Q. 255.0( 1 Vote )

Read the passage given below and answer following questions:

Data from the National Sample Survey studies of 1999-2000 and from the 2001 Census of India reveal a sharp fall in the rate of employment generation (creation of new jobs) across both rural and urban areas. This is true for the young as well. The rate of growth of employment in the 15-30 age group, which stood at around 2.4 per cent a year between 1987 and 1994 for both rural and urban men, fell to 0.7 for rural men and 0.3 per cent for urban men during 1994 to 2004. This suggests that the advantage offered by a young labour force is not being exploited. Strategies exist to exploit the demographic window of opportunity that India has today. But India’s recent experience suggests that market forces by themselves do not ensure that such strategies would be implemented. Unless a way forward is found, we may miss out on the potential benefits that the country’s changing age structure temporarily offers.

(a) What is demographic dividend?

(b) Do you think that India is indeed facing a window of opportunity created by demographic dividend?

Answer :

(a) The demographic dividend or demographic advantage is derived from the age structure of the population. In the case of India, it is and will be considered as one of the youngest countries in the world. In 2000, India’s population was below 15 years of age. By 2020, the average Indian will be 29 years of age, as compared to 37 in China and the United States, 45 in Western Europe and 48 in Japan. This means that large and growing labour force will reap benefits leading to growth and prosperity.


(b) The demographic dividend is the result of the increase in the percentage of workers as compared to the non-workers in the population. The working population comes between 15 and 64 years in terms of age. It is the responsibility of the working groups to support themselves and also others who come outside this age group, i.e. children and elder people. Demographic transition brings changes in the age structure which lowers the ‘dependency ratio’, i.e. ratio of non-working age to working age which will create the potential to grow but this growth will only happen when the working age group is provided with enhanced education and higher levels of employment. If these new candidates don’t have proper education then their productivity will remain low and if remain unemployed than they will get depended on others rather than becoming earners. Thus, change in the age structure should be used properly with planning and development. Now, the problem arises to define non-working age group to working age group rather than the ratio of non-workers to workers. The difference between them proves some countries were able to exploit demographic advantage while some not.


It is true, that India is indeed facing a window of opportunity created by the demographic dividend. Dependency ratio was defined on the basis of the age groups was visible due to the effect of the demographic trends. Moreover, the dependency ratio fell from 79 in 1970 to 64 in 2005. It is considered that in the future due to fall in the proportion of children the dependency ratio fall to 48 in 2025 and due to the increase in the proportion of the aged, it will rise to 50 by 2050.


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