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Making Good use of Population Bonus key to Indian Economy

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  • Published
    16th Jul, 2022


India is projected to surpass China as the world’s most populous country in 2023, according to the 27th edition of the United Nations’ World Population Prospects, 2022.


Growth of Population in India:

  • The growth of population is the change in the number of people living in a particular area between two points in time. Population growth has two components namely; natural and induced.
    • Natural growth is analyzed by assessing the crude birth and death rates.
    • The induced components are explained by the volume of inward and outward movement of people in any given area.
  • The history of the growth of India's population can be divided into four distinct phases:
  1. stagnant growth stage (1901-1921)
  2. steady growth stage (1921-1951)
  3. rapid growth stage (1951- 1981)
  4. high growth with definite signs of slowing down (1981-2011)
  • It took 123 years for the population to double to 2 billion in 1927. Since then, the number of years taken to add a billion people has only dropped.
  • The last billion, which will take the population to 8 billion later this year, will be added in just 11 years.


Findings of the Report:

  • The world’s two most populous regions in 2022 were
    • Eastern and South-Eastern Asia, with 2.3 billion people, (29 percent of the global population),
    • Central and Southern Asia, with 2.1 billion (26 percent)
  • Half of the projected increase in global population up to 2050 will be concentrated in just eight countries, which includes India.
    • Other countries are the Democratic Republic of the Congo, Egypt, Ethiopia, Nigeria, Pakistan, the Philippines, and Tanzania.
  • China and India accounted for the largest populations in these regions, with more than 1.4 billion each in 2022.
  • Central and Southern Asia is expected to become the most populous region in the world by 2037.

Comparison with China:

  • The population of China was 1,144 million in 1990 compared with India’s at 861 million then.
  • The UN projections say that by 2050, India’s population will reach 1,668 million, far exceeding China’s declining population at 1,317 million.

The rising Population of India could be turned into an economic asset:

  • Larger Manpower: India's population is termed as a young population as the average age of the Indian population is around 25-26 years, which is considered a productive age.
  • India as a global Production Hub: India's young population, and its demographic dividend, gives India the potential to become a global production hub as well as a large consumer of goods and services.
  • The increasing size of India’s Consumer Market: The growth in India's consumer market would be primarily driven by a favorable population composition and increasing disposable income.
    • The economy is now significantly driven by rural demand due to rising income levels, changing lifestyles, habits, and tastes, increasing literacy levels, and increasing expectations of rural consumers.The consumption habits of the rural consumer are also gradually mirroring those of their urban counterparts.


  • Confederation of Indian Industry (CII)in its report on India's Demographic Dividend warns that there is an acute shortage of time and that India's working-age population is necessary but not sufficient for it to sustain economic growth.
  • The population as a liability: If India does not create enough jobs and its workers are not adequately prepared for those jobs, its demographic dividend may turn into a liability.
  • Short window of opportunity: It is expected that India's working-age population will start declining in the decade post-2050. Thus, 2020-50 provides India with a short window of opportunity to harness its demographic dividend.
  • Asymmetric demography: The growth in the working-age ratio is likely to be concentrated in some of India’s poorest states and the demographic dividend will be fully realized only if India can create gainful employment opportunities for this working-age population.
  • Lower Skilled workforce:The proportion of formally skilled workers as a percentage of the total workforce stands at 24 percent in China, 52 percent in the USA,68 percent in the UK, and 80 percent in Japan, against a paltry 3 percent in India.
  • Over exploitation of the natural resources: Rapid population explosion has led to the over-exploitation of natural resources and degradation of the environment.
  • Illegal activities: Many people turn towards illegal activities due to unemployment and poverty, which leads to the waste of manpower, both in illegal activities and in keeping these in check.
  • Malnutrition, Starvation, and Famine: When the availability of resources is scarce, starvation, malnutrition, along with ill health, and diseases caused by dietdeficiency such as rickets become more likely.
  • Jobless growth- There is mounting concern that future growth could turn out to be jobless due to de-industrialization, de-globalization, the fourth industrial revolution, and technological progress.

Required measures

  • High-quality school education, relevant higher education, and skill development aligned to industryneeds are some of the pre-requisites if India is to become an economic powerhouse that not only creates good quality jobs for its youth but also serves the rest of the world.
  • The youth may be offered skill vouchers and scholarships which can be linked to the national skill qualification framework. This can create an industry-ready model, thus leading to a transformation from a supply-based to a demand-based skill system.
  • Corporate investment in employee education and training can play a critical role to meet the demand for high-skilled workers. Thus, greater government-industry collaboration holds the key to skilling the burgeoning workforce.
  • Skill development to increase the employability of the young population. India’s labor force needs to be empowered with the right skills for the modern economy. The government has established the National Skill Development Corporation (NSDC) with the overall target of skilling/ up-skilling 500 million people in India by 2022.The recently announced ‘Agnipath Scheme’ is also expected togive a boost to the ‘skilled workforce’ in India.
  • Job Creation: The nation needs to create ten million jobs per year to absorb the addition of young people into the workforce. Schemes like Start-up India and Make in India, if implemented properly, would bring the desired result in the near future.
  • Promoting businesses’ interests and entrepreneurship would help in job creation to employ the large labor force.
  • Improvements in health, education, the macroeconomic environment, and good governance can go a long way toward attaining the demographic dividend.


The population can be our strength only when we have the resources and power to feedand provide the basic facilities, health care, and jobs. But in reality, we don’t have the necessary resources to do this. So, we must put our efforts into the prevention of further increase in the population. We need to strike a balance between quality and quantity. The demographic dividend of India will become a liability if the country does not produce enough jobs and the required workforce.India's young population, and its demographic dividend, give India the potential to become a global production hub as well as a large consumer of goods and services.

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