Demographic Dividend
- Definition – The demographic dividend refers to the economic benefit that arises from a favourable demographic structure, where the working-age population exceeds the dependent population, leading to increased productivity and economic growth potential.
Prospects and Challenges of Demographic Dividends in the Indian Context
Prospects
- Economic Growth: Offers potential for accelerated economic growth.
- Labor Force Expansion: This allows for significant expansion of the labour force, which can meet the demands of various industries and sectors.
- Entrepreneurship and Innovation: With a youthful workforce, there is a higher likelihood of entrepreneurship and innovation.
- Increased Consumption: A growing workforce implies higher consumption levels.
- Global Competitiveness: Through a skilled workforce and attracting FDIs.
Challenges
- Unemployment: Lack of employment opportunities for its growing population.
- Skills Mismatch: A mismatch between the skills possessed by the workforce and those demanded by industries, resulting in a lack of employability among the youth.
- Informal Sector Dominance: A significant portion of India’s workforce is employed in the informal sector, characterised by low wages, lack of job security, and limited access to social benefits.
- Social Inequality: The benefits may not be evenly distributed, leading to widening income inequality, social disparities, and marginalised populations being left behind.
- Education and Healthcare Challenges: Inadequate investments in education and healthcare can hinder human capital development.
- Ageing Population: While India currently enjoys a demographic dividend, there is a risk of this advantage turning into a demographic burden in the future as the population ages, potentially leading to increased dependency ratios and healthcare costs.