Reaping Demographic Dividend

  • IASbaba
  • January 14, 2022
  • 0
UPSC Articles
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  • GS-1: Population and associated issues
  • GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Reaping Demographic Dividend

Context: With falling fertility (currently 2.0), rising median age (from 24 years in 2011, 29 years now and expected to be 36 years by 2036), a falling dependency ratio (expected to decrease from 65% to 54% in the coming decade taking 15-59 years as the working age population), India is in the middle of a demographic transition.

  • This provides a window of opportunity towards faster economic growth. 
  • In India, the benefit to the GDP from demographic transition has been lower than its peers in Asia and is already tapering. Hence, there is an urgency to take appropriate policy measures.

What are the challenges of demographic transition?

  • Without proper policies, the increase in the working-age population may lead to rising unemployment, fueling economic and social risks. 
  • This calls for forward-looking policies incorporating 
    • Population dynamics
    • Education and skills 
    • Healthcare
    • Gender sensitivity
    • Providing rights and choices to the younger generation.

What measures are required to reap the best of Demographic Dividend?

  • Update National Transfer Accounts (NTA) Assessment: India’s per capita consumption pattern is way lower than that of other Asian countries. A child in India consumes around 60% of the consumption by an adult aged between 20 and 64 (In China it is 85%). The NTA data for India (State-Specific) needs to be updated to capture the progress made on such investments since 2011-12.
  • Invest more in children and adolescents: Given that India’s workforce starts at a younger age, a greater focus needs to be on transitioning from secondary education to universal skiling and entrepreneurship, as done in South Korea.
  • Make health investments: The public spending on health has remained flat at around 1% of GDP. Evidence suggests that better health facilitates improved economic production.
  • Rights-based approach to make reproductive healthcare services accessible: The unmet need for family planning in India at 9.4% as per the latest National Family Health Survey-5 (2019-21) is high as compared to 3.3% in China and 6.6% in South Korea, which needs to be bridged.
  • Bridge Gender Inequality in Education: In India, boys are more likely to be enrolled in secondary and tertiary school than girls. In the Philippines, China and Thailand, it is the reverse. In Japan, South Korea, and Indonesia, the gender differences are rather minimal. This needs to be reversed.
  • Address the diversity between States: While India is a young country, the status and pace of population ageing vary among States. Southern States already have a higher percentage of older people whereas north-central region can act as the reservoir of India’s workforce.
  • Federal approach to governance reforms: A new framework need to be put in place for policy coordination between States on various emerging population issues such as migration, ageing, skiling, female workforce participation and urbanisation.
  • Increase female workforce participation: As of 2019, 20.3% of women were working or looking for work, down from 34.1% in 2003-04. New skills and opportunities for women and girls befitting their participation in economy is urgently needed. 

Why is increasing female workforce participation important?

  • Finding work will likely delay her age of marriage and make her participate in the economy more productively, as also exercise her rights and choices.
  • South Korea’s female workforce participation rate of 50% has been built on 
    • legally compulsory gender budgeting to analyse gender disaggregated data and its impact on policies
    • increasing childcare benefits
    • boosting tax incentives for part-time work.
  • It is predicted that if all women engaged in domestic duties in India who are willing to work had a job, female labour force participation would increase by about 20%.

Connecting the dots:

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