DEMOGRAPHIC DIVIDEND

What is demographic dividend?

Demographic dividend is economic growth brought on by a change in structure of country's population , usually a result of a fall in fertility and mortality rates.

The term demographic dividend was coined by David Bloom.

Why demographic dividend is important?

It is very important .Historically demographic dividend has contributed up to  15% of the over all growth in advanced economies. Demographic dividend helps in increasing the work force , there will be rapid urbanization and industrialization.

It leads to more investment in physical and human infrastructure. 

The productivity of the country's economy increases due to increased labour force.

Demographic dividend will help in witnessing a massive shift towards middle class economy.

India and demographic dividend

India is projected to surpass china as world's most populous country in 2023 according to 2022 edition of united nations world population prospects.

India is currently at a stage of demographic transition with a substantial percentage of young population.

Share of working age  population (15-64 yrs) is larger than non working age share of the population (14 and younger  and 65 and older).

How demographic dividend is a bliss?

• Increase in fiscal space: Fiscal resources can be diverted from spending on children to investing in modern physical and human infra structure.
• Rise in work force ( more than 65% of working age population)
• Potential to rise as economic super power
• Increase in labour force
• Decline in fertility will naturally lead to rise in women's work force , which can be considered as a new source of growth

Challenges

• Unfulfilled educational requirement
• Malnutrition
• Scarcity of trained teachers
• Gender inequality
• Low human development parameters
• Job less growth due to de - industrialization, de- globalization( according to NSSO periodic labour force survey 2017-2018 around half the working age population is jobless )
• Informal nature of economy

Way forwards

• Up grading educational standards
• Focus on skill development
• Modernizing school curricula
• Fulfilling health related requirement
• Affordable and available higher education
• Bridging gender gaps in work force
• Gender budgeting : It is concerned with gender sensitive laws, programs and schemes , resource allocation, implementation and execution , programs and schemes audit and impact assessment and follow up remedial action to alleviate gender  inequality.
• Federal approach for diverse states 
• proper understanding of population related like migration, ageing, skilling , female work force participation and urbanization.

The highest working age ratio will be between 2021 and 2041 with the peak in the working age ratio occurring   in 2031.                                                                                                                                     

India theoretically , could have a golden period in the two decades of 2020 to 2040 , if demographic dividend is harnessed properly.