Essay- Demographic Profile of India- Opportunity or Threat

India is experiencing the phase of demographic transition which shows a sign of maturity. Every
third person in India is a youth. By 2020, median age of our country will be 29 years, making it
the youngest country in the world. 64 % of the population will be in the working age group. If
sensibly/astutely utilized, this young population can be transformed into a productive workforce
giving our country a Demographic Dividend. Current demographic profile gives us tremendous
opportunity to have an unprecedented edge over other economies and add significantly to our
GDP growth rate. But opportunity and threat are the two sides of the same coin. If not exploited
properly, this demographic dividend may, well, turn into a demographic nightmare. This may
happen because the lost opportunity to create employment for the youth who comprise a major
share of the indian population would render them vulnerable and may force them to engage in
non-productive and unlawful activities. Moreover, the opportunity is only transitory as low fertility
rate combined with low death rate would gradually make the demographic dividend vanish. India
would have an increasingly larger share of elderly population due to compounding effects of the
low fertility & death rates as the lower birth rate would mean relatively lesser addition to youth
population. Hence, the transition provides only a small window to reap the benefits of this
demographic dividend failing which not only mars the future prospects of India but also turns the
very opportunity into a possible threat.
Demographic dividend of India is best exhibited in terms of its dependency ratios. As per World
Bank figures, the youth dependency ratio and old age dependency ratio stood at 45% and 8%
respectively in 2014. To get an exact picture, we can compare these figures with those of other
developing and developed nations. Japans elderly dependency ratio which stands at 42% and
and USs 22% are approximately 5 and 3 times that of India. Indias elderly dependency ratio is
even lower than the world average (10%) and that of its close competitor China, whose elderly
dependency ratio stands at 12% and who has recently done away with its one-child policy owing
to the growing concern of ageing population.
However, Indias youth dependency ratio is almost twice as those of China (23%) and Japan
(21%). Moreover, it is also higher than the world average which stands at 40%. The high youth
dependency ratio of India means that a major share of human and financial resources are being
engaged towards meeting Childrens provisional requirements - primary health-care, primary
education and other household needs. Nevertheless, the lower elderly dependency ratio
presents an opportunity to India to be able to allocate more of its resources towards meeting
nourishment and development needs of the younger lot who would make a healthier and more
productive workforce in the near future. A lower elderly dependency ratio implies lesser
expenditure towards health services, pension funds and other social schemes for old age
people. The favorable elderly dependency ratio would help boost savings and investment,
spurring growth of the economy in the long run,.

Demographic dividends could be capitalized by implementing/utilizing different factors. The first

of the factors is the bulging of working force as the youth reaches the employment age.The
second is the investing in technological development, vocational & skill-based training and
setting up industries.The third is integrating women in workforce which is followed by reduction
in fertility rates. Last one has to do with enhancement of savings as working years are prime of
savings which is the key to accumulation of capital and driver of innovation.

However, the favourable circumstances of demographic profile is not sufficient enough to

guarantee the growth, but suitable policies are required to provide a fertile ground to harvest the
riches of advantageous demographic structure. Without such policies India may find itself with
humongous number of unemployed or inadequately employed working age people which could
prove to be a recipe of economical and social disaster. Moreover, that would be a lost
opportunity which comes seldom in a countrys timeline.
To address the above challenges, we need to find ways to minimize and then gradually
vanish/nullify the mismatch between skills and job requirement. Currently, only 11% of 15-59
year old have vocational training. Also, current capacity is a fraction of millions of new entrants
into the workforce every year. We need robust systems for large scale skill training and
certification to meet the demands of such a huge young population. But varying socio economic
conditions of our country poses a huge challenge to have a standardized training program.
Nearly one-third of the population lives below poverty line. This population struggle to afford
basic amenities, leave aside education and training. Around two-third of our population live in
rural areas. As per reports in 2013, a person living in rural areas have 52% lesser chance of
acquiring training than someone in urban areas. So, there is an immediate need to access this
persistent problem of unequal opportunity and lack of emphasis on education.
These large scale programs should not only adhere to the best quality but should also be
consistent with the industry needs. Skill and Training should be such that it should make high
cost labour training for the industries redundant. According to a recent survey, 80% of the
engineers in our country are unemployable. We need to reevaluate our education system and
should align it will the need of the hour.
Moreover, a higher participation of women in the workforce needs to be achieved. As per world
Bank figures, the women participation rate in Indian workforce stood at 24% in 2014. This is
significantly lower than the world average which stands at 40% and those of developed nations
like Japan, United States and Netherlands who have consistently higher women participation
rate of more than 40%. Even China has a women participation rate of 44% considerably higher
than that of India. and A very low female-labour participation rate as compared to world average
hints at the need of taking proactive steps to increase participation of women in the workforce.
Improving female literacy, increasing employability by giving them better access to higher
education, providing multiple incentive schemes for girl education from state and central
governments are few of the measures proposed.
We need to understand that extraction of demographic dividend relies on an economys ability to
assimilate working force into productive work. This ability can be reinforced by:
Efficient governance - It should be participatory, consensus oriented, accountable, transparent,
responsive, effective and efficient, equitable and inclusive and follows the rule of law.
Government has come up with DIgital India initiative for the same. What needs to be ensured is
the continuity, accountability and regular improvements in the same based on the situation and
need.
Optimized infrastructure - Improving project selection and optimizing infrastructure portfolios.
Reliable transportation, telecommunications, power & water supply, sanitation,industrial and
agricultural needs. Coordination among infrastructure institutions
Pragmatic fiscal & economic management - Policies that keep inflation reasonable, reform in
tax structures, improving profitability of public sector enterprises, ameliorate trade imbalances

 Increased spending on education and training (strength in all levels of schooling for females
and males of all income levels and castes, job training for workers to keep up with new types of
services and industries).
There is a need to improve the quality of education in our government schools so that every
child gets equal opportunity to learn. Steps should be taken to encourage teaching as a
profession and better screening of teachers need to be done. Finland has an excellent
education system which lays down the strong foundation for their youth. Some positives should
be derived out of the FInlands system and be adopted in our system depending on our
demographic profile.
Vocational Training- There should be industry led skill development programmes. Corporate
houses are the one who has the best knowledge about the changing market dynamics.They
should play a vital role in shaping and evolving the skill development infrastructure in India.
They should strategically channelize funds allocated for corporate social responsibility to
support skill development initiatives for development.
Investment in technology- Avant-garde technology is another important pillar that is required to
sustain the
Health- All the policies to strengthen the youth of the country will only be effective if people are
in good shape and health. Infrastructure and facilities at government hospitals should be
improved to match the state of the art. Steps should be taken such that people at the bottom of
the socio-economic pyramid can also avail the same facilities and can compete equally with the
ones at the top. Initiatives like Arvind Eye Hospital is an excellent example which is trying to
bridge this gap. Government should support such initiatives and encourage others to follow the
similar path.

India is a union of states with varying demographic profiles which provide distinct dividends.
They are at different stages of economic development, thus one model fits all approach wont
work for India. When we compare the states in southern and western India, those states have
already experienced demographic transition which provided impetus to India during 1980s and
1990s. Meanwhile, the comparatively backward states belonging to Hindi heartland reaped a
meager dividend in 1980s and 1990s. But, the process have already started. Bihar, one of the
most underdeveloped states of India grew at phenomenal average rate of 24% in last 5 years
and this has been attributed to good governance and growth related policies.
Considering this, it is obvious that One-size fits all model will not work with India. Policies
should be tailored to reap the maximum demographic dividend out of states.