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            In many ways, India’s demographics are the envy of the world. As populations in countries such as China, US, and Japan is getting older, India’s population is getting younger. Since 2018, India’s working-age population has grown larger than the dependent population — children aged 14 or below as well as people above 65 years of age. This bulge in the working-age population is going to last till 2055, or 37 years from its beginning. India’s working-age population is now increasing because of rapidly declining birth and death rates. India’s age dependency ratio, the ratio of dependents to the working-age population, is expected to only start rising in 2040, as per UN estimates. This presents a golden opportunity for economic growth. It is, however, important to note that this change in population structure alone cannot push growth. There are many other factors envolved too in it.


What is Demographic Dividend?

  • Demographic dividend, as defined by the United Nations Population Fund (UNFPA) means, “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).”
  • In other words, it is “a boost in economic productivity that occurs when there are growing numbers of people in the workforce relative to the number of dependents.”


What is World Population Prospects 2019?(as mentioned by the anchor and one of the panelist)

            The 2019 revision of the World Population Prospects is the twenty-sixth edition of the official United Nations population estimates and projections. It presents population estimates from 1950 to the present for 235 countries or areas, underpinned by analyses of historical demographic trends. This latest assessment considers the results of 1,690 national population censuses conducted between 1950 and 2018, as well as information from vital registration systems and from 2,700 nationally representative sample surveys. The 2019 revision also presents population projections to the year 2100 that reflect a range of plausible outcomes at the global, regional and country levels.




This transition happens largely because of a decrease in the total fertility rate (TFR, which is the number of births per woman) after the increase in life expectancy gets stabilised. 

Many Asian economies — Japan, China, South Korea — were able to use this ‘demographic dividend’, defined by the United Nations Population Fund (UNFPA) as the growth potential that results from shifts in a population’s age structure.


TFR indicates the average number of children expected to be born to a woman during her reproductive span of 15-49 years.


How does TFR vary between urban and rural areas?

The total fertility rate has more than halved in both urban and rural areas, falling even below the replacement level in the former where it is 1.7, down from 4.1 in 1971. In rural areas, TFR has fallen from 5.4 to 2.4 during the same period. For rural areas, it varies from 1.6 in Delhi and Tamil Nadu to 3.3 in Bihar. For urban areas, the variation is from 1.1 in Himachal Pradesh to 2.4 in Uttar Pradesh and Bihar. Of the 22 states, only six have a TFR of 2 or more in urban areas. There are 10 states where TFR is below 2 in rural regions.


Why is TFR falling?

Higher education, increased mobility, late marriage, financially independent women and overall prosperity are all contributing to a falling TFR. It goes below 2 in both urban and rural areas, where girls complete schooling and reduces further as they pass college. Bihar, with the highest TFR of 3.2, had the maximum percentage of illiterate women at 26.8%, while Kerala, where the literacy rate among women is 99.3%, had among the lowest fertility rates. As more cities come up, people move for jobs and employment tenure gets shorter, TFR may fall further.


What does this mean for policymakers?

  1. India has entered a 37-year period of demographic dividend, which could spell faster economic growth and higher productivity.
  2. As such, the government needs to engineer its policies to harness the opportunity.
  3. It must also formulate policies to take care of higher medical costs as the population ages and productivity shrinks.
  4. As more people live away from their parents, India will also need to have an affordable social security system that provides pension to the elderly and takes care of their daily needs and medical expenses.


Reaping out of demographic dividend:

  • The output of the economy increases if the number of working population increases.
  • The result in the increase of output increases the taxes of the government.
  • This inturn increases the aggregate demand in the economy.
  • This section will also save money and make higher investment in the economy.


Challenges in the way:

  • Different section of the population have unequal access to resources like education and technology.
  • Different states have different demographic transition like Kerala and Tamil Nadu are witnessing demographic dividend, Andhra Pradesh and Delhi are opening up the demographic dividend, Bihar and UP are yet to open up.
  • Technological change is making labour partially or wholly redundant in a number of sectors, across the world. Even where labour is still necessary, increasing complexity of production requires labourers to have a minimum skill level that is much higher than the skill level required during the labour-intensive output boom in China and South-East Asia in the past decades.
  • The infrastructure put up in place in cities are not able to handle migration.
  • Dissatisfaction cited are unsecure jobs, low salaries, stressful environment, and mismatch between job and qualification.
  • Social and political problem associated with regional disparity.
  • Female labour force participation has decreased.
  • Educational imbalances: The quality of primary schooling and teachers in India is very poor. ASER reports show the quality of education among children. Moreover, because modern ailments such as obesity are increasing in many developed countries, there is no guarantee that adult longevity will continue to increase perpetually.
  • Employment issues


Government initiatives:

  • Ayushman Bharat with the goal of providing healthcare
  • Pension schemes
  • Scholarships so that students can be nurtured.
  • PM Kisan Samman Nidhi etc.


Way Forward:

To be able to harness the potential of this large working population, which is growing by leaps and bounds, new job generation is a must. The nation needs to create jobs to absorb the addition of young people into the workforce.

  • Improved infrastructure, skill development, access to easy finance, reducing barriers to entrepreneurship and forums for mentorship of emerging entrepreneurs in partnership with corporates are some of measures.
  • Use of technology in all sectors.
  • Need to focus more on pimary and secondary education.
  • Equally important focus on elderly people.
  • The current situation calls for more and better schools, especially in rural areas. It also calls for better transportation links between rural areas and regional urban hubs.
  • Increasing the number of formal jobs in labour intensive, export-oriented sectors such as textiles, leather and footwear, gems and jewellery These sectors also have a higher share of the female workforce.
  • The government must also ensure better quality of jobs with a focus on matching skill-sets and job opportunities.
  • There is a need to look into these qualitative issues of job satisfaction, job profile and skill matching, and the creation of opportunities for entrepreneurship in order to be able to harness the vast potential of human resources.



It is imperative that policy-makers deal with the situation on multiple fronts. Universal education, value-added skills accretion and massive growth in employment in the formal sectors should be the key focus areas. Unfulfilled aspirations of the youth can quickly turn to frustration, leading to violent outbursts. There is also a need to engage with the youth and create an enabling environment for entrepreneurship. Failure to do so would not just mean a missed opportunity in terms of harnessing the demographic dividend, but the ensuing rise in unemployment and poverty could undermine the advances made on the economic front and foment societal upheaval.

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