United Nations Population Fund (UNFPA) report on demographic dividend projects five States – Bihar, Jharkhand, Madhya Pradesh, Rajasthan, and Uttar Pradesh – will account for more than half of the growth in the labour force in India.

Demographic dividend

• Demographic dividend refers to the growth in an economy that is the resultant effect of a change in the age structure of a country’s population. The change in age structure is typically brought on by a decline in fertility and mortality rates.
• Demographic dividend has positive influence on growth and development as the ratio of the working age population is high and the dependency ratio in terms of proportion of children and elderly people is low

Demographic dividend recent trend

• Close to 30% of India’s population is in the age group 0-14 years. The elderly in the 60-plus age group are still a small proportion (8%) of the country’s population. The working age group 15-59 years’ accounts for 62.5% of India’s population. The working-age population will reach the highest proportion of approximately 65% in 2036.
• The southern states are showing faster decline in the population growth rate as compared to the northern states. India’s fertility rate is now 2.6 but the rate in the southern states has fallen below two i.e. below the replacement level of 2.1
• The share and size of the elderly population is steadily rising. There are now 104 million elderly Indians.
• A labour shortage is also evident in large swathes of the southern economy

Impact

1. Internal migration: The decline in the population growth rate in southern states has led to labor scarcity, particularly in the unskilled labor sector, and this is leading to substantial migration to cities in southern states from the northern states.

Internal migration raises many larger social and economic issues which include housing and living conditions, and livelihood and social security, quite apart from the growing problem of social inclusion.

2. Political representation: The direct effect of such significant changes in population division between north and south states will be on the representation of states in Parliament. India has had to make its own adjustments to froze the number of seats each state had in parliament through a constitutional amendment. But considering the significant changes in population, the seats have to be redistributed. When that happens, the share of parliamentary seats of low fertility southern states will fall sharply.
3. Age-old problems: A large proportion of the elderly in the population has enormous implications for the planning of social security programmes, particularly pensions and health insurance.
4. Income disparities between regions: In India, wealth generation is not uniform across all Indian states. Northern states are registering lower single-digit growth rates whereas the south Indian states are registering magnificent growth rates.

Steps to be taken

There is a demographic divergence between regions in India and this should be seen not as a problem but an opportunity for overall socio-economic development in the country. And to make it happen, the policy focus has to be on education, health, skills and gainful employment, especially women’s participation in workforce; safe, voluntary and gainful migration; and inclusive urbanisation

• South-western region will require workers for keeping institutions running, taking care of the elderly and maintaining the economic productivity while the north-central region will have high and possibly surplus young working age population. If right collaborative planning is being done by states, it could be a big game changer and a win-win situation for individuals, families, States.
• There is a need to gain deeper understanding of migration flows, so that estimations and projections can be made regarding changing needs for housing and infrastructure, healthcare and utilities, education and skills. States need to work together to provide portability of identity proof and entitlements, as well as build support systems for families left behind.
• Focus should be on addressing harmful practices such as child marriage, access to quality sexual and reproductive health services and family planning services to all, and provisioning of health, education, life and vocational skills to all the young people especially in northern states to reap benefits of demographic dividend

Way Ahead

India will enjoy a longer span of demographic dividend because, as the window closes in some states, it will open in other states and it can guide the socio-economic development policy planning according to the age and sex structures in states or a set of states.

UNFPA advocates a differential approach in forward-looking policymaking and programme planning to harness the demographic dividend opportunity in those states where the windows for opportunity is closing soon. Fine-tuning the planning and implementation of schemes and programmes by factoring in population dynamics is likely to yield greater socio-economic impact and larger benefits for people.