The links between the demographic dividend and growth have been examined by researchers by looking at the experience of developing countriesThis paper explores this argument and see whether the expected changes in India’s population size and structure will create a supply-side potential and the policy measures required for realising this.
India is at the cusp of a major transition. Within a generation a society predominantly of low income rural agriculturists will become one of middle income, urban, industrial and service workers. The absolute size of the rural population will start declining in a decade or so and a massive occupational and locational shift will move a 100 million people from rural and agricultural work to factories and service establishments in cities. There are other transitions that will accompany this. One is the so called demographic dividend - the bulge in working age population in the North. The South on the other hand will see a rising proportion of aged retirees from the work force and face labour shortages, which are already evident in current migration trends. All this will happen in a global environment where new technologies that replace skilled labour with computer controlled machines will dull the edge of comparative advantage of low cost labour. This paper outlines an agenda for development focussing on shifting the focus of growth to the North, ensuring high growth in industry and services, promoting an energy transition,coping with the urban challenge, establishing a structured social security system, conserving the environment and reforming politics
The optimism about growth prospects of the Indian economy rests to a large degree on the acceleration in growth seen since 1980 and even more so since 2003-04. Hence, the first part of the paper reviews the growth record of the economy since 1950, the reasons that underlie the acceleration and the prospects at present. The case for more rapid growth also rests to some extent on a comparision with other developing countries, particularly with some fast growing economies in Asia. Hence, the second part deals with some international comparisons. The third part draws some lessons from this review of the past and tries to highlight some of the key conditions for sustaining high growth over long periods. The paper ends with a discussion in the last part of what India would be like if we were to succeed