General awareness on current topics is essential as not only you will be getting questions on GK in various MBA entrance exams but it will be useful for Essay writing test and WAT also.
Today, you will read General Awareness Topic: “Are we really getting Demographic Dividend?”
The demographic dividend is a rise in the rate of economic growth due to a rise in the share of working age people in a population, Failure to control the population growth and population explosion in 1960s and 70 has resulted in the increase in the share of working population.
While in the developed world, share of working population is consistently decreasing resulting in increased dependency ratio; India’s dependency ratio is decreasing. Dependency ratio is the ratio of dependents--people younger than 15 or older than 64--to the working-age population i.e. those of age between 15-64.
India has more than 50 percent of its population below the age of 25 and more than 65 percent below the age of 35. It is expected that, in 2020, the average age of an Indian will be 29 years, compared to 37 for China and 48 for Japan.
In the wake of scare work force in the developed world, more jobs are likely to be outsourced to India. However, as of now, there is no hint that India is benefiting from the rise in its working age population. The Gross Domestic Product (GDP) in India expanded merely 0.8percent in the second quarter (July-September) of 2012 over the previous quarter.
Unemployment rate stood at 3.8 percent in 2010-11, which according to Labour Bureau is much better than that of other countries like US, Spain and South Africa. In rural and urban areas it was 3.4 per cent and 5 per cent. However, Labour Ministry data indicates that higher education and degrees are not helping rural job aspirants to get their coveted jobs.
The unemployment rate among rural educated youth was 13.9 percent against 7.6 percent in urban areas. This is a disturbing trend that unemployment among rural graduates and post-graduates is not only higher, but also they lack basic skill-sets to fill the demands of market economy.
Thus as of now, the trend is not supporting the likelihood of India gaining from demographic dividend. Certain factors are required for the full exploitation of demographic dividend. First, the level and quality of education will obviously have a significant impact on employability of Indians in the coming years.
Most of the degrees provided across the universities and colleges in the country are not suitable for job requirement of the MNCs. Most of the new jobs coming in future will be of highly skilled nature and therefore a roadmap for of nationwide skill development programme is required.
Another challenge facing India is empowerment of its unsecured population as most of India’s working age population is employed in the informal sector; close to 300 million Indian workers at present belong to this sector.
This means that most of this section of the population likely lives a ‘hand-to-mouth’ existence, with few managing to save for future expenditures such as health crises or the higher education of their offspring. This coupled with a lack of access to banking and financial advice means that they mostly do not have adequate savings and investments to act as a safety net for when they are older, despite having worked for most of their life.
This in turn will create an enormous burden on the government. Without harnessing the potential if these people, harnessing the benefits of demographic dividend will remain a distant dream.
There is a lot of scope to intervene at present to ensure that this demographic dividend is not wasted. Much of this burden will rest on the government, as well as on private enterprises, especially when it comes to generating employment opportunity.
Given the fact the increasing globalization will make the country increasingly vulnerable to the external shocks, if suitable measures are not undertaken by the authorities, demographic dividend may increase the unemployment, poverty, inequalities which may ultimately result in social unrest.
Thus in the absence of proper measures, demographic dividend may turn into a demographic nightmare. Given that India’s working age population will continue to be over 50% of the total population till the end of the 21st century, there is enough time to exploit it fully for the benefit of the country.