Why in news?
For growth of any nation there should be productive contribution of each and every section of the society especially the children and the youth. As India is in the middle of a demographic transition, we have peculiar opportunity for development and growth. This can lead India towards faster economic growth.
What is it?
Demographic dividend-
As per, the United Nations Population Fund (UNFPA), the economic growth potential that can result from shifts in a population’s age structure, mainly when the share of the working-age population (15 to 64) is larger than the non-working-age share of the population (14 and younger, and 65 and older).
Demographic dividend mentions the growth in an economy, which occurred due to the change in the age structure of a country’s population. This change in age structure is generally happened by a decline in fertility and mortality rates.
Demographic dividend mentions the growth in an economy, which occurred due to the change in the age structure of a country’s population. This change in age structure is generally happened by a decline in fertility and mortality rates.
Initially in this stage of transition, fertility rates fall, leading to a labour force that is temporarily growing faster than the population dependent on it. And during this time, the per capita income grows rapidly. This is the first dividend a country receives that passes through the demographic transition.
Fertility decline- Falling fertility (currently 2.0), rising median age (from 24 years in 2011, 29 years now and expected to be 36 years by 2036), a falling dependency ratio (expected to decrease from 65% to 54% in the coming decade taking 15-59 years as the working age population), India is in the middle of a demographic transition. When fertility declines, the share of the young population falls and that of the older, dependent population rises. The smaller share of children in the population provides higher investment per child.
If the fertility declines rapidly, then the increase in the population of working ages is substantial yielding the ‘demographic dividend’. Thus, it can help to the labour force for better productivity and boost income.
Then after some time, there will be rise in the share of the older population, on contrary the working age population begins to decline and hence the dividend is available for a period of time, known as ‘the window of demographic opportunity’.
Challenges for reaping the benefits of the demographic dividend-
- Unemployment- With the lack of proper policies, the rise in the labor force may result in to unemployment, inciting economic and social risks. And India is passing through Jobless growth where already existing working age population is not even absorbed.
- Skill development- There is a major concern of unskilled labour force in India.
- Less public investment- Human development parameter such as education and healthcare lacks public investment.
Issues of Political FundingWhat Should be the approach to reap the benefits of Demographic Dividend?
Focus on human capital: There should be more investment in children and adolescents. As India perform poorly in Asia in terms of private and public human capital spending. Therefore, India should focus on nutrition and learning during early childhood and emphasis on universal skilling and entrepreneurship..
Focus on human capital: There should be more investment in children and adolescents. As India perform poorly in Asia in terms of private and public human capital spending. Therefore, India should focus on nutrition and learning during early childhood and emphasis on universal skilling and entrepreneurship.
Education: The big concern in this sphere is gender inequality. As in India there is large number of boys in secondary and tertiary school than girls, it should be balanced. On the other hand in Japan, South Korea, and Indonesia, the gender differences are rather minimal.
Female workforce participation: As of 2019, 20.3% of women were working or looking for work, less from 34.1% in 2003-04. India have to enhance female workforce participation by providing new skills and opportunities for women and girls, it will raise their participation in economy and can boost India’s efforts to achieve $3 trillion economy.
Reproductive healthcare services: As per the latest National Family Health Survey-5 (2019-21), India’s unmet need for family planning is high at 9.4% as compare to China (3.3%) and South Korea (6.6%). Therefore, we have to provide universal access to high-quality primary education and basic healthcare with rights-based approach.
Way forward-
To reap the proper benefits of demographic dividend, India have to focus on better governance approach, providing better facilities and timely assessment is essential. Because the growth is depend upon the working-age (labour force) population. Therefore India’s labour force needs to be equipped with the right skills for the modern economy.