Demographic Dividend in India

Topics: Demography, Demographic economics, Population pyramid Pages: 11 (3557 words) Published: July 8, 2013
The debate over relationship between population growth and economic development is there since the much criticized theory of Malthus in 18th century. Economist focused on the size of population and the growth of nation, but the composition of population age structure was not considered until the study of Coale and Hoover (1958), but in recent years, demographers Bloom et al have studied the type of composition of age structure of population and its effect on economic growth and the concept of “demographic dividend” emerged. Demographic dividend is defined as a rise in the rate of economic growth due to a rising share of working age people in a population. This phenomenon occurs with a falling birth rate and the consequent shift in the age structure of the population towards the adult working ages. It is also commonly known as the demographic gift or bonus or demographic window. The demographic dividend, however, does not last forever. There is a limited window of opportunity. In time, the age distribution changes again, as the large adult population moves into the older, less-productive age brackets and is followed by the smaller cohorts born during the fertility decline. When this occurs, the dependency ratio rises again, this time involving the need to care for the elderly, rather than the need to take care of the young. In addition, the dividend is not automatic. While demographic pressures are eased wherever fertility falls, some countries will take better advantage of that than others. Some countries will act to capitalize upon the released resources and use them effectively, but others will not. Then, in time, when the window of opportunity closes, those that do not take advantage of the demographic dividend will face renewed pressures in a position that is weaker than ever. Window of demographic opportunity in India

India is in the midst of a major demographic transition. That transition started about 40 years ago and will likely last another 30 years. As a simple quantitative matter, about a quarter of the projected increase in the global population aged 15–64 years between 2010 and 2040 will occur in India. The working-age ratio in the country is set to rise from about 64 percent currently to 69 percent in 2040, reflecting the addition of just over 300 million working-age adults. This would make India—by an order of magnitude—the largest single positive contributor to the global workforce over the next three decades. Another estimate by Ian Pool suggests that by the year 2020, 136 million Indian youngsters will join the global workforce. Compared to this enormous number which accounts 17% of total global workforce, China will add only 23 million people and the USA will increase its working age population by 11 million during this period. India’s total population (currently a little over 1.2 billion) is projected to grow by as much as the total current population of the US. The report of technical group on population projection shows the change in population and age structure composition in India. Comparing two point of time it is seen that the base of the population pyramids shrinks in 2026 and population concentrates on middle ages. So as a result the dependency ratio will be falling significantly. In this falling dependency ratio young dependency will contribute the lion’s share. As the dependency ratio falls more resource will be released which can be used for investment purpose. The population pyramid for 2026 shows the concentration of huge population on working age group. If properly trained this population

Source : Report of the technical group on population projection, RGI.

States| Percentage share of States in total projected population increase during 2001-26| Median age of projected population during 2001- 2026| | | 2001| 2026|
Himachal Pradesh| 0.4| 24.43| 35.14|
Uttaranchal| 0.9| 21.48| 30.55|
J&K| 0.9| 21.59| 32.48|
NE states| 1| 21.22...
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