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FINALLY India has its own age cohort to flaunt. America's had a few, such as the baby-boomers from the '60s and the Vietnam generation of Flower Children. We did too. The midnight's children, for one. But the time has come to usher in the Liberalisation Children, characterised by a complete absence of guilt about making money and spending it. As such, they may not wait to be ushered in. They could simply walk in and take over. You would find a statistic sprayed all over this Outlook issue: 54 per cent of our population is below 25. Here is some more. Forty-five per cent of the population is below 19.
Rama Bijapurkar, Market Strategist "A transition is taking placeó Nehruvian brahmins to Naiduvian banias." Even the oldest of them were just seven when liberalisation happened. Six out of 10 households have at least one Liberalisation Child. In the next four to eight years, they'll hopefully become earning hands and influence household decisions. "This is the first non-socialist market economy generation, growing up in the thick of the information revolution, the connectivity boom, coalition politics, IT-enabled everything and the rise of the service economy. As this age cohort wends its way through life, it will be shaping markets," says Mumbai-based market strategy consultant Rama Bijapurkar.
India's young demography is already being acknowledged on the global stage. A recent Goldman Sachs study, 'Dreaming with brics: The Path to 2050', predicts that India will be the third largest economy after the US and China in 30 years. The report deems that India's working age population will continue to grow and stay at the peak for over a decade in the 2020s and 2030s before eventually declining. China's, conversely, will peak sooner, decline sharply thereafter. In the same period, many OECD countries will face workforce shortages. That will hurt both productivity and growth unless these countries outsource more and more economic activity to locations where skilled and young manpower is abundant -- very much the way to define India, which will have about 325 million people in the 25-35 age group by 2020.
"High growth in East Asia coincided with the high percentage of working age population," points out Subir V. Gokarn, chief economist, Crisil Centre for Economic Research. No surprises then that the National Council for Applied Economic Research (NCAER) says India will have 462 million people in the consuming and the very rich classes in 2006-07 with another Subir. K. Gokarn, Economist "Lack of job creation may find its manifestation in politics and stall reforms." 472 million as climbers, compared to 281 million in the first two categories and 429 million in the third during 2001-02. A high 70.5 per cent of our population will be 'middle income' in 2006-07 compared to 56.7 per cent in 1999-2000; the 'high income' group will rise to 11.7 per cent from 6.9 per cent.
Even as the Liberalisation Children boost economic growth, their defining characteristic would be consumption, due to factors ranging from the factual to the abstract. Even at a 6 per cent compounded annual growth based on purchasing power parity, market size will rise from $1,500 billion today to $2,700 billion by 2010 and $3,400 billion by 2015. "We'll be creating a huge market for all goods and services. It's a big-ticket opportunity," says Sunil K. Sinha, a consultant with NCAER. That market is already taking shape, as reflected in the forever rising demand for cellphones, TVs, cars, consumer credit, and other symbols of rising income. Promoting consumption would be factors like declining rates of consumer finance. However, the mindset of the Liberalisation Children would be vital. This generation is different from any before it because it has not seen the self-sacrifice of socialism, thinks of bank nationalisation and Emergency as pre-historic events, feasts on an atrociously large number of TV channels, and chats instead of conversing.It has not seen much of stability, in jobs or politics, and is happy without it.
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