Can India Seize the Demographic Advantage?

There is a need to strategically implement economic and industrial policies to seize the advantage of its burgeoning young workforce.

What is India’s Demographic Dividend?

• According to the United Nations Population Fund (UNFPA),a demographic dividend means the economic growth potential that can result from shifts in a population’s age structure.
• Median Age: The median age in India is 28 years, compared to 38 in China and the US, 43 in Western Europe, and 48 in Japan.
• Diversity in India’s States: While India is a young country, the status and pace of population aging vary among States.
  • Southern States, which are advanced in demographic transition, already have a higher percentage of older people.
  • The differences in age structure reflect differences in the economic development and health of the states.

Why there is an urgency for job creation?

• A rapidly growing number of young people.
• India’s economy and labour-force are undergoing a structural transformation.
• A significant shift away from agriculture has occurred in job seeking population.
• Rise in migration to seek non-agricultural jobs in towns and cities
• The student population, which is about a quarter of the country’s population is waiting to enter the labour market.

How can India take Advantage of the Demographic Dividend?

• Increase in Fiscal Space: Fiscal resources can be diverted from spending on children to investing in modern physical and human infrastructure that will increase the economic sustainability of India.
• Rise in Workforce: With more than 65% of the working-age population, India can rise as an economic superpower, supplying more than half of Asia’s potential workforce over the coming decades.
  • An increase in the Labour Force enhances the productivity of the economy.

Approach to seize Demographic Advantage:

• Upgrading Education Standards: Irrespective of rural or urban settings, the public school system must incorporate skilling, training, and vocational education in line with market demand.
• Fulfilling Health-Related Requirements: Increasing government spending on health, education, and other social sectors will be crucial to realizing the potential dividend from India’s young demography.
• Inter-Sectoral Collaborations: Moving forward towards safeguarding the futures of adolescents, it is imperative to put in place mechanisms for better inter-sectoral collaboration.
• Bridging Gender Gaps in Workforce: New skills and opportunities for women and girls befitting their participation in a 3 trillion-dollar economy are urgently needed. This can be done by:
  • Legally compulsory gender budgeting to analyze gender-disaggregated data and its impact on policies
  • Increasing childcare benefits
  • Boosting tax incentives for part-time work
• Federal Approach for Diverse States:Inter-ministerial coordination for strategic planning, investment, monitoring, and course correction should be an important feature of this governance arrangement.

• Low Human Development Parameters: India ranked 131^stposition by the United Nations Development Programme (UNDP) Human Development Index 2020, which is alarming
• Demographic structures are quite different among states.
• Dismal health sector
• Pan-India Growth strategies do not work
• Informal nature of the economy
• Jobless Growth