Mains Marathon

Approach :

• Start by explaining what is demographic dividend and demographic window are.
• Analyze the potential and limitations of India’s demographic advantage
• Conclude with a suitable way forward.

Introduction:

As per the United Nations Population Fund (UNFPA), Demographic dividend is "the economic growth potential that can result from shifts in a population’s age structure, mainly when the share of the working-age population (15 to 64) is larger than the non-working-age share of the population (14 and younger, and 65 and older)”.India entered the demographic dividend opportunity window in 2005-06 and will remain there till 2055-56.

Body :

India’s Demographic Opportunity

• Around 68% of the population falls between the ages of 15 and 64, and 26% falls within the 10-24 age group, making India one of the youngest countries globally.
  • It is notable that India has a relatively young population with a median age of 28.4 years.
• Also, India will have 1.04B working age persons by 2030. Correspondingly, India’s dependency ratio would be the lowest in its history by 2030 at 31.2%.
• With about 24.3% of the incremental global workforce over the next decade India would remain the largest provider of human resources in the world.

Limitations Hindering the Dividend

• Skill Gaps and Education Deficit:
  • As per National Skill Development Mission Implementation Framework, it is estimated that only 2.3 % of the workforce in India has undergone formal skill training as compared to 68% in the UK, 75% in Germany, 52% in USA, 80% in Japan and 96% in South Korea.
  • According to the India Skills Report 2023, only 50.3% of Indian graduates are considered employable
  • Mismatch between higher education and industry demand leads to ‘educated unemployment’.
• Labour Informality and Underemployment:
  • Over 85% of the workforce is informal, without job security or social benefits.
  • The gig economy, though promising flexibility, lacks social safety nets.
  • Agriculture employs 45% of workers but contributes only 15-18% to GDP – a sign of disguised unemployment.
• Regional Disparities:
  • Southern states (e.g., Kerala, Tamil Nadu) have already started aging, while northern states (e.g., Bihar, UP, Jharkhand) are still in early demographic stages.However, the latter lack sufficient infrastructure, quality education, health facilities, and industrial base.
  • As per NFHS-5 (2019-21), child stunting and school dropouts are higher in northern states, limiting their demographic productivity.

Way Forward

• Invest in Quality Education and Skilling: Focus on job-relevant training, digital literacy, and soft skills to make youth industry-ready.
  • Skill India Mission, PMKVY, and National Education Policy (NEP) 2020 aim to improve employability.
• Formalize the Workforce: Strengthen labor laws, implement social security codes, and improve ease of doing business in MSMEs.
  • MUDRA loans, Start-up India, and Production Linked Incentive (PLI) schemes promote entrepreneurship and job creation.
• Promote Gender Inclusion: Ensure safe, flexible, and equitable workplaces to boost female participation.
• Address Regional Imbalances: Channel public and private investment into backward states to ensure equitable demographic gains.

Conclusion :

India’s demographic dividend is time-bound and must be supported by inclusive policies, social investments, and labour reforms. Otherwise, the dividend will narrow into a window that passes without reward. Achieving SDG Goals 4 (Quality Education), 8 (Decent Work), and 10 (Reduced Inequality) is imperative to leverage this opportunity before it’s lost.