Q.28 Write a short note on India’s policy steps regarding harnessing the ‘demographic dividend’.

Ans. There has been a marked decline in the dependency ratio (ratio of dependent to working age population) in India. The ratio fell down from 0.8 in 1991 to 0.73 in 2001 and is expected to further decline sharply to 0.59 by 2014. This decline sharply contrasts with the demographic trend in the industrialised countries and also in China, where the ratio is rising. It is projected that the proportion of population in the working age group (i.e., 15– 64 years) in India will increase from 62.9 per cent (2006) to 68.4 per cent in 2026.

Low dependency ratio and a high proportion of the working population gives India a comparative cost advantage, and a progressively lower dependency ratio will result in improving India’s competitiveness in the global economy. The Government of India seems fully aware of this advantage and that is why the Eleventh Plan (2007–12) is implementing a three-pronged strategy to tap demographic dividend:

(i) Ensuring proper healthcare to all,

(ii) Emphasis on skill development (knowledge industry), and

(iii) Encouragement of labour intensive industries.

The proportion of economically active population (15–59 years) has increased to 57.7 per cent during 1991 to 2013 (latest National Sample Registration–2013). Projections suggest that the working age group population share will continue rising till about 2035-2040, meaning that India has another 25 years to exploit this dividend (Economic Survey 2015–16). Demographic dividend is an ‘opportunity not destiny’—India needs to plan to reap its benefits.