies plans to focus on tier-2 and tier-3 cities where there is a huge potential among Seems and HEN customers. The idea is to capitalize on the growth of farming and small-scale industries where investors used to earlier focus on fixed-deposits and postal schemes. We are also planning to open various branches, create awareness and expand our sales team to these tier-2 and tier-3 cities, thus utilizing the upcoming youth of these cities to be part of the Indian growth.

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