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Demographic Dividend in India

Demographic Dividend in India

Since GD and PI are equally important and crucial component of MBA selection processes hence, knowledge on current affairs not only gives confidence to MBA Aspirants but gives them edge also. 

We at MBARendezvous.com have started series of articles on current affairs which will certainly help you to crack GD and PI  

This article on "Demographic Dividend in India"  is the latest on current affairs: 

In 1952, the Indian Government was one of the first in the world to formulate a National Family Planning Programme to promoting a small family norm and support population control and development programmes. But the family planning programme failed to achieve the objectives it was destined to, and population continued to increase in 1960s, 70s, and 80s exponentially due to little decrease in the birth rates. Contrary to this, neighbor China strictly pursued ‘one child norm’ which effectively reduced the birth rate and thereby the population growth rate. Other developed countries like US, Japan and those in European Union achieved population stabilization quite early before the middle of 20th century and few of them are facing the population reduction now. This failure of India on the population front and success of other countries now turning into an opportunity for India, often termed as demographic dividend

Due to decline in the birth rate in the developed countries, the proportion of population between the age group 15-59, which constitutes the work force engaged in the economic activity, declining and in coming decades, it will further decline resulting in the increase in the old age population. This will increase the dependency ratio in the country and economy will find it tough to finance the increasing burden of pension and other old age benefits. In such a scenario, these economies will have to look overseas to get the work force which is on decline in their own country. 
Here comes India whose working age population will surge to maximum between 2020-2050, thanks to the unsuccessful family planning programme in 20th century. India is amongst the youngest nations in the world and even in next 15 years, half of India's population will be below the age of 30. According to official data, India's labour force, which was 472 million in 2006, is expected to be around 526 million in 2011 and will reach 653 million in 2031. It is noteworthy that the growth rate of labour force will continue to be higher than that of the population until 2021. According to the Indian Labour Report, 300 million youth would enter the labour force by 2025, and . 25% of the world's new workers in the next decade will be Indian because 10 lakh new Indians will join the labour force every month.
But demographic advantage does not mean more people but more prosperous and productive people. An unemployed, uneducated or unskilled Indian cannot reap the benefits of demographic dividend. Currently, most of the Indian work force is unskilled while the future jobs originating from the developed world will be skilled one. Therefore, to gain the benefits of demographic dividend, India must impart required skills to its workforce. Its workforce needs to be educated, equipped with required skills and healthy. 
The largest part of India's schools is of poor quality. Teachers are inadequately prepared, weakly motivated, poorly paid, and frequently absent. The situation in higher education is even more problematic for India's participation in the global knowledge economy. The overall quality of the higher education system is well below global standards and it has shown no significant sign of improving. High-tech employers complain that a large majority of engineering and other graduates are inadequately trained and must be “re-educated,” at considerable expense, by their employers or not hired at all. The large high-tech firms such as IBM, Infosys and Wipro have set up their own in-house academies to prepare employees for productive work. India now educates only 10 per cent of the age group in higher education. Dropout rates among that 10 per cent are high. 
A growing number now attends often low-quality colleges and other institutions that are not funded by the government some of which are little more than teaching shops and degree mills. Current plans to raise the participation rate to 15 per cent by 2015 still well under what other emerging economies are now educating seem inadequate to achieve 15 per cent participation. Public spending on education is yet to reach 6percent of GDP, a demand which Indian nationalist kept before British Government in pre-independence years is still not fulfilled.
In health sector too, the public expenditure reached barely 2 percent of GDP, which is less than adequate to provide health facility access to every citizen in the remotest corner of the country. Majority of the children, future work force are malnourished, tuberculosis is endemic to India, and hundreds die every year due to Japanese encephalitis in eastern UP and Bihar, polio is yet to be eradicated from country, many communicable and non communicable diseases take heavy toll every year in India. In gist, Indian population cannot be called healthy and the healthy population is a necessity for not merely to get benefits from the demographic dividends but also country’s own growth. 
Thus the dreams of huge income inflows due to demographic dividends in future get shattered once one realizes the stock of educational and health infrastructure of the country and whatever existed particularly in public sector is also known for its poor quality. Thus India needs to really push hard on educational and health fronts and must try its every bit to inculcate the required skills in its workforce to make it as competent as its counterparts in the developed world. It not only needs the suitable strategy to answer the challenges but also a proactive challenge in the execution of these strategies. 
If India failed to improve the quality of its workforce, it may find hard to provide gainful employment to such a large chunk of unskilled workforce not just in overseas markets but in India also as most of the future jobs will be of skilled nature in or outside India. Therefore if India failed to increase the productivity of its workforce, the demographic dividend may eventually turn into a demographic catastrophe or demographic nightmare.   
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