“Indeed India’s demographic dividend
will turn into a demographic disaster as large numbers of unemployed youth
provide foot soldiers for all kinds of agitations – whether Patelist, casteist,
regionalist, communalist or communist. That’s why it’s vital to push reforms
now”.
TOI Editorial
While addressing a gathering at the Townhall event at the Facebook’s
sprawling headquarters in Menlo Park near Stanford University on September 27,
2015, Prime Minister Narendra Modi made a bold claim that “the 21st
century will be an Indian century”. It is because India is blessed with 3 Ds - Demographic
Dividend, Democracy and Demand. According to PM Modi these three things are present in one country,
this is not there anywhere in the world. In other words, blessed with a vibrant
democracy, with 65 percent of its people under the age of 35, and a market of
1.25 billion people, it is widely
believed that India will cross new heights in this century. “India is
among the few bright spots in the global economy”, as per the IMF Chief
Christine Lagarde.
Among three Ds,
first one – ‘Demographic Dividend’ - is most important and PM Modi has seldom shied away from referring
about it. The term was coined by the
team led by Harvard economist David Bloom
in the nineties. The concept is based on
the premise that population age structure, more
than size or growth per se, affects economic development, and that reducing high fertility can create
opportunities for economic growth if the “right kinds of educational,
health, and labor-market policies are in place”.[1] In other word, the demographic
dividend occurs when a falling birth rate changes the age distribution, so that
fewer investments are needed to meet the needs of the youngest age groups and
resources are released for investment in economic development and family
welfare. [2]
We are time and again reminded that India has one of the largest proportions
of population in the younger age groups in the world. The median age
is a single index that summarizes the age distribution of a population. It
divides a population into two numerically equal groups; that is, half the
people are younger than this age and half are older. The median age of population in India was 25
years in 2010, as against 35 in China, 37 in USA, 44 in Germany and 45 in
Japan. The corresponding figures would be 37, 49, 40, 49 and 52, respectively
in 2050.
With around two-third of the
population (around 795 million) under 35 years of age that is young population
in 2011, India can afford to dream to become economic power in the world before
the middle of this century. Of this 48.2 per cent are women and 51.8 per
cent are men, 30.1 per cent reside in urban areas and 69.9 per cent is based in
rural India. India’s young population has risen significantly in the last 20
years from 605 million in 1991 to 795 million in 2011, thereby opening a window
of demographic opportunity. Now question arises whether India is geared enough
to garner its demographic gift?
The conventional
view is that India will be able to put all these people to work because of its
relative strong education system, entrepreneurial zeal, and strong links to the
global economic mainly due to the proficiency in English. “All that is real, but India is already
showing some of the warning signs of feared growth stories, including early on
set of over confidence”, as noted by Ruchir
Sharma in his book: Breakout Nations:
In Search of The Next Economic Miracles (2012). He writes further: “Yes, a growing
pool of young workers can be huge advantage, but only if a nation works hard to
set them up for productive career” (page 56).
No doubt, when
conditions are right, large numbers of young workers can drive a nation’s
growth to remarkable levels, as has been seen in most of East and South-East
Asian Economies. An analysis of Table 1, however, places talks of India’s
‘demographic dividend’ in stark bleak perspective. It is because a sizable
proportion of this young population is a result of unwanted fertility. Based
on the National Family Health Survey-3 (IIPS, 2007), it is estimated that about 34 per cent or around 272 million
young people in the age group 0-35 in
2011 was the product of unwanted childbearing. The proportion of young
population resulting from the unwanted
fertility has increased significantly from 21 per cent in 1991 to 26 percent in
2001 to 34 percent in 2011 (Col. 4), mainly due to lack of client centred
family planning services . [3]
Table 1 India: Trends in level of young population resulting
from unwanted fertility, 1991-2011.
Census year
|
Total population
(in million)
|
Total population aged 0-35
(in million)
|
Total population aged 0-35 result of
unwanted fertility (in million)
|
Per cent of total unwanted population
in age group 0-35
|
1
|
2
|
3
|
4
|
5
|
1991
|
846.4
|
605.2
|
127.7
|
21.1
|
2001
|
1028.7
|
720.0
|
190.0
|
26.4
|
2011
|
1210.8
|
794.3
|
272.4
|
34.4
|
Computed by the
author by using Fertility Planning data obtained from National Family Health
Survey 1, 2 & 3 and Registrar General of India. For details, see: Devendra Kothari,
“Implications of Emerging Demographic Scenario: Based on the Provisional
Results of Census of India 2011”, A
Brief, a publication of Management
Institute of Population and Development – A Unit of Parivar Seva Sanstha, New
Delhi, 2011
|
||||
Further, Table 2 indicates that distribution of unwanted young population is very unevenly
distributed as compared to the general population. Most of the young population
was enumerated in the poorly developed states of India. For
example, Uttar Pradesh and Bihar accounted for 300 million or 25% of the total
population of the country in 2011. Out
of this, 213 million people are less than 35 years of age, and they make 27
percent of total young population of the country. However, due to high level of unwanted
fertility, 114 million or 54 percent of the young population of these two
states could be classified as a product of unwanted pregnancies (Col. 7, Table
2). In other words, 43 percent of total unwanted young population of the
country was enumerated in these two stares.
Table 2: Distribution of young population by
ten most populated states of India, 2011.
State
|
Total population
|
Total young population in age group 0-34 years
|
Total persons result of unwanted
child bearing in age group 0-34
years
|
|||
Persons
(in
Million)
|
%
of total population
|
Persons
(in million)
|
%
of total young population
|
Persons
(in
million)
|
%
of total unwanted persons
|
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
Uttar
Pradesh
|
199.8
|
16.5
|
139.5
|
17.6
|
74.2
|
27.3
|
Maharashtra
|
112.4
|
9.3
|
70.5
|
8.9
|
11.3
|
4.1
|
Bihar
|
104.1
|
8.6
|
74.0
|
9.3
|
40.3
|
14.8
|
West
Bengal
|
91.3
|
7.5
|
57.2
|
7.3
|
15.4
|
5.6
|
Andhra
Pradesh
|
84.6
|
7.0
|
52.6
|
6.6
|
8.1
|
3.0
|
Madhya
Pradesh
|
72.6
|
6.0
|
49.5
|
6.2
|
18.0
|
6.6
|
Tamil
Nadu
|
72.1
|
6.0
|
42.1
|
5.3
|
7.9
|
2.9
|
Rajasthan
|
68.5
|
5.7
|
47.4
|
6.0
|
17.1
|
6.2
|
Karnataka
|
61.1
|
5.1
|
38.2
|
4.8
|
10.1
|
3.7
|
Gujarat
|
60.4
|
5.0
|
39.1
|
4.9
|
9.1
|
3.3
|
Sub
total
|
926.9
|
76.6
|
610.1
|
76.9
|
211.5
|
77.5
|
Rest
of India
|
283.9
|
23.4
|
184.2
|
23.1
|
60.9
|
22.5
|
Total
(India)
|
1210.8
|
100.0
|
794.3
|
100.0
|
272.4
|
100.0
|
Computations
are based on data obtained from Census of India and National Family Health
Surveys 1, 2 and 3.
|
||||||
The consequences of unwanted fertility are serious. It results in poor
physical growth, reduced school performance, diminished concentration in daily tasks thus impacting
work capacity and work output resulting in diminished earning capacity or
productivity; and it is reflected in widespread poverty, illiteracy,
under-education (little or poorly), unemployment,
under employment, etc. [4]
As a
result, the current pool of India’s labour force has very low employability
mainly due to low productivity. If
the labour productivity is low, then employers do not hire workers. And that is
happening in India.
India graduates
more than five million graduates every year. Engineers comprise a small (but
significant) part of it at around six hundred thousand, whereas the rest take
up a variety of three or four year bachelor degree programs. The National
Employability Report 2013, [5] compiled by Aspiring Minds, reveals that a significant
proportion of graduates, nearly 47 per cent were found not employable in any
sector, given their poor English language and cognitive skills. The report
also indicates that only 17.4 per cent of technical graduates (engineers) in
the country are ready to be employed. What this also means is that the rest,
that is, 82.6 per cent, engineering graduates are unemployable. Again, their lack of English
language knowledge and cognitive skills were identified as the major obstacles
to their suitability in the job market.
As a result, job market is not expanding. Census data
reveal that the number of people seeking jobs grew annually at 2.2 per cent
between 2001 and 2011, but growth in actual employment was only 1.4 per cent.
Further, an ASSOCHAM (Associated
Chambers of Commerce and Industry of India)
study shows as many as five million jobs
were lost in India between 2004-05 and 2009-10, technically a period of high
growth. In addition, jobs are not available. For example, when the Government
of Uttar Pradesh advertised for the post of 368 peons on August 11, 2015, it
could not have guessed the response be so overwhelming. Over 2.3 million candidates applied for these
posts (over 6250 per post). The minimum qualification for the post was Class V
pass but only 53, 000 of the candidates
who had applied has not studies beyond
Class V. Rest of applicants include those with degrees like BTech, MSc and
MCom, besides 255 youths with PhDs.
It
appears that problem of unemployment has taken a serious turn and there is
apprehension of its becoming still grim in the future. According to the ILO
report, India is experiencing “jobless growth” [6]
due to the fact that total employment grew by only 1.1 million from 2004/05 to
2009/10 (based on the National Sample Survey), representing an employment
elasticity of almost zero. This shows that economic growth, even when it takes place, does not
create as many jobs as it is skewed towards capital - or skills-intensive
sectors rather than labour intensive manufacturing. Gujarat itself confirms the
picture – it is a manufacturing powerhouse that specializes in capital
intensive products such as petrochemicals, drugs and plastics. There is an
urgent need to build skills with an industry focus to avert demographic
dividend from turning into demographic bomb. The Patel unrest whose intensity
took the country by surprise could already be one manifestation of this. Clearly,
India is frittering away the opportunity of capitalizing on the 'demographic
dividend'.
The promise of ‘demographic
dividend’ will not last long. Can India take advantage of this demographic window
in the next couple of decades? Are our education and other systems geared enough to meet this challenge
today? One cannot be too optimistic about considering its poor education
system from bottom to top. It is widely believed that despite being among the world’s youngest countries, India will not reap
its demographic dividend if its education remains the mess it currently is. The Annual Status of Education Reports (ASERs),
prepared by Pratham NGO, have repeatedly shown that less than half of Class V
students can read a paragraph or do a simple arithmetic sum from a Class II
text. Indian secondary school going
children were second last in an OECD Programme for International Student
Assessment (PISA) the last time they took part (2011). Also, higher education
is not in better shape. No Indian university is currently ranked among the
world’s top 200. India is the only BRICS nation without representation in the
top 100 global universities. There may be many reasons behind this sorry
state of affairs, but the issue of unwanted fertility has also played an
important role in lowering the quality of education.[7] Winner of the 2015 Nobel
Prize in Economics Prof.
Angus Deaton, who spent a considerable amount of time working on the connection
between ‘stunting’ among Indian children, concluded that widespread growth
faltering was a human development disaster
as height reflected early life nutrition which helps brains to grow.
“There are tremendous health problems among adults and children in India…half
of the children are still malnourished”.[8]
India’s vast young population
(currently, around 900 million people are under 35 years of age) is its
strengths and therefore one has to mobilize them to go forward fast. So what need to be done to unlock India’s potential? In
other words, what should be agenda for enhancing human capital? No doubt, putting the economy back on track
should be the government’s first priority. It is because India’s demography is such that we have to create a
million additional jobs every month. This can only be done by making it easy
for job-creating businesses to run, facilitating not just big companies but
more importantly small scale industries which create the most jobs. However, for sustainable
development it is equally important to focus on human capital. Central to the human development approach
is the concept of capabilities. For this, it is must to build skills with an industry focus to avert the demographic
dividend from turning into a demographic bomb. In addition, better education will
turn India into not just a manufacturing hub but also a hub for research and
design like Silicon Valley. It is worth noting that Indian-born people have
been responsible for starting up 16 per cent of Silicon Valley’s technological
companies.
India’s demographic bulge needs not only a sustained does of quality
education from top to bottom and practical skills for employability and
productivity but also sincere efforts to minimize the incidence of unwanted
fertility to harness the demographic dividend. The World Bank estimates that the prevalence of underweight children
in India is among the highest in the world with
dire consequences for mobility, mortality, productivity and economic growth.[9] As such, reduced level of
unwanted fertility will result in fewer but wanted children and that
will enhance the quality of human capital. With fewer children parents are
under less strain to provide for many children. Family income can be focused
more upon better food for children, including girls, who are often given less
to eat. In addition, incomes can go toward prolonged education for teenagers of
both sexes to improve their life prospects by improving productivity. Also,
having fewer children enhances the health of women, as noted by John A. Ross
(see footnote No. 2).
India’s aspirational youth
are an amorphous mass; however, they are desperate to see the Modi Government succeed,
if only because it is India’s last chance at getting on the high growth track
which can help to achieve an overall
development. “But what is absent is a sense of self confidence and clarity over
the direction we are headed", as noted by Prof. Manoj Joshi.[10] The main concern today is the impairment of
human potential, which is not allowing India to reap its rich demographic
dividend. It is high time that political parties focused on improving
people’s ability to earn more rather than dolling out subsidies that make
people dependent on the political class and system.
Modi won the general
election promising millions of jobs for youth. Critics say this is a pipe dream
looking to the present state of affairs. But experiences of East Asian
economies have shown that it is possible. Experience
of these countries indicates that economic growth is not enough; it must be
accompanied by structural transformation to unlock the human potential. One can
learn from these countries. During the initial stage of development, most
of Asian countries concentrate on developing human capabilities by focusing on primary
health including reproductive health to reduce the incidence of unwanted
fertility and focusing on the quality of
education especially school education.
As
of now we have a slogan: ‘Make in India’. It must be supplemented by another
slogan: ‘Enhance Human Capital’. For this we need an agenda, as noted in my
earlier post entitled: “Growth with structural transformation: A
development agenda for India”. [11]
I
will like to conclude in the words of
N.R. Narayana, author of highly acclaimed book: A Better India: A
Better World, (2009), “Economic growth and prosperity require not just growing
population, but also what economists call ‘good human capital’ – a population
equipped with the skills and resources to participate in the economic. With
limited progress in human development, India’s large population can become a
liability rather than an advantage. A failure to stabilize India’s population
will have significant implications for the future of India’s economy”. Thus the
demographic predictions are loud and clear: that the promise of demographic
dividend will not last long, in any case beyond 2030. Can India take advantage
of this demographic window in the next couple of decades and garner its
benefits? Hope policy makers are listening!
[1] Boom, David E., David
Canning and Jaypee Sevilla. 2003. The Demographic Dividend: A New Perspective on the Economic
Consequences of Population Change, Population Matters Monograph MR-1274, RAND, Santa Monica.
[2] John Ross. 2004.
Understanding the Demographic Dividend, a policy paper, POLICY Project, Futures
Group, Washington, DC.
[3] Kothari, Devendra
and Sudha Tewari. 2009. “Slowing Population Growth in India: Challenges,
Opportunities and the Way Forward”. MIPD
Policy Brief No.2, Management Institute of Population and Development, a
unit of Parivar Seva Sanstha, New Delhi.
[4] Kothari, Devendra. 2014. “Managing Unwanted Fertility in
India: Way Forward”, Institute of Economic
Growth (ed.): National
Rural Health Mission: An Unfinished Agenda, New Delhi: Book Well, pp.25-36.
[5] For
details, see: The National Employability Report Graduates 2013 at: http://www.aspiringminds.in/docs/national_employability_study_IT_aspiringminds.pdf.
Also see: The National Employability Report
(NER) for Engineers by Aspiring Minds at: http://www.aspiringminds.com/research-articles/exploring-national-employability-report-engineers-2014-part-i .
[6] “Jobless growth” means a
situation where the flow of output increases without a proportionate increase
in employment opportunities.
[7] Kothari, Devendra. 2014. Education in India needs intensive care, not a quick fix, RAEA Policy Paper No. 1. Rajasthan Adult Education Association, Jaipur.
[8] Refer: Angus
Deaton. 1913. The
Great Escape: Health, Wealth, and the Origin of Inequality, Princeton
University Press
[9] Refer: World Bank, India Malnutrition Report, 2009
at, http://siteresources.worldbank.org/SOUTHASIAEXT/Resources/223546-1147272668285/IndiaUndernourishedChildrenFinal.pdf
[10] For details, see at: http://blogs.timesofindia.indiatimes.com/toi-edit-page/same-same-but-different-parliaments-of-india-china-and-japan-are-all-pushing-reforms-but-guess-whos-ahead
[11] Refer author’s post: ‘Growth with
structural transformation: A development agenda for India’ at
http://kotharionindia.blogspot.in/2015/01/growth-with-structural-transformation.html.
