Can India Seize the Demographic Advantage?
17th Nov, 2022
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.
- India’s working-age population has numerically outstripped its non-working-age population.
- India’s total fertility rate (TFR) has declined from 2.2 in 2015-16 to 2.0 in 2019-21 (NFHS-5).
- India will account for 20 per cent of the worldwide increase in the working-age population over the two decades from 2020.
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 131stposition 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