Can India reap the benefit of its demographic dividend – APSC Mains Essay
(Essay submitted in APSC Mains Essay Writing Contest 2019 – Essay Topics for week 2)
Can India reap the benefit of its demographic dividend?
By Bandeep Rabha
Demographic dividend is the phenomenon of accelerated economic growth which can occur when there is a high percentage of working age population relative to the non-working age population. A high percentage of young people engaged in work can fetch a high growth of economy of a country as well as increase its per capita income. But the working age people need to be equipping with required skills.
The developed countries had already witnessed their demographic dividend in the past and now the countries from Latin America and Asia are reaping benefits of the demographic dividend.
India is undergoing a major demographic transition with more than 60 percentage of its youth in the working age group at present and is soon going to attain peak demographic dividend. By 2020, the median age in India will be 28 compared to 37 in China. While China has already exploited its demographic dividend, India is yet to exploit.
As observed by United Nations People Fund (UNFPA) window of opportunity of demographic dividend is highest for India which is 50 years from 2005-06 to 2055-56. And the window is available at different time for different states because states population policy differed. This longer span of demographic dividend window will be a booster for economic growth of India.
Seeing at the statistics of India’s population pyramid shift, one can tell that India will have a presence of stable labour force. There will be more investment on human and physical infrastructure than on children and schools. Young women workforce would increase. The increase working people means more savings in an economy and bulging of the middle class society. These all will lead to higher consumption and the rate of GDP of India will increase.
But demographic dividend can also transform into curse if India cannot create enough jobs to absorb the working age population. De-industrialization, de-globalization, the fourth industrial revolution and technological progress could affect the job scenario to great extent. India’s human capital base is very low and in future it might not be able to reap benefits of the demographic dividend. A large number of youth in India are illiterate, unskilled and there are social and gender discrimination which hinders in human capital formation.
The question is whether India can reap the benefits of the demographic dividend. The female labour force participation in India has fallen to 26% in 2018 from 36.7% in 2005, says a Deloitte report. Given that female makes about half of India’s population, their extremely low participation make a negative effect to the growth of country’s economy. World Bank 2017 report observed that only 2.3 percentage of the total workforce has formal skill training. Given that the working age population grows by an estimated 23 million a year, only 42-43% joins the labour force.
Demographic dividend is time bounded and India’s policy maker should promote human capital formation by providing high quality education, reduce poverty, and achieve gender equality. Skill development and job creation needs to be prime priority if India wants to reap the demographic dividend benefits.
[ 500 Words ]
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