US-India Global Review

62 US-INDIA GLOBAL REVIEW JANUARY-MARCH 2018 subsidiaries and branches. The former brain drain has turned into brain circulation.16 The Guardian carried an analysis titled “India Is an Emerging Geek Power.” India is now a low-cost com- mercial satellite launcher. By October 2015, it had launched 51 satellites for foreign countries, with payloads of less than 1,600 kilo- grams. To gain market share, it needs to develop payload capacity of over 3,000 kilograms, and build- ing that capacity is a work in progress.17 In 1991 India produced fewer than 50,000 engineers per year, mostly from government colleges. India’s economic success after 1991 has spurred the creation of thousands of private engineering colleges, with estimated admis- sions of 1.5 million students per year.18 The quality of the colleges is spotty, often dreadful. One oft- quoted rule of thumb is that half the graduates are useless, a quar- ter are usable, and a quarter are world-class. That outlook suggests massive waste. Yet producing up to a quarter million world-class engineers per year is a very solid base for future progress. In 1991 Indian politicians and industrialists feared that economic liberalization would mean the col- lapse of Indian industry or its con- version into subsidiaries of multi- national companies. Twenty-five years later, Indian companies not only have held their own but also have become multinationals in their own right. Dozens of Indian pharmaceutical companies — such as Sun Pharma, Cipla, Lupin, and Dr. Reddy’s Labs — are now multinationals with higher sales abroad than in India. Through acquisitions, ArcelorMittal became the biggest steel compa- ny in the world. The Tata Group acquired Corus Steel and Jaguar Land Rover and in the process became the largest private-sector employer in the United Kingdom. Today, the global slump in metals and the dumping by China have made many acquisitions that were completed in the boom years look like bad deals. Yet the fact remains that Indian companies are now viewed as having global manage- ment skills worthy of global takeovers. Ironically, although Tata has decided to sell its steel assets in the United Kingdom, one of the potential buyers is Liberty House, founded by another person of Indian origin, Sanjeev Gupta.19 India is about to reap a demo- graphic dividend that will give it a big edge over rivals. The number of working-age people between 15 and 60 is expected to rise by 280 million between 2013 and 2050, even as China’s workforce dwin- dles from 72 percent to 61 percent of a soon-to-be declining popula- tion.20 All the Asian tigers enjoyed a demographic dividend in their boom years, and all are aging now. India’s working-age population has started rising, yet participation in the workforce has actually fallen in recent years, especially for females. The reason is partly that more young people are now studying in high school and col- lege instead of working. It is partly because, as families rise from low-income to lower-middle- income status, they pull their women out of manual work as a mark of social superiority. Indeed, young women who do not work can expect to get a better class of husbands in the arranged mar- riages that dominate Indian social behavior. However, as families move up to upper-middle-class status, their daughters become college graduates and re-enter the workforce. That change means that India’s demographic dividend has been delayed, but will soon come, and its quality will improve because its workforce will be bet- ter educated. That holds promise for future GDP growth. As Table 5 shows, the male work participation rate has remained unchanged in rural areas and has risen marginally in urban areas since 1983. But the rural female participation rate has crashed from 32.7 percent in 2004-5 to 24.8 percent 2011-12, a huge withdrawal, whereas the urban female rate — always Source: S. Mahendra Dev, Suresh Tendulkar Lecture, 2016. 1983 1993-94 34.0 32.8 2011-12 24.8 32.7 2004-5 Table 5. Male and Female Work Participation Rates in India Years Rural Female 54.7 55.3 54.3 54.6 Rural Male 15.1 15.5 14.7 16.6 Urban Female 51.2 52.1 54.6 54.9 Urban Male 29.6 28.6 21.9 28.7 Total Female 53.9 54.5 54.4 54.7 Total Male