This cuts spending on dependants, spurring economic growth. India is set to have one of the youngest populations in the world by 2020, as well as a growing aspirational and lower middle class which is supposed to important contributor in growth and the demand factor.
While most of the countries of developed western world as well as many of the developing countries like China are likely to face shortage of working population in coming decades, India will have the youngest population, thanks to the failure to successfully implement the Family Planning Programme. All over the developed world, population is shrinking and aging at a rapid pace, be it Europe, the US or Japan. The impact is possibly the worst in Japan where over 22.5 per cent of the population is over the age of 65, which is expected to increase to 40 per cent by 2055.
It is estimated that the Japanese population of 128 million could come down to 96 million by 2050 and 64 million by 2100. In 2007, there were 29,000 few Japanese than a year before. Their economic growth has been affected in the last decade and the prospects for the next two decades are bleak as the working age population continues to decline.
By 2020, the average Indian will be only 29 years old, compared to 37 years in China and US; 45 years in West Europe; and 48 years in Japan. In effect, in eight years, workers elsewhere would have crossed the prime of their working lives, inching towards retirement with claims on a working and youthful shrinking population
India can count several advantages here. While India would be going through the most exciting phase of economic development ever over the next 20 years, with the potential to grow its economy by over four times.
The dependency ratio in India has fallen to 56 per cent in 2010 against 65 per cent a decade ago, and is...