The Editorial 28 Sept, 2022 - The Demographic Dividend : Harnessing the National Potential

GOVERNMENT POLICIES SOCIAL ISSUES POPULATION GOVERNMENT POLICIES AND INTERVENTIONS
28 Sep, 2022

NEWS HIGHLIGHTS 

Theme : Population & Associated Issues ; Government Policies & Interventions
Paper :GS -1, GS -2

The UN Report, World Population Prospects 2022,forecasts that the world population will touch 8 billion this year and rise to 9.8 billion in 2050.What is the immediate interest of India!

What is the demographic dividend?

  • Demographic dividend refers to the growth in an economy that is the result of a change in the age structure of a country’s population.
  • The change in age structure is typically brought on by a decline in fertility and mortality rates.
  • As fewer births are registered, the number of young dependents are smaller compared to the working population.

 TABLE OF CONTENT

  1. Context
  2. What is the demographic dividend?
  3. Measures required to reap the best of demographic dividend
  4. India’s demographic dividend
  5. Trends & Expectations on India’s Potential Workforce
  6. India - An Open Society
  7. Challenges Associated with Demographic Dividend in India 
  8. Examples of Asian Giants Harnessing  the Demographic Dividend
  9. Road Ahead

1. The Demographic Dividend : Harnessing the National Potential.

Theme : Population & Associated Issues ; Government Policies & Interventions

Paper : GS -1, GS -2

TABLE OF CONTENT

  1. Context
  2. What is the demographic dividend?
  3. Measures required to reap the best of demographic dividend
  4. India’s demographic dividend
  5. Trends & Expectations on India’s Potential Workforce
  6. India - An Open Society
  7. Challenges Associated with Demographic Dividend in India 
  8. Examples of Asian Giants Harnessing  the Demographic Dividend
  9. Road Ahead

Context :
The UN Report, World Population Prospects 2022,forecasts that the world population will touch 8 billion this year and rise to 9.8 billion in 2050.What is the immediate interest of India!

What is the demographic dividend?

  • Demographic dividend refers to the growth in an economy that is the result of a change in the age structure of a country’s population.
  • The change in age structure is typically brought on by a decline in fertility and mortality rates.
  • As fewer births are registered, the number of young dependents are smaller compared to the working population.
  • With fewer people to support and more people in the labor force, an economy’s resources are freed up and invested in other areas to accelerate a country's economic development.
  • The dividend which is available for a period of time is known as ‘the window of demographic opportunity’.

Measures required to reap the best of demographic dividend :

  • Invest more in children and adolescents through Quality School and Higher Education
  • Make health investments
  • Rights-based approach to make reproductive healthcare services accessible
  • Bridge Gender Inequality in Education
  • Address the diversity between States
  • Federal approach to governance reforms
  • Increase female workforce participation

India’s demographic dividend :

  • India has 62.5% of its population in the age group of 15-59 years which is ever increasing and will be at the peak around 2036 when it will reach approximately 65%.
  • These population parameters indicate an availability of demographic dividend in India, which started in 2005-06 and will last till 2055-56.
  • According to the Economic Survey 2018-19, India’s Demographic Dividend will peak around 2041, when the share of working-age,i.e. 20-59 years, population is expected to hit 59%.

Trends & Expectations on India’s Potential Workforce :

Deloitte’s Deloitte Insights( Sep 2017) expects India ‘s potential workforce to rise from 885 million to 1.08 billion people over the next two decades from today.

According to THE ECONOMIST as the Pandemic recedes,4 pillars will clearly support the growth in the next decade :- 

  • The forging of a single national market
  • The expansion of Industry owing to the renewable energy shift
  • Move in supply chains away from China,continued pre-eminence in IT
  • High-tech welfare safety net  for hundreds of millions.

India - An Open Society :

  • IT Technologies and Internet have matured exponentially day by day in India.Ranging from Video Conference to digitized payments everything has become better and cheaper.
  • COVID 19 Pandemic revolutionized Learning and transformed Indian Society at an astonishingly low cost.
  • Inadequacy of Indian Administrative Machinery is still far better than reforms of China.India did not impose an equivalent of China’s one Child policy that has seen China suffer the consequences of a prematurely aging Society with a skewed Gender Ratio.
  • India does not have a Hukou system which in China tethers rural folk to rural parts creating a deep divide and disincentivizing migration to urban areas.

Challenges Associated with Demographic Dividend in India :

  • Lack of skills
  • Poor performance in human development parameters
  • The dominance of the informal economy
  • Jobless growth

Examples of Asian Giants Harnessing  the Demographic Dividend :

Japanese Demographic Dividend :

  • Japan was among the first major economies to experience rapid growth because of changing population structure. The country’s demographic-dividend phase lasted from 1964 to 2004.
  • An analysis of the first 10 years since this phase shows how such a shift in the population structure can propel growth. In five of these years, Japan grew in double digits; the growth rate was above 8% in two years, and a little less than 6% in one. Growth slid below 5% in only two of these 10 years.

Chinese Demographic Dividend :

  • China entered this stage in 1994 — 16 years after Deng Xiaoping’s economic reforms started in December 1978. Although its growth accelerated immediately after the reforms, the years of demographic dividend helped sustain this rate for a very long period.
  • In the 16 years between 1978 and 1994 (post-reform, pre-dividend) China saw eight years of double-digit growth. In the 18 years since 1994 there have been only two years when China could not cross the 8% growth mark.

Road Ahead :

  • India is on the right side of demographic transition that provides golden opportunity for its rapid socio-economic development, if policymakers align the developmental policies with this demographic shift.
  • To reap the demographic dividend, proper investment in human capital is needed by focussing on education, skill development and healthcare facilities.
  • This demographic transition also brings complex challenges with it. If the increased workforce is not sufficiently skilled, educated and provided gainful employment, we would be facing demographic disaster instead.
  • By learning from global approaches from countries such as Japan and Korea and designing solutions considering the domestic complexities, we would be able to reap the benefits of demographic dividend.