How India can leverage its biggest strength

Source: The post is based on the article “How India can leverage its biggest strength” published in “The Indian Express” on 6th July 2023.

Syllabus: GS 2 – Issues related to development and management of Human Resources

News: India’s present demographic scenario is extremely favorable, with an average age of 29 years. This youthful population sets India apart from other populous nations and presents a unique advantage for the country’s economic growth.

What is the present demographic scenario in India and around the world?

India’s demographic advantage: India’s present demographic scenario is extremely favourable, with an average age of 29 years. This youthful population sets India apart from other populous nations and presents a unique advantage for the country’s economic growth.

The aging global scenario: Contrarily, the global scenario is characterized by aging populations, especially in developed countries. For instance, the average ages in the US, China, France, Germany, and Japan are significantly higher, ranging from 38 to 48 years. Moreover, these nations are expected to witness higher old-age dependency ratios by 2075, with Japan at 75.3%, France at 55.8%, the US at 49.3%, the UK at 53%, and Germany at 63.1%.

India’s golden opportunity: Given these circumstances, the next 25 years could be the golden era for India, leveraging its youthful workforce to drive economic growth and progress.

What are lessons from Asia’s Growth Stories?

Asia’s economic triumphs: Asian countries like China, Japan, South Korea, Malaysia, and Singapore serve as ideal examples of leveraging demographic dividends. Notably, China, with an almost 10% annual growth rate over four decades, transformed its economy through labour-intensive manufacturing.

Key strategies: These nations strategically moved their labour force from agriculture to manufacturing and services, resulting in consistent growth and reduced old-age dependency. This shift was backed by structural transformations, including infrastructural development, labour law reforms, and trade facilitation measures.

Implication for India: These growth stories underline the necessity for India to focus on similar transformative strategies, especially in labour-intensive manufacturing sectors, to fully capitalize on its favourable demographics.

What are the Indian government’s initiatives to reap the demographic dividend in India?

Skill development initiatives: The government has launched programmes like Jan Shikshan Sansthan, Pradhan Mantri Kaushal Vikas Yojana, and National Apprenticeship Promotion Scheme to improve employability through skilling, re-skilling, and up-skilling. These initiatives aim to make the Indian labour force more productive and efficient. The MSDE Vision 2025 further aims to improve the linkage between education and skill.

Healthcare reforms: The Ayushman Bharat and Swachh Bharat Mission seek to improve health equity in India. The Pradhan Mantri Bhartiya Janaushadhi Pariyojana aims to make drug prices affordable and accessible, enhancing overall public health.

Education policy: The National Education Policy 2020, alongside the Samagra Shiksha programme, is focused on providing inclusive, equitable, and quality education at all school levels, ensuring a productive labour force in the future.

Support for MSMEs: Recognizing MSMEs as the backbone of Indian manufacturing, the government has endeavoured to support them in improving competitiveness, achieving scale, digital infrastructure, technology upgrades, and branding.

Flagship programmes: The government has introduced flagship programmes like Skill India, Make in India, and Start-up India to enhance the productivity of the labour force and to foster innovation and entrepreneurship.

What should be done?

India’s young demographic offers a unique advantage for economic growth. However, capitalizing on this opportunity requires several strategies: transitioning the labour force from agriculture to manufacturing and services, bolstering MSMEs, enhancing skilling programs, and improving health and education services. These steps, combined with accelerated policy reforms and effective execution of initiatives like Skill India, Make in India, and Start-up India, will enable India to fully harness its demographic dividend.