India’s demographic dividend refers to the economic growth potential that comes from having a large proportion of the population in the working-age group. With a young population, fewer dependents, and an expanding labor force, India has a unique opportunity to boost its economic development. However, realizing this potential depends on how well the country can provide quality education, healthcare, and employment opportunities to its young people. If these factors are managed effectively, India’s demographic dividend could significantly contribute to its economic growth and global standing in the coming decades.
Tags: GS -2, Human Resource, GS-3, Employment- Mobilization of Resources- Inclusive Growth
Context:
- Around 63% of the population in working age and a median age of 28 years, India has a unique opportunity to leverage its demographic dividend.
What is meant by Demographic Dividend?
- The UNFPA defines demographic dividends as “the economic growth that can result from changes in demographic structure, especially working age distribution (14 and under, and 65 years and over)”.
- About 68% of the population is between the ages of 15 and 64, with 26% falling in the 10-24 age bracket, making India one of the youngest countries in the world
- India has a relatively young population, especially as the average age is 28.4 years.
- India will have 1.04B working years by 2030 and India’s dependency ratio will be the lowest in its history by 2030 at 31.2% .
- With the global workforce growing at around 24.3% over the next decade, India will remain the world’s largest supplier of manpower.
How is India Unleashing its Demographic Dividend?
- Youth Centric Policy: India has more than 50% of its population below the age of 25 and more than 65% below the age of 35.
- Investing in Education: India’s overall literacy rate of 74.04% which is below the world average of 86.3%.
- Skilled Workforce: According to India Graduate Skill Index 2023, roughly 45-50% of Indian fresh graduates are deemed employable by industry standards.
- Ensuring Healthy Population: Healthy population and better healthcare facilities ensures better utilisation of human capital and also reduces the burden on the healthcare system.
- BuildingInfrastructure:Componentslikeroads,ports,airports,bridges,railways,watersupply,power,telecommunication etc. and India’s capital expenditure GDP increased from 1.7% in 2014 to nearly 2.9% in 2022-23.
Factors Leading to Demographic Disaster:
- High Unemployment Rate: India’s working population grew from 61% (2011) to 64% (2021), projected to reach 65% by 2036, while youth participation in economic activities fell to 37% in 2022.
- Ageing Population: India’s elderly population is rapidly growing, with a decadal growth rate of 41%, expected to surpass 20% of the population by 2050.
- Resource Scarcity: India’s per capita water availability dropped from 1,816 cubic meters (2001) to 1,486 cubic meters (2024).
- Low Living Standard: Population growth strains public spending on social sectors, affecting the quality of life, while poverty limits access to education, healthcare, and jobs.
- Unplanned Urbanisation: Urban population is expected to rise from 410 million (2014) to 814 million by 2050, increasing issues like overburdened infrastructure, slum growth, and environmental degradation.
Government Initiatives:
- Skill India Mission (2015): Aims to train over 40 crore Indians by 2022 to improve employability. Over 1.25 crore youth have been trained under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) by 2023.
- Make in India: Launched in 2014 to boost GDP share to 25% by 2025,create 100 million jobs and attracted ₹3.6 lakh crore in Foreign Direct Investment (FDI) between 2014-2022, contributing significantly to sectors like automobiles, electronics, and textiles.
- Atal Pension Yojana (2015): Provides financial security for the ageing population. As of 2023, over 5.2 crore people enrolled in the scheme, enhancing social security for the elderly.
- National Education Policy (NEP) 2020: Targets 100% Gross Enrollment Ratio (GER) in school education by 2030 and aims to increase GER in higher education to 50%.
- Production Linked Incentive (PLI) Scheme: Provides incentives of up to ₹1.97 lakh crore across 14 key sectors over a 5-year period to boost domestic manufacturing and generate 60 lakh jobs by 2026.
- National Apprenticeship Promotion Scheme (NAPS): Aims to train 50 lakh youth by 2025 with a government contribution of 25% of the stipend (up to ₹1,500 per month) to encourage industry participation.
- Startup India: Facilitated the registration of over 98,000 startups since its launch in 2016, creating over 7 lakh direct jobs and contributing significantly to MSMEs’ growth.
- Atmanirbhar Bharat Abhiyan: Announced a ₹20 lakh crore economic package, with measures such as ₹3 lakh crore collateral-free loans for MSMEs and ₹50,000 crore equity infusion, aiming to support 1.5 crore jobs in small and medium enterprises.
UPSC Civil Services Examination, Previous Year Questions (PYQs)
Prelims:
Q:1 To obtain full benefits of demographic dividend, what should India do? (2013)
- Promoting skill development
- Introducing more social security schemes
- Reducing infant mortality rate
- Privatisation of higher education
Ans: (a)
Q:2 Consider the following specific stages of demographic transition associated with economic development: (2012)
- Low birth rate with low death rate
- High birth rate with high death rate
- High birth rate with low death rate
Select the correct order of the above stages using the codes given below:
- 1, 2, 3
- 2, 1, 3
- 2, 3, 1
- 3, 2, 1
Ans: (c)
Mains:
Q:1 “Demographic Dividend in India will remain only theoretical unless our manpower becomes more educated, aware, skilled and creative.” What measures have been taken by the government to enhance the capacity of our population to be more productive and employable? (2016)
Q:2 “While we flaunt India’s demographic dividend, we ignore the dropping rates of employability.” What are we missing while doing so? Where will the jobs that India desperately needs come from? Explain. ? (2014)
Source: TH
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