Reaping the demographic dividend

Source: The post is based on the article “Reaping the demographic dividend” published in The Hindu on 4^th August 2022.

Syllabus: GS 1 – Population and associated issues.

Relevance: About the recent UNPD report on population.

News: World Population Prospects 2022 forecasts that the world’s population will touch eight billion this year and rise to 9.8 billion in 2050.

About China’s population policy

A long-time critic of China’s population policy believes that without the one-child policy, China’s population would have naturally risen and peaked at 1.6 billion in 2040. This would allow them to reap a much longer “demographic dividend.

At the present policy by 2050, China will have only 1.3 billion people, of whom 500 million will be past the age of 60.

About the demographic dividend in India

In contrast, India’s population would have peaked at 1.7 billion, of whom only 330 million will be 60 years or older. India is getting a demographic dividend that will last nearly 30 years.

Deloitte’s Deloitte Insights (in 2017) expects “India’s potential workforce to rise from 885 million to “1.08 billion people over the next two decades from today.” The insights contends that “the next 50 years will be an Indian summer that redraws the face of global economic power.”

McKinsey & Company’s report, ‘India at Turning Point’ (in 2020) suggested how India can “create $2.5 trillion of economic value in 2030 and support 112 million jobs, or about 30% of the non-farm workforce in 2030.” These include digitisation and automation, shifting supply chains, urbanisation, rising incomes and demographic shifts, and a greater focus on sustainability, health, and safety are accelerating.

How do India and China reap their demographic dividends?

India today is compared to China, the only country it can be reasonably compared to. The Great Leap Forward and the Cultural Revolution in China fuelled China’s growth for decades.

The IT technologies in India have matured exponentially. Now the IR can revolutionise learning and transform Indian society at an astonishingly low cost.

India does not have a Hukou system which in China attaches rural folk to rural parts creating a deep divide between urban China. But the Hukou system disincentivises migration to urban areas. For instance, only about 36% of China’s overall population is urban.

What India should do to reap its demographic dividend?

The major challenges in reaping demographic dividend are a) India’s bad infrastructure, b) poorly skilled workforce that will impede growth. Hence, India should focus on both.

India needs to invest massively in quality schools and higher education as well as healthcare.

India must seize the moment and not be incremental in its approach.