Tap The Demographic Dividend Of India

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India has a unique distinction of possessing ‘3-D’s i.e. a vibrant Democracy, a demand from a 1.31 billion population and the most important a ‘Demographic dividend’ of youth population in India. The demographic dividend provides the advantage of having more working hands towards economically productive activities and the resultant economic prosperity of the nation. ‘Demographic dividend’ in India provides us with a window of opportunity to tap the economically productive manpower resources in a country towards emerging as a superpower in the world. It is to be understood that ‘demographic dividend’ is not a permanent phenomenon and needs proper tapping of this human resources potential through various skill development and job creation policies in the coming years.

Concept of Demographic Dividend-  United Nations Population Fund (UNFP) defines demographic dividend as the economic growth potential of a country that results from shifts in a population’s age structure, mainly when the share of the working-age population is larger than the dependent age-group share of the population. The advantages of demographic dividend phenomenon are delivered through four-fold mechanisms. Firstly, demographic dividend provides more working manpower resources to an economy which would boost the economic production of the nation. Secondly, due to decrease in dependent age population of a country, there is a more scope for individual savings and capital formation which could be contributed towards economic growth.

Thirdly, with fewer births, parents would be able to allocate more resources per child, leading to better educational and health outcomes. And lastly, in terms of economic growth, GDP per capita would be increased due to a decrease in the dependency ratio. To receive a demographic dividend, a country must go through a demographic transition where it switches from a largely rural agrarian economy with higher fertility and mortality rates to an urban industrial society characterized by lower fertility and mortality rates. In the initial stages of this transition, fertility rates fall, leading to a creation of labour force that is temporarily growing faster than the population dependent on it. All else being equal, per capita income grows more rapidly during this time too. This economic benefit is the first dividend received by a country that transits through the demographic transition.

Advantage India- In the international context, various countries had experienced the advantages of demographic dividend. During the last four decades, the countries of Asia and Latin America have been the main beneficiaries of the demographic dividend. Advanced countries of Europe, Japan and USA have an aging population presently because of low birth rates and low mortality rates. China’s one-child policy has reversed the demographic dividend it enjoyed since the mid 1960s, according to a World Bank global development report. Presently, more than half of India’s population is below 25 years age and more than 65 per cent below 35 years. By year 2020, the average age of an Indian will be approximately 29 years. By year 2020, India is set to become the world’s youngest country with 64 per cent of its population in the working age group.

With the countries from West, Japan and even China aging, this demographic potential offers India and its growing economy an unprecedented edge that economists believe could add a significant 2 percent growth rate to our GDP. The benefits of demographic dividend accrued from a demographic transition are neither automatic nor guaranteed. Any demographic dividend tapped by any country depends on whether the government implements the right policies in right areas like education, health, governance and economy. In addition, the amount of demographic dividend that a country receives depends on the level of productivity of young adults which in turn depends on the level of schooling, employment practices in a country, timing and frequency of child-bearing and economic policies of the nation. It is to be noted that despite of all the advantages of demographic dividend available to India, we have to handle a population of over 1.6 billion people by the year 2050 which would certainly affect ‘3E’s factors in a country i.e. education, employability and employment scenario of our country.

The overpopulation of India is acting as the curse for India, but the same population could be turned into an asset, provided we tap the potential in youth energy towards the cause of nation. Efforts focused on skill development and job creation towards economic growth of the nation would prove decisive in our march towards becoming a superpower. The present day demographic profile of India is advantageous vis-à-vis its economic rivals like China, USA, European countries and so on. The effective implementation of policies like Pradhan Mantri Kaushal Vikas Yojana, Digital India Mission, Make In India mission, etc are certainly the efforts in right direction.

(The author of this article, Lt Col (Dr) Satish Dhage, is an ex Army officer and has been qualified for IPS (Indian Police Services) through IPS LCE 2012. Presently, he is Director, MGM Institute of Competitive Exams Aurangabad. For any queries or feedback, he can be contacted on email id : drsatishdhage@gmail.com)

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