2023-04-19 14:39:27
Unlike India’s other global scores — the world’s fastest growing economy, for instance — this one is not decidedly a proud achievement for some. Many would rather see it as a dubious distinction, given India’s decades-old struggle with population growth which was seen to be stretching India’s resources and making it less governable. High population makes it difficult to reduce poverty and diminish inequality. Yet, there are those who think more Indians would mean more production, consumption and thus higher growth.
What regarding the demographic dividend?
Demographic dividend has become a buzzword in the discourse of a resurgent India in the past few years. It denotes the faith in India’s huge youth population which is expected to hoist India up with its energy and exuberance. According to a new report by United Nations Population Fund, 25 percent of India’s population is in the age group of 0-14 years, 18 per cent in the 10 to 19 age group, 26 per cent in the age bracket of 10 to 24 years, 68 per cent in 15 to 64 years age group, and 7 per cent above 65 years.
As much as 68 percent of the working or able-to-work population certainly looks like a demographic dividend when a lot of advanced countries in the world struggle due to their population growing old thus reducing the number of those who might work. China, which became the factory of the world, made this achievement due to its significant population of young people. But now it is also looking at an aging population which would not be able to support its humongous manufacturing operations. Aged population also means added economic burden for a country since it needs to spend more on health care.
According to a CII report from last year, India’s demographic dividend can boost India’s GDP growth — from the current $3 trillion to $9 trillion by 2030 and $40 trillion by 2047. While India is likely to add 101 million people in the working age population between 2020-30, this number will reduce to 61 million and then to 21 million for 2030-40 and 2040-50, respectively. It is expected that India’s working age population will start declining in the decade post 2050, the report said.
This means 2020-50 provides India with a short window of opportunity to harness its demographic dividend. Considering the cheaper labour available in India than in China, India can leverage its demographic dividend to attract big businesses from Western countries which had chosen China for manufacturing. But the demographic dividend isn’t as achievable as it seems.
When dividend becomes a drawback
The mad scramble for opportunities among Indian youth becomes clear from the nearly 6.5 lakh candidates competing for 700-odd of India’s top civil services jobs every year or lakhs of youths vying to grab a few hundreds of low-ranking jobs in the railways.
Imagine, most of the country’s population being young and unable to find little productive or remunerative work to do. Unemployment not only creates economic stress but also worsens social problems when a large number of working-age people fight for limited resources in various ways. India has been struggling to create jobs for its huge youth population. Urban unemployment spiked during the pandemic years, largely because of lockdowns, but before that it hovered between 6%-7%, according to CMIE data. Previously, it reached a high of 11.2% in August 2016.
At the core of India’s jobs problem is the lack of proper skilling and education. A recent Bloomberg report pointed out how “worthless degrees” are creating an unemployable generation in India. Business is booming in India’s $117 billion education industry and new colleges are popping up at breakneck speed, it said. Yet thousands of young Indians are finding themselves graduating with limited or no skills, undercutting the economy at a pivotal moment of growth. Most of the engineering colleges in India lack contemporary curriculum and produce graduates who are of no use to industry, various reports and surveys have found in the last few years.
The proportion of formally skilled workers as a percentage of total workforce stands at 24 per cent in China, 52 per cent in USA, 68 per cent in UK and 80 per cent in Japan, while in India it’s a paltry 3 per cent, a CII report pointed out last year. However, India is adding to the number of its employable workforce, another study has found. As per the Wheebox India Skills Report 2023, 50.3% of young people were found to be highly employable overall as once morest the previous year’s employability figure of 46.2%,
Another challenge with India’s huge population is poor labour force participation, especially of women. For India’s female labour force participation rate in 2021 was 19%, lower than the world average at 25.1%, and has been declining for long. Prime Minister Narendra Modi aims at 50% female workforce by 2047.
More muscles for India’s diplomatic power
India has made much of it being the largest democracy in the world, especially since the Modi government has started sharpening its diplomacy to create a place for itself on the global stage. Now as a country with the world’s biggest population, India will certainly try to claim more power and influence on global forums. And many think it has the right to do so.
“What is the significance of being the largest population in the world? I think you have certain claims on things. I wonder what will happen in terms of the discussion around…roles at the UN and the roles of the permanent five members of the Security Council,” said John Wilmoth, Director of the Population Division of the UN Department of Economic and Social Affairs, last year when World Population Prospects 2022 projected last year that India would overtake China in population next year.
“If India becomes the largest country, they may think that that gives them a claim that they should be part of …they’ve been claiming that they should be part of that group (permanent member of the Security Council) anyway. But, you know, it may strengthen their claim,” Wilmoth said.
The status of the most populous country will also help India claim leadership of the global south for which it has been striving following assuming the G20 leadership last year.
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