K R Sudhaman
India has now surpassed China to become the world’s most populous nation with 1.43 billion people, the latest United Nations data says. China now has a population of 1.42 billion, making it the second most populous country. It may be an elation as India has overtaken China in population. Nearly 40 per cent of the population are below 25 years, which is described as a demographic dividend when most other countries including China have ageing population. This meant India is the only country that has a productive population unlike other countries and hence it has potential to manufacture for the world, besides increasing the capacity to create wealth.
Another good news, according to United Nations data, is that India’s population is expected to keep rising for nearly three decades before it peaks and then start declining. The country’s total fertility rate (TFR) stands at 2, even below the ideal replacement rate of 2.1. The world’s TFR, on the other hand, is 2.31. In 2063, India will touch the peak of its population at 1.69 billion.
While all these are welcome, the question is whether India has been cashing in on demographic dividend or frittering it away due to jobless growth. India always had the so called demographic dividend right from independence in 1947. The share of young population was always higher with a little variation. But there was never a time in India’s history when job growth was higher than the requirement. As a result millions remained unemployed or underemployed. Even during the middle of the first decade of this century when economic growth was over 9 per cent consistently for 5 to 6 years, the job growth was not that encouraging.
People getting into job market have always been more than those who were getting jobs. Even during the best of times, job creation lagged behind requirement widely. It has become more pronounced in the last ten years. Increasing growth might be good in improving economic health of the nation but it does not mean improving economic well-being of all the people. If a petro-chemical complex is set up, it will reflect hugely in economic growth as capital investment is quite high. But its setting up will reflect very poorly in job creation as aRs 15,000 crore investment in a refinery will create just 10,000 to 15,000 jobs. Whereas as Rs 15,000 crore investment in small scale industries particularly in food processing will create lakhs of jobs and some in rural areas as well.
Shekhar Aiyer and Ashoka Mody of Princeton University, argue in a World Bank working paper that demographic dividend is not automatic. There has to be effective training and effective mechanism to make the population employable.
If Japan, Korea, China and other East Asian economies took advantage of demographic dividend in 1960s, 1970s and until early 21st century, it was because they invested heavily in education and health of the people. This turned out to be a dividend when they opened up their economies. In India the problem is that it has not adequately invested in health and education right from independence and as a result, it could never cash-in on its demographic dividend.
Mody, who has written a book titled ‘India is broken’ argues Indian leaders right from independence till date, have betrayed the nation in dealing with this basic problem, education and health. As a result the nation has achieved a virtual jobless growth meaning job requirements far exceeded creation. The last ten years during Modi era was perhaps among the worst. He also blamed Prime Minister Jawaharlal Nehru and Prime Minister Indira Gandhi too on this score.
After 75 years of independence, India might have achieved universal education meaning school enrolment of virtually all eligible children. But the problem is huge dropout rates, particularly after fifth standard, then eighth standard and secondary education. It is more pronounced in the case of girls. Mody blames flawed economic policies and dysfunctional political system for depriving millions of poor and marginalised the much needed jobs in this country. Mody argues that chronic and integral failure of the political leadership is responsible for denying opportunity to millions of people. He says the political masters all along have been more interested in formulating policies for short-term and electoral gains, resulting in India never being able to meet the deficits in job creation. Also criminalisation of politics, particularly from Indira Gandhi’s time had made things worse.
Mody, who traces politico-economic history of the country, says that India is ‘broken’ because it has not created millions of jobs required for its vast population. It is true that 40 per cent of the population are below the age of 25 years. But where are the jobs for them. In India 10-12 million people enter the job market every year. This has been the case right from the day we became independent. It used to be 7-9 million people entering job market then. He gave a startling statistics to say that in the ten years from 2012 to 2022, India has had a jobless growth meaning not a single additional job has been created. India would require to create 200 million additional jobs in the next 10 years from a near zero in the previous ten years and this is a stupendous task if not impossible.
So the narrative that is being created that India is in a bright spot is that of elite. It is true there is an opportunity for India but the question is does India have the wherewithal to create these additional jobs, that too when the faulty education and poor health make this youth not employable.
If political leadership is serious about the taking the country and its people forward, it needs to make an honest attempt to resolve this issue, which is long term and corruption free politics. Failing on this score could result in demographic dividend becoming a ticking bomb. (IPA)
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