“India’s demographic dividend has the potential to be its greatest strength or its biggest liability.” Discuss in light of India’s demographic transition, and policy measures required to harness this potential. (250 words)

Defined by UNFPA, Demographic Dividend as the economic growth potential arising from a shift in a population’s age structure when the working-age population is larger than dependents. India’s demographic dividend window spans five decades (2005–2055), the longest globally, expected to peak around 2041 when the working-age population will be 65%.

Opportunities from Demographic Dividend:

• Labour Force Expansion: By 2030, India will have 800+ million workers, among the world’s largest labour forces (OECD).
• Economic Growth: Advanced economies attribute 15% of GDP growth historically to demographic dividends.
• Capital Formation: Declining fertility leads to higher household savings which contributes to higher national investment. India’s gross domestic savings rate rose to 30.2% in 2023.
• Women Empowerment: Falling fertility enhances women’s workforce participation (Female LFPR has risen from 19.7% in 2011 to 37% in 2023).
• Innovation and Startups: India has the 3rd largest startup ecosystem after US & China. Young risk-taking entrepreneurs can fuel innovation.
• Global Influence: India can emerge as a global manufacturing hub and talent exporter.

Challenges: Risks of a Demographic Disaster:

• Poor Human Capital: Only 20–30% of engineers are employable (ASSOCHAM). Graduate employability is at 45% (Graduate Skills Index 2025).
• Low Human Development: India ranks 134/193 in HDI (2022); poor health & nutrition (rank 111/125 in Global Hunger Index 2023).
• Jobless Growth: LFPR 50.2% (2023-24); India needs 10 million jobs annually. Risk of automation displacing 92 million jobs by 2030 (WEF).
• Informal Economy: 93% workforce employed in informal sector with low wages and no social security.
• Gender Gaps: Female LFPR still low at 37%, limiting full utilization of labour force.
• Regional Imbalances: Southern states aging faster, while northern states hold the labour reservoir creating potential for inter-state imbalances.

Way Forward:

1. Human Capital Development:
   1. Invest in health care such as Ayushman Bharat, ICDS.
   1. Improve learning outcomes and enhance health spending at least till 3% of GDP.
2. Skilling and Education:
   1. Strengthen Skill India Mission, NSDC and revamp curriculum for AI, green jobs, digital economy.
3. Employment Generation:
   1. Boost MSMEs, startups, and manufacturing and pursue Ease of Doing Business reforms can boost job creation.
4. Women Empowerment:
   1. Gender-sensitive labour policies, childcare, flexible work.
5. Balanced Regional Development:
   1. North-Central states to absorb youth workforce.
   1. Centre-state coordination in migration, skilling, and employment hubs.
6. High-Level Policy Mechanism:
   1. Establish National Task Force on Demographic Dividend under PM’s leadership for inter-ministerial coordination.

Conclusion:

India’s demographic dividend is a time-sensitive opportunity. With the right policies in education, skilling, healthcare, and job creation, it can power India’s rise as a global economic leader. Thus, urgent, sustained, and inclusive reforms are essential to convert this youth bulge into a growth engine.

‘+1’ Value Addition:

• According to UNFPA (2023), India has overtaken China as the most populous country with 142.86 crore people.
• India, with over 62.5% of its population in the working-age group (15–59 years), holds one of the youngest populations globally.
• As per ILO, India needs to create 1.3 crore jobs annually to absorb new entrants.
• Between 1965–1990, demographic dividend contributed 1/3rd of GDP growth in countries like South Korea, Singapore.
• “India’s youth can be the engine of growth or the burden of tomorrow.” – Amartya Sen.

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