Demographic Transition and Opportunity for India | 18 Feb 2023

Why in News?

The world is going through a phase of demographic transition towards aged populations. Adaptation strategies will require governments, businesses and common people to make key adjustments.

• This may usher in a great opportunity for India that is experiencing a demographic dividend.

What is the Demographic Transition and Demographic Dividend?

• A demographic shift refers to a change in the composition of a population over time.
  • This change can occur due to various factors such as changes in birth and death rates, migration patterns, and changes in social and economic conditions.
• A demographic dividend is a phenomenon that occurs when a country's population structure shifts from having a high proportion of dependents (children and elderly) to having a higher proportion of working-age adults.
  • This change in population structure can result in economic growth and development if the country invests in its human capital and creates conditions for productive employment.

What is the Significance of India’s Demographic Dividend?

• About:
  • India entered the demographic dividend opportunity window in 2005-06 and will remain there till 2055-56.
  • India’s median age is markedly lower than that of the US or China.
    • While the median ages of the US and China are already 38 and 39 respectively, India’s median age is not expected to reach 38 until 2050.
• Challenges Associated with India’s Demographic Dividend:
  • Low Female Labour Force Participation: India’s labour force is constrained by the absence of women from the workforce.
    • As per Periodic Labour Force Survey 2020- 2021, female labour workforce participation stands at 25.1%.
  • Environmental Degradation: India's rapid economic growth and urbanisation have led to significant environmental degradation, including air pollution, water pollution, and deforestation.
    • Addressing these issues is essential to ensuring sustainable economic growth.
  • High Dropout Rate: While over 95% of India’s children attend primary school, the National Family Health Surveys confirm that poor infrastructure in government schools, malnutrition, and scarcity of trained teachers have resulted in poor learning outcomes and high dropout ratios.
  • Lack of Employment Opportunities: With a large and growing working-age population, Indian job market is not able to generate enough jobs to meet the demands of this expanding workforce.
    • This has resulted in high rates of underemployment and unemployment.
  • Lack of Adequate Infrastructure: Poor infrastructure, including inadequate education and health facilities, transportation, power, and communication network, makes it challenging for people to access basic services and employment opportunities, particularly in rural areas.
  • Brain Drain: India has a large pool of highly skilled and talented professionals, but many of them choose to leave the country in search of better job opportunities and living conditions abroad.
    • This brain drain is a significant loss for India, as it results in a shortage of skilled workers and limits the country's ability to fully leverage its demographic dividend.

How India can Utilise its Demographic Dividend?

• Gender Equality: India needs to address gender inequality in education and employment, including improving access to education and employment opportunities for women.
  • Women's participation in the workforce can increase economic growth and lead to a more inclusive society.
• Raising Education Standards: In both rural and urban settings, the public school system must ensure that every child completes high school and goes on to skilling, training, and vocational education.
  • The modernization of school curricula along with the implementation of Massive Open Online Courses (MOOCS) and the establishment of open digital universities will further contribute to India’s qualified workforce.
• Encouraging Entrepreneurship: India needs to encourage entrepreneurship and innovation, particularly among the youth, to create job opportunities and contribute to economic growth.

Source: HT