Reaping the demographic dividend

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Reaping the demographic dividend

  • World Population Prospects (UN) 2022, forecasts that the world’s population will touch 8 billion this year while the Indian population will surpass China’s by 2023.

The case of china: comparisons with India:

  • Without the one-child policy of China , China’s population too would have naturally risen and peaked in 2040, allowing the world’s second-largest economy to enjoy a much longer “demographic dividend” Instead, China is enduring an ongoing population implosion.
  • India’s population, by contrast, would have peaked at 1.7 billion, of whom only 330 million will be 60 years or older.
  • So India is getting a demographic dividend that will last nearly 30 years.
  • Demographic dividend refers to the growth and development of an economy due to a large percentage of the country’s population being of working age.

India’s potential workforce

  • Deloitte Insights (2017) expects “India’s potential workforce to rise from 885 million to “1.08 billion people over the next two decades from today”, and that “these new workers will be much better trained and educated,” than their existing counterparts.
  • It contends that “the next 50 years will, therefore, be an Indian summer that redraws the face of global economic power.”
  • McKinsey & Company’s report, ‘India at Turning Point’ (August 2020), believes the “trends such as digitisation and automation, shifting supply chains, urbanisation, rising incomes and demographic shifts, and a greater focus on sustainability, health, and safety are accelerating” to “create $2.5 trillion of economic value in 2030 and support 112 million jobs, or about 30% of the non-­farm workforce in 2030.”
  • The Economist in its May 2022 issue, says, “As the pandemic recedes, four pillars are clearly visible that will support growth in the next decade;
  • The forging of a single national market
  • An expansion of industry owing to the renewable energy shift and a move in supply chains away from China
  • Continued preeminence in IT
  • A hightech welfare safety net for the hundreds of millions left behind by all this.”

India: an open society:

  • When compared to China, India is still a young country and in a much better position to transform itself compared to China of the 1970s.
  • India still an open society where mass protest matters and produces results. Indians have not been traumatised as Chinese were at the time of Mao Zedong’s death and in the aftermath of two events he set off and which roiled China for decades — The Great Leap Forward and the Cultural Revolution.
  • The IT technologies now available in India, and most importantly the Internet they run on have matured exponentially.
  • Many things right from video conferencing to instantaneous payments and satellite imaging are getting better and cheaper by the day.
  • India’s administrative systems manage to deliver and its infrastructure is in far better shape today than it was for China at the start of its reforms.
  • Nor did India impose the equivalent of China’s one child policy that has seen China suffer the consequences of a prematurely ageing society with a skewed gender ratio.


  • To get the best out of its demographic dividend, India needs to invest massively in quality schools and higher education as well as health­ care — sectors it has neglected for decades — on an unprecedented scale, till 2050, when its population growth would peak.