Facebook-Jio Deal: Can India Reap Its Demographic Dividends?

There could have not been a more apt time for social networking giant Facebook to invest $5.7 billion in Reliance Platforms Ltd, the parent company of Reliance Jio in India. While global economy has taken a beating with the ongoing COVID-19 pandemic, digital companies are raking in the moolah with a steep increase in internet usage, especially in India with over 560 million internet users, making it the second largest online market in the world, second only to China. With the country having more than 350 million Facebook users and a whooping 400 million WhatsApp users, this partnership between Facebook and Reliance is destined to make some noise in the coming days.


With e-commerce bigwigs like Amazon and Flipkart failing to cope up with the burgeoning market demands during this pandemic, it is but obvious for Facebook and WhatsApp to join hands with Reliance Jio to fill in the demand gap. This strategic move by Reliance provided the much-needed impetus for the Indian stock market during this grim pandemic season and abetting its own stock prices to jump an impressive 7.5 per cent on April 22.

As one would expect, this investment would help in reviving the Indian economy and creating more opportunities for thousands of Indians in the digital eco-system and allied sectors like logistics management. However, speculation is rife that a substantial part of investment would go towards consolidating RIL accounts and making it debt free. This masterstroke will help create enough room for the Reliance group to invest in promising companies during the next 6 to 12 months taking advantage of a global market slump, post COVID-19.

The current influx of investment through this deal hints at an untapped market, which would encourage many national and multi-national players to enter the fray. This would also have been the best opportunity for India to redeem the benefits of its demographic dividends for the next couple of decades had it equipped its human workforce with skill sets for the emerging market. However, it now seems most unlikely to reap the benefits of this “once in a life time opportunity” as the country has only been able to position itself as the largest and youngest consumerist nation as opposed to a productive workforce in sync with global requirements.

In order to reverse the trend and maximize benefits of the demographic profile for the next two decades in the wake of foreign investments, India needs to take proactive measures in a balanced manner to put in place mechanisms to encash a sizeable amount of the pie by allocating increased proportion of the GDP to create centre of excellence and train youths of the country by providing cutting edge vocational and technological education, thereby fostering the nation to reap the economic dividends of this millennium.




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