Gaining from differential demographic dividend

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 Gaining from differential demographic dividend

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• India's demographic dividend: For many years, experts have wondered about the potential of this benefit that was coming India's way, when the expanding workforce and reducing old age dependency would create an economic booster. But what's not discussed is the wide disparity in this, across the states of India. Proof? Mass reverse migration in April-May 2020.
• A new opportunity: Around 90% of India's population is under 60 yrs of age, of which 35% is under 19 years old. So in coming years there will be a large addition to working population group. The developed world, however, is old and growing older.
• Definition of Demographic Dividend: It refers to economic benefits arising out of a larger part of population being part of working-age, compared to the non-working-age share. Many others took advantage of it recently - Japan, Thailand, S Korea, China. Japan enjoyed it from 1964 to 2004. India's golden period is between 2020-2040 (actually 2018 to 2055, 37 years in all). 
• Present situation: India's birth rates are dropping rapidly, so new children are not being added fast, and hence working-age population is growing. India's total fertility rate (TFR) is sharply reducing and is nearing 2.1 (global TFR is 2.4, and Replacement Fertility Rate is 2.1). So for India, TFR has gone down by 50% compared to 1990s.
• Inter-state variation: The TFR in Bihar, MP, UP is quite high, upto 2.5, and in Delhi, TN and Maharashtra it is as low as 1.5. So the net result will be that India's demographic dividend will arrive differently across various states. Bihar etc. will have a higher share of young(er) population, and are now at the first phase of demographic transition. They will send workers out, that others will receive.
• National policies: A single national policy would not work out, as population profiles will be totally different. The ageing states will face labour-deficits, and other will supply labour. The ageing ones need more spending on health, education and skill development right now to exploit the maximum.
• The rest: Those who are just starting off (Bihar etc.) will see the dividend in coming decades. Policies need to be made accordingly. Most of these are agriculture-oriented states, so spending on agro-processing industries will help. To absorb surplus labour (of those that returned post-Covid outbreak), focus is needed on labour-intensive mfg. and construction sectors. 
• Strength or weakness: Some may feel that divergent nature of labour pool across India is a problem. But with the right policies, and by attracting proper foreign investment, it can be made beneficial. 
• Summary: India should not miss out on this boon in coming years and decades, and must make state-specific policies to extract the most.

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