- Demographic dividend occurs when the fertility and mortality rates decreases and thereby economic growth of the country increases. If fertility and mortality rates decreases, there will be fewer mouths to feed & the life expectancy will increase, so, education and skills should be imparted to fewer people, and as a result productive labour force increases. It automatically contributes to country’s economy.
- First stage of demographic dividend – Labour force increases rapidly than the dependent population. Per capita income grows.
- Second stage of demographic dividend – No. of old people will increase as the life expectancy is improved. Less no. of children should support older generation, because of lower fertility rates.
- By 2020, Average age of Indian will be 29.
- Government has announced new policies as part of the 12th five-year plan (2012-2017) that aim to create 100 million work opportunities by 2022, many in labor-intensive manufacturing sectors such as textiles, gems and footwear.
- The government is working to expand access to education and vocational training for workers in the countryside, including new rural broadband networks that will connect remote areas with educational opportunities like YES project, Himayat project etc.
As an asset :-
- No. of dependents decreases, and hence individuals can save more. This leads to the increase in the stock capital in developing countries.
- Low economic pressures at home because of less no. of children. It results in better health and education for children.
- GDP increases and dependency ratio decreases.
- Women will be healthier.
- Productive labour force will increase.
- If population reduces, Standard of living increases.
- According to the United Nations, the working-age population will increase by about 600 million globally in the next decade. While there will be a decline in the developing countries by almost 17 million, the global economy as a whole is expected to experience a skilled manpower shortage of 56 million by 2020. So, with the right skills and training, workers from India will prosper not only at home but also abroad.
- By 2020, the average Indian will be only 29 years of age, compared with 37 in China and the U.S., 45 in Western Europe, and 48 in Japan. This is a great opportunity for India to beat the other countries economically.
As a liability :-
- Failure to provide opportunities to the growing young population, will result in rising unemployment and anti-social activities.
- In the second stage of demographic dividend, the no. of retired & older people increases rapidly, thereby dependent population increases.
- Present Education system is not imparting practical knowledge and skills. It is a bigger obstacle to increase skilled workforce.
- According the report, titled “The National Employability Report, Engineering Graduates, Annual Report-2012,” although India produces more than 500,000 engineers annually, only 2.68% meet the skill requirements of the IT products sector. The report estimated that nearly 92% of engineering graduates in India lack computer programming and algorithms skills and around 56% lack soft skills and cognitive skills. This is leading to unproductive labour.
- Increased life expectancy will be challenged by health care facilities & social security for old people.
- Burden of parents and grand parents have to shared by less no. of children.
What should be done :-
- Govt should invest more in education, skill upgradation and employability by imparting special training to underprivileged and poor in a society.
- Education system must be improved to focus on improving technical capabilities to match with the industry requirements. Quality of education should be improved.
- Govt should invest more on health, safety and related services, will results in affordable healthcare.
- Pension schemes can be reformed by introducing funded element, in which individual’s contribution increases and a capital sum is delivered at retirement.
- There is a need for encouraging saving behavior amongst the working age population, by giving various incentives like tax benefits, better returns etc.
Afterwords :- What are your thoughts on this topic? Feel free to express your opinion in the comment section below.