[Answered] To bring the best out of its demographic dividend, India needs to invest massively in quality schools and higher education, as well as healthcare. Discuss

Demographic Dividend is the economic growth potential that can result from shifts in a population’s age structure, mainly when the share of the working-age population is larger than the non-working-age share of the population. The demographic dividend leads to an increased labour supply that will increase the production of goods and boost savings and investment on the other.

Why there is need of massive investment?

• Low human development:India ranks 131 out of 189 countries in UNDP’s Human Development Index, which is alarming. The mean years of schooling and expected years of schooling and need to be improved.
• Informal economy: where not only they earn lower wages, but with little social security and few days of employment in a year.
• Jobless growth:There is a mounting concern that future growth could turn out to be jobless due to deindustrialization, de-globalization, the fourth industrial revolution and technological progress.
• Asymmetric demography: The growth in the working-age ratio is likely to be concentrated in some of India’s poorest states and the demographic dividend will be fully realised only if India is able to create gainful employment opportunities for this working-age population.
• The increase in the working-age population may lead to rising unemployment, fuelling economic and social risks.

What can be done?

• Invest more in children and adolescents: There is need to spend on nutrition, learning during early childhood, help students transition from secondary education to universal skilling and entrepreneurship.
• Health investments: The public spending on health in India has remained flat at around 2% of GDP. Evidence suggests that better health facilitates improved economic production.
• Education: It works as an enabler to bridge gender differentials.  In India, boys are more likely to be enrolled in secondary and tertiary school than girls. In the Philippines, China and Thailand, it is the reverse.
• Increase female workforce participation in the economy: Increase in female workforce participation will likely delay the age of marriage for women and make her participate in the economy more productively, as also exercise her rights and choices.
• Address the diversity between States: Southern States are advanced in demographic transition and already have a higher percentage of older people while the north-central region is the reservoir of India’s workforce.

India can learn from other countries like Singapore, Taiwan and South Korea. They have already reaped the benefit of their demographic dividend to achieve incredible economic growth by adopting forward-looking policies.