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People & Their
Problems
New Delhi, 7 March 2015
Demographic Dividend
TAP OPPURTUNITY OR PERISH
By Dr S Saraswathi
(Former Director, ICSSR, New Delhi)
Finance
Minister Arun Jaitley, while announcing a plan recently to launch the National
Skills Mission through Skill Development and Entrepreneurship Ministry,
referred to the demographic advantage the country is presently having over many
others. Population specialists have been estimating changes in the
age-structure expected in coming decades and have predicted years ago, the very
advantageous demographic situation the country is bound to meet.
According to a
Report of the Registrar-General issued in 2007, working age-group (15-59 years)
will increase from 57.7% in 2001 to 64.3% by 2026. Child dependency is expected
to lessen considerably from 35.3% in 2001 to 27.7% in 2016. Age structure of
the population is such that the bulge seen in the working age-group stands in
marked contrast to the ageing population of many western countries.
Youth bulge is
sharpest now at 15-24 age-group, according to the latest data coming from the
Registrar-General. Working-age population (15-64 years) constitutes 63.4% of
the total as against 60% in 2001. Dependency ratio of children (0-14 years) and
the old (65-100 years) to the working group has come down to 0.5%.
Jaitley issued
a statement which betrays a mixture of positive and negative elements hidden in
the age classification of India’s
population. He stated: “India is one of
the youngest nations in the world with more than 54% of the total population
below 25 years of age. Yet today, less than 5% of our potential workforce gets
formal skill training to be employable and stay employable”.
The Deen Dayal
Upadhyaya Grameen Yojana was launched to enhance the employability of rural
youth which is identified as the key to unlocking India’s demographic dividend. In
the current budget, a sum of Rs.1,500 crore is allocated to this programme.
Demographic
dividend is a term used to denote the economic growth that may result from changes
in the age structure of a country’s population favouring large manpower
resources. The changes are brought about by a demographic transition of people
from living short lives and having large families (high birth and death rates) to
living long lives and having small families (low birth and low death rates).
The consequences of this transition in population statistics are reflected in the
growing working-age population and declining dependent population comprising
children. The age-group referred to as
demographic dividend in international comparison is roughly between 20 and 30
years.
Changes in the
population structure are a continuing phenomenon. Population control initially
increases the ratio of youth population.
With decline in mortality rate, it will in its course increase the proportion
of the aged. Western countries reaped the demographic dividend early in the 20th
century and are now undergoing the problem of dwindling youth population. Many
East Asian countries – South Korea,
Singapore, and Taiwan, in
particular - began to experience it in the late 20th century. It led
to rapid economic growth as it was accompanied with necessary facilities for
development. China joined this group by 1980.
India is presently having this population
advantage which is likely to last till 2045. Demographic dividend is not
repeated in any country. India has to
move fast before this window of opportunity closes.
Special mention
must be made of China
which has become one of the most dynamic and fastest growing economies in the
world due largely to demographic change coupled with development efforts. A
4-fold growth in per capita GDP – a world record – occurred in China. Population change has been brought about
voluntarily by a strong and compulsory population policy.
One-child
policy of China implemented
since 1980s has resulted in reducing fertility level in China below
replacement level by the end of the last century. The rate of decline of
fertility in China
is also a record not known anywhere else in the world. The country gained the
twin advantage of declining child ratio and increasing wealth-creating adult
population. This too has been achieved in rapid pace. Mortality rate in China also
declined fast due to several improvements in the public health system.
The
International Monetary Fund noted that substantial portion of economic growth
in India
since 1980s is due to demographic changes in the country.
Demographic
dividend, which comes with demographic transition causing change in the age-structure
of the population, does not yield concrete dividend unless it has the potential
to increase economic growth and productivity. The dividend does not accrue
automatically as a matter of course, but has to be produced consciously by
cultivating and utilizing the full potential of the entire working population.
It is a
lesson from worldwide experience that the dividend is contingent upon certain pre-conditions.
First is availability of productive employment for all men and women joining
the workforce; second is employability and usefulness of those joining the
workforce - meaning proper education and skill training for all. At the same time, wherever necessary,
enhancement of the capabilities of the existing workforce in accordance with
current requirements must be taken up.
As Jaitley
has observed, the benefits of demographic dividend will flow only if our
population is healthy, educated, and properly skilled. Critics are skeptical
about India’s
capacity to benefit from the demographic situation given the current state of
education and skill training in the country. Our problem is lack of sufficient
number of people to ponder over the real issues facing the country and think
beyond petty prejudices.
It is
disgusting to see that our attention is more on differences in the fertility
rates of different ethnic and religious groups rather than on reducing over-all
fertility rates in the country. Indeed, the issue of growth and development
associated with population size and structure is submerged in sheer statistics,
numerical strength, and projection to estimate population size by religion or
language. The lamentable factor is that such controversies are carried on by
knowledgeable groups and not the ignorant masses. Our data collection efforts
should help our developmental programmes.
Demographic
change is a principal cause behind urbanization, and internal and international
migrations. These have direct and significant impact on economic and social
development of the nation. Availability of resources for development, choice of
economic and employment patterns, and types of social sector activities depend
on population structure.
In this
demographic context, our primary concern is to develop the precious human
capital we are endowed with by expanding access to and improving the quality of
education and health services; by facilitating commencement of a meaningful and
productive work life; and by opening opportunities to young people to
participate in decision-making and delivering of all matters related to
building the invaluable human capital.
The
demographic advantage, if utilized carefully with educational, vocational
developments, and with necessary ethical values, will take the country forward.
The chances for success don’t look very bright in India. For, we are spoilt by
bad internal politics, uneconomic populism misconstrued as welfare measures, and
rampant corruption anywhere and everywhere.
If the
opportunity is missed for any reason, the results will be disastrous. Imagine
the presence of an unmanageably growing youth and working population without
abilities or opportunities to fit into the changing social-economic order of
globalization, and tending to look to the government for doles and subsidies to
carry on their lives. The only choice is
to unlock this dividend.
Therefore,
this demographic dividend cannot give us peace of mind. It is a reminder that we concentrate on
development through education and productive employment for all. ---INFA
(Copyright,
India News and Feature Alliance)
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