As a population, we have a lot going for us right now. In fact, the term ‘upwardly mobile’ is starting to include more people each year than it did before. A lot of this has to do with the fact that we are a young population. But like all good things, this will not be forever either.
The number of people below the age of 24 comprised over 50 per cent of the population in 2011. This figure is going to look very different in 2036 - that’s just 14 years from now. India’s Sub-24 population is going to make up less than 35 per cent of the total population, and that’s going to render a very different reality for us collectively.
Last year, around Rs 93,224 crore was earmarked for education with 2020’s National Education Policy, but with no allowances for upskilling of an already educated population. This year’s Budget could be a step to change that.
Educating and upskilling are the only ways to ensure that an ageing population becomes an asset in the future. So, how can the 2022 Budget help?
Improve digital infrastructure
Much has changed in the education landscape since the pandemic. If nothing, the growth of the edtech sector stands testament to this fact. Even in non-urban sectors, there’s been a marked digitalisation of education. Manufacturers of digital equipment like laptops, phones, webcams, and internet service providing hardware could be given incentives to ramp up their supply to schools and other educational institutions.
Grant concessions on GST for education sector
The average price of laptops between 2016 and 2021 has gone up by nearly 50 per cent. Subsidies on these new-age essentials for education might ease the strain significantly.
Auxiliary services like rent, food contracts, housekeeping, security, and transportation services for higher education constitute around 20-30 per cent of the cost of education. An additional 18 per cent GST on these costs brings up the overall cost by 6-7 per cent. Should the Budget exempt educational institutes from this, the benefit will be passed on to the students in the form of reduced fees, making higher education even more accessible.
Save on Capital Gains
Some people are contesting for the tax on long-term capital gains to be zero per cent to encourage long-term investments. Another way to achieve the same end and kill two birds with one stone would be to allow complete exemption from LTCG tax if these gains are reinvested in higher education.
This can be done if these investments in higher education are earmarked from the beginning. With checks and balances in place to prevent any misuse, this could help ease the burden of tax and encourage higher education in the country.
Upskill educated population
There’s little doubt that upskilling has a positive impact on the country’s GDP. A 2021 study by the World Economic Forum hypothesized that India’s GDP could go up by Rs 40 trillion if upskilled.
Recent reports say that by 2022, about 54 percent of the world’s population will need upskilling or even re-skilling, in some cases. Seeing that 80 percent of our engineering talent stands unemployable at this point, according to studies, confirms this understanding that our educated population needs as much attention to get them job-ready.
The pandemic has also shown the importance of technology. In fact, fintech as an industry was the highest-funded sector in 2021, with ed-tech and health-tech following closely behind. This along with the sudden boom in demand for tech talent confirms its place in the future of this country’s workforce.
In this light, it becomes clear that even the unemployed population will need tech training in order for them to be job-ready in the decade to come.
Help from CSR
Large corporations in India are already armed with the means and know-how to enable most of these changes through CSR initiatives. Corporates could make it a part of their initiatives to boost education infrastructure in less developed areas of the country, and by helping to upskill as many as they can.
In under two decades, we may be catching up with the West with an aging population as something to offset. An older population could simply mean declining productivity. However, an aging but future-ready population might be far more agile, and ready for any economic conditions that the future may hold.
The writer is Co-Founder, Fi Neo-Bank. Views are personal.