2018 onwards, India’s ‘demographic golden period’ has already begun. The demographic dividend, that is, the working population is higher than the dependent population. In simpler terms, the number of people able and eligible to work is higher than those unable or ineligible. This shift in age structure has great growth potential. In fact, a number of South-Asian countries have utilized their ‘golden period’ to increase their growth rates to double-digits.
So, why has India been unable to do the same?
The investment to GDP ratio is constantly receding. It has decreased from 34.3% in 2011-2012 to 30.9% in 2020-2021, which is not just low but a record low. In other words, the amount of money invested in our economy- new factories, new businesses, new infrastructure- has hit an all-time low, which has consequently led to unemployment.
Moreover, the government’s other agendas of demonetization and GST has worsened the unemployment situation. Although the intention to formalize the economy was understandable, the process was carried out in such haste that most of the small-scale businesses were unable to adapt. In addition to that, the previous service tax was 15% while GST is 18%. As a result, many service providers could not handle the burden of higher tax and ultimately had to shut down.
Furthermore, female participation in the labour workforce has decreased by 14.11% from 2014 to 2021. Shockingly, urban female participation has decreased by 18.44%. The cause for this may be deeply rooted in the patriarchy still existent in Indian society. Jobs have anyway decreased; however, the existing jobs have been seized by men. Data shows eight months post lockdown, 13% fewer and only 2% fewer men were employed or seeking jobs.
However, India still has not missed the train. The ‘demographic golden period’ is expected to continue till 2055. Starting next year India still has 33 years to reap the benefits of the demographic dividend.
What must it do?
#modi_job_do- Be louder! The first step to fix a problem is to recognize it.
Followed by, upskilling the youth workforce. Youth can only utilize the opportunities if they are educated and skilled enough to explore the possibilities. Although the Kothari Commission had recommended 6%, only 3% of the GDP is spent on education. The government needs to take up this responsibility.
Another hindrance to looking into is that of inequality. Caste, class, urban-rural inequality, and most importantly gender inequality. Data shows that India has lost between $1.4 trillion and $2.8 trillion due to lower female participation in the workforce. To thoroughly explore the demographic dividend, India must mitigate, if not terminate, gender inequalities.
To conclude, India can still boost its socio-economic development and emulate the other South-Asian countries. The government’s identification of this flying opportunity and thereby, taking correct steps towards it is India’s only chance for economic growth.
