Until recently, India’s large population was considered to be a huge barrier to prosperity and progress. Economists predicted that India was a “population bomb” waiting to explode.
- However, in the post-liberalisation era, with China showing the way and proving that a massive population can be harnessed for societal and economic progress, a new mantra is being chanted—demographic dividend.
What is Demographic Dividend?
Demographic dividend, as defined by the United Nations Population Fund (UNFPA) means, “the economic growth potential that can result from shifts in a population’s age structure, mainly when the share of the working-age population (15 to 64) is larger than the non-working-age share of the population (14 and younger, and 65 and older).”
- In other words, it is “a boost in economic productivity that occurs when there are growing numbers of people in the workforce relative to the number of dependents.”
Challenges before policy makers:
Technological change is making labour partially or wholly redundant in a number of sectors, across the world. Even where labour is still necessary, increasing complexity of production requires labourers to have a minimum skill level that is much higher than the skill level required during the labour-intensive output boom in China and South-East Asia in the past decades.
- The paucity of good quality schools, proper infrastructure and facilities, and well-trained teachers poses enormous challenges in primary and secondary level education.
- The huge dropout rate—more than half of India’s literate youth drop out of the education system by the age of 15—is a cause for concern.
- There is also the politically volatile issue of caste-based reservations in higher education which has become a source of continuous strife for the youth across all states in the country. Denying meritorious students the opportunities in higher education that they rightly deserve—due to political reasons—is damaging both for the nation and for the morale of the youth.
- Then there is the fractious issue of medium of instruction at schools. The debate over the preference for English—which is the global language of business—versus regional languages continues endlessly.
The issue of Job Satisfaction:
An alarming aspect of the current employment situation is that a large proportion of employees are not in a very happy situation. According to a study, nearly 40% of employed people are not satisfied with their job profiles. The major reasons for dissatisfaction cited are un-secure jobs, low salaries, stressful environment, and mismatch between job and qualification.
Composition of women workforce:
Another appalling concern is that a significant proportion of qualified women drop out of the workforce for reasons ranging from no suitable jobs in the locality—particularly in rural areas—to family responsibilities and marriage. This is not only a huge loss of valuable human resource, but also has a deleterious impact on family incomes.
In the absence of good quality universal education at the primary, secondary and tertiary levels, India continues to produce poor quality workforce.
- There are roughly 480 million people (38%) who belong to the working-age group in India. Of these, 62% reside in rural India and nearly 73% of them (333 million) are literate.
- Currently, a little over 10% (48 million) of literate youth are graduates or have higher degrees. Nearly 53% of the youth have studied up to the higher secondary (12th class) level.
- Currently, 60% of graduates, 70% of post-graduates and 85% profession degree/diploma holders are from urban India.
Despite strides made by successive governments in achieving the goal of education for all, India continues to lag behind other developing countries.
What needs to be done?
To be able to harness the potential of this large working population, which is growing by leaps and bounds, new job generation is a must. The nation needs to create ten million jobs per year to absorb the addition of young people into the workforce.
- Improved infrastructure, skill development, access to easy finance, reducing barriers to entrepreneurship and forums for mentorship of emerging entrepreneurs in partnership with corporates are some of measures.
- The current situation calls for more and better schools, especially in rural areas. It also calls for better transportation links between rural areas and regional urban hubs.
- The government must also ensure better quality of jobs with a focus on matching skill-sets and job opportunities.
- There is a need to look into these qualitative issues of job satisfaction, job profile and skill matching, and the creation of opportunities for entrepreneurship in order to be able to harness the vast potential of human resources.
It is imperative that policy-makers deal with the situation on multiple fronts. Universal education, value-added skills accretion and massive growth in employment in the formal sectors should be the key focus areas. Unfulfilled aspirations of the youth can quickly turn to frustration, leading to violent outbursts. There is also a need to engage with the youth and create an enabling environment for entrepreneurship. Failure to do so would not just mean a missed opportunity in terms of harnessing the demographic dividend, but the ensuing rise in unemployment and poverty could undermine the advances made on the economic front and foment societal upheaval.