India's Working-Age Population To Rank Among World's Largest By 2030: McKinsey

India, China, and Indonesia are projected to have three of the largest working-age populations among G20 countries by 2030.

This indicates a potential shift in the economic landscape towards Eastern nations, said McKinsey's report on Driving Sustainable and Inclusive Growth in G20 Economies.

According to McKinsey report, the world's interdependence has deepened, particularly with the rise of digital and data flows that facilitate communication and knowledge exchange.

However, the current global economic situation suggests a possible new era where economic power has shifted towards the East, according to the report.

While the future may witness a change in economic centres, it is important to note that G20 economies currently exhibit diverse trends in sustainability and inclusion.

The report reveals that global debt has reached its highest levels since the end of World War II, with G20 countries now having a debt-to-gross domestic product ratio exceeding 300 per cent.

Additionally, the report highlights that income inequality within countries, as measured by the gap between the richest 10 per cent and the bottom 50 per cent, has reached its highest level since the beginning of the 20th century.

While China and India remain the primary drivers of growth within the G20, other nations excel in terms of inclusion and sustainability.

European countries, Japan, and Korea have made significant progress across various indicators, including life expectancy and the percentage of the population with bank accounts.

In terms of sustainability, emerging economies have the lowest per capita carbon emissions, while European countries have the lowest ratio of CO2 emissions to GDP.

The concept of economic empowerment is emphasised in the report. It stresses the importance of lifting a significant portion of the global population above the threshold of economic empowerment to improve performance in areas such as growth, inclusion, and sustainability.

It is worth noting that the line of economic empowerment differs from the World Bank's extreme poverty line.

"The concept of economic empowerment described in this research involves ensuring that everyone has the means to access the full range of basics," McKinsey said, reports NDTV.

The World Bank sets the extreme poverty line at $2.15 per person per day, but McKinsey cites other studies suggesting that in emerging economies, people can meet their basic needs and gain discretionary spending powers at $12 per person per day.

This is also the threshold where the risk of falling back into poverty decreases.

In advanced economies, the line of economic empowerment is $47 per person per day, taking into account the higher cost of living.

The report reveals that over half of the population in G20 economies, or 2.6 billion people, live below the line of economic empowerment.

This includes 100 million people living in extreme poverty, 2.2 billion people living under the line of economic empowerment in emerging economies and about 300 million people in advanced economies.

Globally, there are 4.7 billion people who fall into this category.

In 2020, 77 per cent of India's population (1.07 billion people) and 75 per cent of South Africa's population (4.4 million people) were below this line.

In countries like China, Mexico, Brazil, and Indonesia, over 50 per cent of the population live below the line of economic empowerment. In more developed economies in Europe and North America, about 20-30 per cent of the population falls below this line.

"Our analysis suggests that closing this empowerment gap in G20 economies would require a cumulative increase in spending on essentials to the tune of $21 trillion over the decade to 2030," McKinsey said.

India needs to spend $5.3 trillion between 2021 and 2030, which is equivalent to 13 per cent of its GDP during the decade, in order to bridge the empowerment gap.

Similarly, China requires $4.8 trillion during the same period to address these challenges.

While increased spending is important, it is not the only solution to bridging the sustainability and inclusion gap.

McKinsey emphasises the need for various efforts from both public and private sectors. To this effect, it has listed various public and private programmes.

McKinsey clarifies that their list of programmes is not exhaustive and should not be considered as policy recommendations.

"Each takes place in a particular economic and social context in a specific country, and the learnings are by definition not universally applicable," McKinsey said.

India stands out as a shining example in eight different areas, as mentioned in its various programmes.

One of its notable achievements is the improvement in financial inclusion and transparency in the delivery of government subsidies through initiatives like Jan Dhan accounts, Aadhaar, and mobile technology, commonly referred to as the JAM trinity.

Additionally, the government's targeted programmes for affordable housing have played a crucial role in making housing more accessible for lower and middle-income groups.

Furthermore, India's CoWin portal has been instrumental in establishing a comprehensive vaccination ecosystem, showcasing the country's commitment to healthcare and public welfare.

Healthcare: Apollo Hospitals has implemented an omnichannel end-to-end healthcare system that aims to enhance the quality, affordability, and accessibility of healthcare services.

Nutritional Crops: In an effort to promote the production and consumption of high-nutrition crops like millets, India has launched new initiatives. These initiatives aim to raise awareness about the benefits of such crops and increase their production both domestically and globally.

Renewables Push: India has made significant progress in expanding its solar energy capacity. Through government initiatives, the country has achieved a remarkable increase in solar capacity from 10 MW to over 60 GW in just 12 years. This remarkable growth has positioned India as an exemplary nation in the field of renewable energy.

Electric Vehicles: Ola Electric has emerged as a leading provider of electric two-wheelers, contributing to India's sustainable mobility goals. By offering electric alternatives to traditional petrol-powered vehicles, Ola Electric is helping reduce carbon emissions and promote a greener transportation system in the country.

Cleanliness: The waste management system transformation by Indore Municipal Corporation was an exemplar for circularity initiatives by cities around G20 economies.