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Introduction The debate over relationship between population growth and economic development is there since the much

criticized theory of Malthus in 18th century. Economist focused on the size of population and the growth of nation, but the composition of population age structure was not considered until the study of Coale and Hoover (1958), but in recent years, demographers Bloom et al have studied the type of composition of age structure of population and its effect on economic growth and the concept of demographic dividend emerged. Demographic dividend is defined as a rise in the rate of economic growth due to a rising share of working age people in a population. This phenomenon occurs with a falling birth rate and the consequent shift in the age structure of the population towards the adult working ages. It is also commonly known as the demographic gift or bonus or demographic window. The demographic dividend, however, does not last forever. There is a limited window of opportunity. In time, the age distribution changes again, as the large adult population moves into the older, less-productive age brackets and is followed by the smaller cohorts born during the fertility decline. When this occurs, the dependency ratio rises again, this time involving the need to care for the elderly, rather than the need to take care of the young. In addition, the dividend is not automatic. While demographic pressures are eased wherever fertility falls, some countries will take better advantage of that than others. Some countries will act to capitalize upon the released resources and use them effectively, but others will not. Then, in time, when the window of opportunity closes, those that do not take advantage of the demographic dividend will face renewed pressures in a position that is weaker than ever. Window of demographic opportunity in India India is in the midst of a major demographic transition. That transition started about 40 years ago and will likely last another 30 years. As a simple quantitative matter, about a quarter of the projected increase in the global population aged 1564 years between 2010 and 2040 will occur in India. The working-age ratio in the country is set to rise from about 64 percent currently to 69 percent in 2040, reflecting the addition of just over 300 million working-age adults. This would make Indiaby an order of magnitudethe largest single positive contributor to the global workforce over the next three decades. Another estimate by Ian Pool suggests that by the year 2020, 136 million Indian youngsters will join the global workforce. Compared to this enormous number which accounts 17% of total global workforce, China will add only 23 million people and the USA will increase its working age population by 11 million during this period. Indias total population (currently a little over 1.2 billion) is projected to grow by as much as the total current population of the US. The report of technical group on population projection shows the change in population and age structure composition in India. Comparing two point of time it is seen that the base of the population pyramids shrinks in 2026 and population concentrates on middle ages. So as a result the dependency ratio will be falling significantly. In this falling dependency ratio young dependency will contribute the lions share. As the dependency ratio falls more resource will be released which can be used for investment purpose. The population pyramid for 2026 shows the concentration of huge population on working age group. If properly trained this population

Source : Report of the technical group on population projection, RGI.

Table: 1

Himachal Pradesh 24.43 Uttaranchal 21.48 J&K 21.59 NE states 21.22 Kerala 28.05 Punjab 24.24 Chhattisgarh 21.95 Orissa 23.9 Assam 21.31 Tamil Nadu 27.15 Haryana 21.68 Jharkhand 20.17 Karnataka 24.14 AP 24.21 Gujarat 23.63 West Bengal 23.76 Rajasthan 19.85 Madhya Pradesh 20.74 Bihar 19.11 Maharashtra 24.19 Uttar Pradesh 19.37 India 22.51 Source: Report of the technical group on population projection, RGI.

Percentage share of States in total projected population increase during 2001-26 0.4 0.9 0.9 1 1.5 1.9 2.1 2.3 2.4 2.5 2.7 2.9 3.8 4.8 5 5.5 6.7 7.4 8.3 9.8 22.2

Median age of projected population during 2001- 2026 2001 2026 35.14 30.55 32.48 35.69 37.67 34.77 29.08 33.57 30.8 37.29 31.85 30.1 34.44 34.58 33.31 34.46 29.51 28.83 29.05 39.92 26.85 31.39

will contribute the largest share in global labor force supply and can control global labor market. Dependency ratio It is well known that a low dependency ratio leads to high growth rate in the economy. It is because during the periods of low dependency ratio resource is released. If the surplus resource is invested it will bring forth economic growth. On the other hand period characterized with high dependency ratio leads to slow growth as most of the income is consumed. Table two shows dependency ratio for India for different periods. Dependency ratio is resultant of child dependency ratio and old age dependency ratio. Table two shows that both dependency rates have been falling and will be lowest at 2025, then starts increasing. The time period (2010-2040) will be the period of opportunity for India.

Table: 2
Year Dependency ratio 73 74 76 78 79 77 74 72 69 68 64 60 48 50 Child dependency ratio 67 68 70 72 72 71 67 65 62 60 56 51 36 27 old age dependency ratio 6 6 6 6 7 7 7 7 7 8 8 8 12 22

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2025 2050

Source: Chandrasekhar et al (2006) Leaders and Laggards The above table shows the percentage share of contribution of Indian states in changing population. So-called poor or backward states will contribute a large share in this population. The states of UP, Bihar, MP and Rajasthan jointly contributes almost 45%. UP alone contributes 22.2 %. On the other advance states like Tamilnadu, Karnataka, Kerala, Andhra Pradesh, Gujarat and Maharashtra jointly contribute 27%. Again considering the median age of the population, the table shows young population comes from UP where the median age is nearly 27 years and oldest population comes from Maharashtra where the median age is almost 40 years. For Bihar, Rajasthan and MP median age is almost 30 years where for the advanced states the average median is almost 34 years. From the above discussion it is seen that poor states is going to contribute more in the window of opportunity. And here lies the problem and possibility of reaping this window of opportunity. If nourished properly, it will bring off demographic dividend otherwise there will be a demographic nightmare. Past Experiences Economic support ratio for East Asia falls in 1950s and 1960s. But it rose rapidly at beginning of 1970s and continued for some time. This phenomenon helped the countries greatly in achieving an outstanding economic gain. In words of David Bloom EAST ASIA'S NEAR-TRIPLING of real income per capita between 1965 and 1990 is one of the most extraordinary economic phenomena of the twentieth century. Never before has income per capita grown so rapidly in such a large group of countries for such a prolonged period. Several economies in the sub region

that began this period as low- or middle-income developing countries are now industrial leaders. Literature suggests that one-third in growth in GDP is contributed by this demographic factor. This phenomenon famously known East Asian miracle .The main reason of their success is that they were able successfully to convert their labor force into human capital that worked as the engine for their economic growth. Another example was the emergence of Ireland Celtic tiger. In 1973 ban on contraception was ended by Irish supreme court and as a result fertility decline rapidly. This brought demographic transition in Ireland. Ireland successfully used the window of opportunity and Irish economy received a stimulus and as a result Ireland emerged as Celtic tiger. The Diffidence in India Though it is true that these countries reaped the fruit of window opportunity but this will not be the case for India. These are small economies and a population of these countries was also small compared to India. Their challenge for human capital formation i.e. to educate the human resource and employing the work force were in smaller scale. This challenge is tough hurdle for India. Diversity in India is a well known fact. Heterogeneous population, small groups, caste and community problem, many religions and faiths, different culture, so many languages, bureaucratic system, different and regional political interest make the problem difficult for India. Another fact is that huge part of this will come from rural India. They have to be trained properly. Still Indian economy is agrarian in nature. These things will add different dimension about the problem to think about. Problems and Prospects To reap the benefit of window opportunity, first of all, India needs to improve conditions of the basic support systems like education and health. There will be a huge demand for education and health care system to produce good quality of labor. But infrastructure is not well enough to meet the future need. 1. Education in India Only 66% per cent of the Indian people are literate (76% of men and 54% of women). While close to 90 per cent children in the 6-11 age group are formally enrolled in primary schools, nearly 40 per cent drop out at the primary stage. The enrolment ratios of Scheduled Caste (SC), Scheduled Tribe (ST) and Muslim children (especially girls) still remain far lower than the national average. 1.36 crore (40 per cent) children in the age group of 6-14 years remained out of school as on March 2005. Half of Indias schools have a leaking roof or no water supply, 35% have no blackboardor furniture, and close to 90 per cent have no functioning toilets. The official teacher-student norm is 1:40, yet in some states classes average is one teacher per 80 children. The prescribed norm of a school being available within the radius of one kilometer is still not being fulfilled. India has the largest number of people in any country in the world without access to education

Less than one-third of adolescents (11-17 years) are in school (NFHS-3 2004). The situation has not changed much since NFHS-2 (1998). Of the drop-outs for girls marriage is usually the reason less than half have minimum literacy skills. Yet this group continues to receive inadequate attention. Though Indian education is considered as the third largest higher education system in the world after USA and China, gross enrollment ratio in higher education in India is quite it was only 11% in 2005 compared to 83% in US, ranging between (20-24) % in China and Brazil. For SC/ST group it was only around 6.3 %, for Muslims it was around 6.84%, for female Muslims the GER was placed at only 5.8 per cent whereas for female SC/ST group, it ranged only between 4.43 and 4.76 per cent. If further subdivision is made on the basis of poor and non-poor, GER for poor SC/ST works out to only 1.55 to 1.89 % whereas for the poor rural SC/ST group it turns out to be at abysmally low levels of only 1.11 to 1.35%.

2. Health Scenario United Nations calculations show that Indias spending on public health provision, as a share of GDP (5.1%) is among the lowest 20 in the world. India contributes to fifth of the worlds share of disease. It has been projected that burden of disease will rise significantly by 2020. Disease that concentrate on the age (15-49) like T.B., HIV/AIDS, reproductive problems, mental health have significant chance to rise. Nearly 54% of the population in India does not have access to essential medicines. Infant and child mortality is still high Almost half of the children (48%) under five years of age are stunted, 43% are underweight and 20% children are wasted. India homes the highest number of malnourished children in the world. 36% of women in the age group (15-49) have a BMI cut-off point (18.5). 15% ever married women in India are overweight. 54% women and 24% men suffering from anemia. For ever married women it is 56%. India has 5.2 million adults living with HIV in the age group (15-49). Among them 57% are from rural area and 38% women. GATS survey shows tobacco consumption is high among Indians Proportion of skilled health personnel is still low than required

3. Social Exclusion The term social exclusion means the process by which certain groups are unable to fully participate in the life of their communities and consequences. There are many problems in Indian social structure. Since time immemorial, a large majority of the people, the so-called backward classes continue to be deprived of their rightful place in the Indian society. These communities together account for 78.1 per cent of the total population. Arguably, they are also the majority among the people below the poverty line. The continuation of age-old division of

labor along the rigid caste lines has no doubt given rise to the lack of flexibility and mobility, which is the very essence of the development process. If a large majority of the populace is denied the educational opportunities to build their productive potential and if the bulk of the society is denied the opportunities to channelize their potential into higher productivity confining them instead to traditional menial jobs on the caste lines, it would hinder growth potential of India. If India wants to harness its window opportunity fully growth process should inclusive. The momentum of economic growth and sustained growth will be maintained it the growth process involve members from all strata of the society. 4. Gender Dimension Almost half of the working- age population comes from female population. This gives the problem a new dimension. Labor force participation for females is low compared to that of males. In India it is observed that participation of young women in gainful economic activity is typically less than that of young men. In addition, there are the problems of lower levels of access to education and fewer opportunities for skill development for young women. Female work force participation rate in higher in rural area than in urban area. Work opportunity is higher in rural area as around home and firm. The gender gap in both literacy and education remains large, especially in some states, even though it has been narrowing in recent years. This in turn affects employment possibilities, although even for educated unemployment, young women show higher rates than young men. All these put the women at disadvantaged edge. 5. Participation of Poor States Recent literature (Aiyar and Modi (2011), James (2011)) shows that so-called BIMARU or laggard will participate actively in contributing into working age population. Table: 1 gives an outline about their participation. Most of the advanced states in India achieve fertility levels that move around the stability level. But most of the poor states characterized with a comparatively higher fertility level. They will produce a large share of this working-age population. These states experience a poor and backward socio-economic condition, deficit in education, inefficient and not-sufficient health care system, lengthy bureaucratic procedure, narrow political problems in past decades. Current scenario has not improved so much. Expecting a radical change in their condition within a short time is like merely building castles in the air. But possibility is there and that should be used. Investment in education and health. There is both problem and prospect. The prospect is that if the country can convert its huge working age population into human capital it would be a great stimulus to the economy and it would be a catalyst to economic growth and development in the long run. If cannot handled properly this population will be like an explosive bomb. It would act as a hindrance to economic growth. If the population cannot be trained and employed properly it would be a burden on the working age population. It will increase dependency ratio and will increase the burden.

Investment in education healthcare would provide them sufficient resource. This social investment would help the country to reap the benefit of the window opportunity. A huge chunk of this population will come from rural India where the school droop out rate is quite high. So the Govt. first needs to identify the specific needs of education sector. Investment in primary and secondary education is the rural area. Investment in higher education will improve the quality of labor. Skilled workers are more productive, hence contribute to economic growth. Without improving quality it will be difficult to provide sufficient jobs to meet the need of the population. Recent trend shows India has great possibility to capture information technology based jobs. Business process outsourcing and knowledge process outsourcing are two emerging sectors in the new century. A huge demand for skilled labor force will come from these two sectors. Another factor is investing in health. While the changing age distribution of the population can eventually lead to an increase in the supply of working age population, it may not necessarily lead to an increase in productivity , without significant improvements in the health status of the population (both of the working and the non-working age). Healthy people are more productive. A number of studies suggest that health contribute positively to economic growth. Healthy people spent more time on work. Healthy and productive people earn more and can spend more for education. Increased life expectancy generates saving provided the burden of disease across all age groups decreases other all income would be spent in income. Conclusion Benefit of demographic transitions show the rise in the relative number of bread- winners. Due to decline in dependency ratio and participation of women in the work force results in increased GDP and improved standard of living. But the initial condition is to assure a supply of skilled labor. Without formation of human capital and necessary infrastructure all efforts will be ended in smoke. Absorbing the benefit of a decline in fertility and a huge working age population it is required to invest largely in education and health care. The improvement in quantity and quality of labor would act synergistically to take the economy to a higher level of growth and prosperity. Access to health care also improves the quality of labor by improving mental and physical condition. These are the supply side. Demand for skilled would come from the county and from outside. Due to the aging of population of industrial countries there will be a high demand of skilled labor from the industrial countries. Now most of the developed countries demographic transition is in the final phase. As a result population aging occurs. So they are in high demand for young skilled labor. There is a tremendous possibility for the IT sector to make India the export power for software and IT based jobs. It this turned out into reality there would high demand for skilled labor. There is also a dark side. If India fails to take this golden opportunity there may rise of problems related to political and social instability like Naxalism or other provincial movements. Demographic dividend would be converted into demographic nightmare. So the country should try heart and soul to grab the fruit of window of demographic opportunity.

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