Editorial: Reaping demographic dividend

Unemployment, jobless growth, falling female labour participation are some of the challenges facing India

The tag of being the world’s most populous country need not be a cause of alarm for India but can open a window of new opportunities in a world that is ageing fast with a drastic fall in fertility rate. India is the youngest among the most populous nations, with an average age of 29 years. And, the country’s working-age population is rising. This gives India a unique opportunity to reap the benefits of its favourable demographic composition, which can boost its economic growth and social development. However, to realise this potential, the country should address some key challenges and implement strategic reforms in various sectors. Unemployment, jobless growth, falling female labour participation and lack of skill upgradation are some of the challenges facing the country. Public investment in education, skill development and creating opportunities, especially for the youth of disadvantaged sections and women, will hold the key to India using the demographic dividend to its advantage in the next two decades. India outstripping China in terms of population has come as no surprise because it has been anticipated for some time now. But what has expedited the process is the fact that China’s growth has been slowing considerably. Demographers use a variety of metrics — fertility and replacement rates, age and region-wise data — to arrive at a far more layered understanding of population dynamics compared to the time when the country launched its first family planning programme.

A positive aspect of India’s population growth is an inbuilt opportunity for a demographic dividend. The latest UNFPA report says that more than two-thirds of India’s population comprises people between the ages of 15 and 64, considered the working population of a country. India has a huge labour force of about 500 million people, which is expected to grow further in the coming years. However, most of them are either unskilled or under-skilled, and face low productivity and employability in the changing market scenario. Another area of concern is the declining levels of women’s participation in the labour force. World Bank data shows that female labour participation in India plunged from 32% in 2005 to 19% in 2021. This is a key reason for the country being slow to take advantage of its large working-age population. It requires a shift from the low-productivity agriculture sector to the higher-productivity manufacturing and services sectors, which can absorb more labour and generate income. The population of young people in the age group of 10-24 years was 365 million as per the 2011 Census and it is projected to touch 379 million in 2023. For a country with the largest youth population, formulating effective policies beneficial for the huge workforce is the key. There is a need to enhance the quality and relevance of skill development programmes, aligned to the industry requirements, global standards and emerging technologies.

---