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Video Summary

[RSTV The Big Picture] Demography: Advantage India

India will have the working age population of 1 crore per annum for the next decade and then 4.2 million per annum for the decade starting from 2030. The benefits of the working populations can only be achieved if those populations are provided with adequate resources.
By IT's Video Summary Team
July 26, 2019

Contents

  • Introduction
  • Current Scenario of democracy in India
  • How to reap India’s demographic dividend?
  • Is it enough to increase working population to accelerate economic growth?
  • How Indian Education model differs from Chinese model?
  • Challenges
  • Suggestions
  • Policy on regulating Population
  • Opportunities
  • Way Forward

[RSTV The Big Picture] Demography: Advantage India

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Introduction:

  • As populations in countries such as China, US, and Japan are getting older, India’s population is getting younger.
  • This presents a golden opportunity for economic growth. However, this change in population structure alone cannot push growth. There are many other factors such as providing good health, quality education and decent employment.

Current Scenario of democracy in India:

  • Since 2018, India’s working-age population (15 to 64 years) has grown larger than the dependent population (children aged 14 or below and people above 65 years). This bulge in the working-age population is going to last till 2055, or 37 years from its beginning.
  • Currently, India’s working-age population is increasing because of rapidly declining birth and death rates.
  • As per UN, India’s age dependency ratio (the ratio of dependents to the working-age population) is expected to only start rising in 2040.

How to reap India’s demographic dividend?

  • First, if the number of working population increases, given that they are provided with suitable jobs, the production of any economy will increase.
  • Second, once the economic output increases, taxes will also increase which empower the government to spend more on public services, goods and investments.
  • Third, as the working age population will buy homes, cars, consumer durables etc., aggregate demand in the economy will increase that gives further boost to the production process in the economy.
  • Fourth, the presence of working population result in increase in the savings which enable high investments in the economy.
  • If India can achieve above four points, then it can have rapid growth as it was seen in China, Japan and other several East Asian countries.

Is it enough to increase working population to accelerate economic growth?

  • The benefits of the working populations can only be achieved if those populations are provided with adequate resources. Also, the various benefits resulting from working populations assumes that working age population is healthy, educated, skilled and the opportunities are available for them.
  • Research shows that the income one earned has highly correlated with his/her generational as well as educational background.
  • Moreover, Institutions play a vital role in framing right policies and in accelerating growth of the economy.
  • Hence, given the highly social and economic unequal nature of India, it is not possible to accelerate growth simply by increasing working population as it depends upon various factors such as social, economic and institutional factors.
  • Regional Disparities of Demographic transition in India is also going to be a challenge.
  • Currently, different states (mainly 3 sets) of India are passing through the different phases of demographic transition.
  • States such as Kerala and Tamilnadu have already started witnessing the demographic dividend.
  • For some states such as Andhra Pradesh and Delhi, demographic dividend is just opening.
  • For states such as Uttar Pradesh and Bihar, the demographic dividend is yet to open.
  • This regional disparity might give rise to the migration from poor to rich states as well as the social and political problems associated with it.

How Indian Education model differs from Chinese model?

  • In the initial development years, china focused on providing basic education to everyone rather than providing higher education. Then, they focused on moving those educated persons to the skill development and the production process directly.
  • Unlike China, India established institutions for higher education which resulted in the imbalanced structure, that also remained in policy structure of India even today.
  • The erstwhile Jawaharlal Nehru government opened Indian Institutes of Technology (IIT) directly which only allows certain section of society and denying even basic education to the rest. Hence, India need to focus on primary as well as on secondary education to cope up with the coming technological disruptions.

Challenges:

  • India has different sections of populations who are unequal in terms of education and technology, which is major barrier. For example, it is hard for a person coming from a rural background to jump to the higher productivity areas.
  • The technology can also be proved as threat as it has been providing employment as well as elderly services through robot as seen in Japan. Hence, the benefits of demographic dividend depend on how India can take the advantage of technological opportunities.

Suggestions:

  • The assumption that the people are capable to transit from subsistence economic level to higher productive areas requires massive ‘state led’ interventions including massive educational and reskilling programmes.
  • India need to heavily invest in the education, healthcare, skill development, employment opportunities to reap the benefits of demographic dividend.
  • Without decline in fertility rates, the young parents have to support their children which means that their resources will be underutilized. Hence, Government has to provide access to family planning services to young population.

Education reforms needed:

  • Primary/ basic education should be the main focus.
  • Girl’s education.
  • Access to education through technology.

Health reforms needed:

  • Health insurance should be provided.
  • Treatment for the communicable and non-communicable diseases should be provided.
  • Also social security to aged group.
  • Access to family planning to young population, provide quality reproductive health services to adolescents.
  • India needs to address the needs of adolescence as many of them don’t have access to reproductive health services. The marrying age should be increased to decrees the fertility rate.
  • India have to evolve a proper social and physical infrastructure model due to the migration of people from poorer to rich states.
  • Also, government should focus on sex ratio (896) as well as female labour force participation (fallen down in India from 27.5 to 19, it is 63 for china).
  • In 2012, India hit the ‘peak child’ (the number of children stops increasing) of 0-11 years of age. Currently, India hit the same for 0-19 years of age. As per Economic survey, less number of children due to ‘peak child’ are attending more number of schools. This should also be taken into consideration while considering the benefits of demographic dividend.

Employment reforms needed:

  • By publically funded programs for reeducation, reskilling and bridge technological divide.
  • Suitable job for increasing working population.
  • Increment in the retirement age.
  • Tackle inequality in economy as well as gender aspect (female labor force participation).

Focused Policy Action Plan can be established as below:

  • The short term goal of the government should be focusing on expanding employment in the health, education and policing services.
  • The medium term goal of the government should be focusing on expanding manufacturing base.
  • The long term goal should focus on more technological aspects as technology is likely to replace large number of jobs in many sectors.
  • Moreover, in the long run, any comprehensive policy addressing population issues have to address the issue of social and economic inequalities.

Policy on regulating Population:

  • The recent proposed ‘Population Regulation Bill 2019’ imposes punitive action against people with more than two living children and making them devoid of all government services.
  • India should look population explosion in a positive manner as demographic divided and not as a burden.
  • The population policy should focus on causes of reaping benefits of demographic dividend that is more educated and healthier population.
  • India has already implemented very progressive National Population Policy, 2000 which took inspiration from International Conference on Population and Development (ICPD).

Opportunities:

  • India will have the working age population of 1 crore per annum for the next decade and then 4.2 million per annum for the decade starting from 2030.
  • The launch of Chandrayan-2 mission shows that Indian people have the potential to achieve such great height in future. This potential can be move further by the benefits of demographic dividend.
  • India has the opportunity of ‘technology based economy’ that is going to shoot up sharply in near future.
  • The age of average of India is 28 years and 50% of Indian population is less than 25 years which shows the tremendous potential economic capacity of India.

Way Forward:

  • Government should follow the same policy interventions on education sector as followed in health sector with the Ayushman Bharat scheme.
  • Women should have access to the family planning services. Social determinants such as age at marriage, son preference needs to be addressed.
  • Along with the taking care of adolescences, it is equally important to focus on elderly people as they are also part of a dependent economy.
  • Some of the foundation of the social security, such as Ayushman Bharat, Pension scheme for unorganized sector etc., on which economic growth is possible was laid down in the last few years.

 

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